Tony Simmons - Founder N+1

Welcome to another Founder Wisdom podcast. We have Tony Simmons with us today, live from Melbourne, Australia. Serial founder, I would describe Tony as. He's the founder of N+1. He's an advisory board member at a bunch of companies, previously founder and CEO at Sonant with a couple of exits under his belt. So very experienced. It's earliest time, it's late mine. So Tony welcomes the pod. Tell us a bit more about yourself and what you're up to.

Thanks for having me, Charles. Yeah, it's a bit early here. So yeah, I think the description was pretty accurate. The latest thing I'm putting together is really the culmination of all of that experience, and everything I've done has been about building software that solves customer problems. Customers', you know, deepest problems can be solved with elements of software if it's done right. We're now in a world where you can create software just by typing in a prompt. So I think there's ability to create custom software for almost every solution within a business. So that's what N+1 is. N+1 is the next iteration of software, and we're like everyone, we're building workflows into agentic solutions. And the world is your oyster at the moment. There's so much to build and so few builders.

Right. Um, you started as a lawyer, right? Like, how did you get out of that profession that tends to box a lot of people and started your first business full circle?

Uh, quickly was the, was the initial hope, was not even to be a lawyer. But, uh, yeah, I spent 8 years in it and I quit like 3 days before my 30th birthday. Um, and I figured if I was going to be an entrepreneur and you know, Not stay in a law firm and go down this path to partnership, and I just I just really it wasn't for me. I was there under sufferance. I said, "Well, I've got to do it while you know I'm young still." So I quit a couple of days before my 30th birthday and said, "Let's have a crack at building a business." So always been more interested in the business side, but at the time, you know, 20-odd years ago, law and medicine were. Seen as like the top rung of professions. And so that's what you aimed for as a kid.

Interesting. Okay. And what was Full Circle? You did 10 years there. I saw you did a couple of acquisitions yourselves, right? Which obviously makes sense as an M&A lawyer. What was that one about and how life-changing was the exit for you?

Yeah, no, massively life-changing. So Full Circle Group was— I had been in telecommunications as a lawyer working in London and in Sydney. And I realized that it was impossible for businesses back in the day to compare their telecommunications services with other offerings that were out on the market. So Full Circle Group was the first data platform that enabled a business, a big business, you know, with thousands of mobile phones and hundreds of offices, to be able to take their telephone bill, which, you know, in some cases was places was a stack of paper like this and turn it into data so they could understand how to procure their services better, how to take all the services and put them into different profit and loss and stick it into their accounting system. So really boring kind of data-driven business, but every company buys telecommunications, and it was the first sort of telecommunication expense management platform in Australia. So ended up picking up a huge amount of customers through that business, and eventually that listed on the stock exchange, not through an IPO, through sort of like a backdoor listing. And when I got out of that, we were able to realize all the shareholder value in the company. You know, I was still just turned 40, and it, you know, was a really good exit financially. Mentally, you know, ticked a lot of boxes that I had something to prove, that I could do it. And, um, yeah, that, that was, uh, 10 years pretty much. Day, day 1 to day 10 was almost exactly 10 years.

Love it. Uh, you said life-changing, right? So why not retire after that one and, um, just chill?

I mean, not that life-changing that you can, you know, some people get the, the triple commas or whatever you call. Um, this put me in a a position to choose what I wanted to do with my career, with my business life. So for me, that was life-changing, having the freedom of no longer having to go to a job because one, you know, you're financially able to do that, but also mentally knowing that you can go from zero to an exit from, you know, that gives you a lot of confidence in business. So that's why it was life-changing, not that I could retire to Monaco on the nice yacht by the Formula 1 track.

You stayed like one year at J Curve, I guess, like mandatory labor. After that, you started Lithodomas.

Lithodomas.

Yeah. What was that one about? AR/VR tourism. That's challenging. Was that— did you take that one as an L or was it successful?

Well, it's still going. It ended up in my feed, my LinkedIn feed, while I was waiting for this podcast. I saw a post from it come up. So it's still going. So what happened after the Full Circle Group exit was I started up my own sort of incubator and accelerator and investment vehicle. And one of the companies that came through the incubator was introduced to me by a friend. He said, meet this guy. And he was using a very early version of Oculus Rift, the VR glasses, and I wasn't really into it at all. But then VR became, you know, this hot thing. The first time I looked through the Oculus, it actually made me physically ill. I was like, oh, you know, felt all dizzy and, yeah, discombobulated. I was like, this is horrible. But then the second Oculus Rift came along and it had stabilized a lot of those issues. So kind of thought, okay, well, let's see what the guy's got. And he, he was a PhD in archaeology. He's a very smart guy, um, and said, let's recreate all of these cityscapes in virtual and augmented reality. So you could stand at the Colosseum in Rome, and instead of, you know, some guy holding a book up saying, this is what it used to look like, um, you put the glasses on and now you're immersed back in that world. So this was a very Very early on, like too early on. What was that, like ten years ago? And it's probably still ten years before we're at that level of uptake of the VR, if we ever get to it. But that was the business, and so we got it into you know a lot of you know museums and tourism around Europe because there's all these incredible tourist sites around Europe that you could recreate and. You know, it was starting to go really well. We'd raised a lot of money. We had a lot of cultural support from different cultural and education institutions, universities, governments, whatever. But then I was never— how do I say this? I probably left myself open by, you know, not having enough control of the business. The original founder did, and he wanted to be the CEO. That's what happened. He said, I've got control of the business, I'm going to be the CEO now. And that was the end of that.

Interesting. How did you deal with that? Like, what was your reaction? Why not sue him?

I mean, having been a lawyer, the last thing I ever want to do is end up in court. I know what a terrible process that is. And I never really— that's not me to sort of do that. You know, I try and get things done collaboratively with people. And, you know, it's inevitable that you'll have moments with people, but my sort of whole thing in life is to look forward and not to look back. So, having said that, it was very difficult. It did take me a long time to sort of, you know, pick myself up.

Digest it.

Yeah, like one exit gives you the, you know, the confidence, and then another exit is— or you're exited rather than actually exit, you know, bashes you around the head a little bit and takes a while to recover from.

Yeah, but you had other stuff going at the same time, right? You had the Discipline podcast, you had Marketplace Ventures, your incubator. So I guess you were busy with that.

Yeah, it was a really— it was a pretty hectic time, probably too many plates in the air. And the Marketplace Ventures was primarily an investment vehicle. So, you know, after that, around that time, I closed that down as well. Ceased doing startup investments, um, and basically was just doing my podcast. So I think the theme is with me, uh, for good or for bad, I'm usually a little bit early on things. Uh, VR didn't go so well. Big data with the Full Circle Group went really well. And yeah, started the podcast in 2016, so that's 10 years ago. That was probably a little bit early as well. I was very big on, uh, Gary Vee, Gary Vaynerchuk at the time, and he was sort of saying not only is podcasting a great way to reach your audience and create, you know, social content, but it's a great way to sit in a room with someone who you really want to meet and learn from. Exactly what we're doing now, same sort of thing, is, you know, if I can hear lots of stories from lots of people, I can take all these interesting bits. And not only that, I can create a network of people that I've met and I know and I thought that was a really interesting thing. So that yeah, I continued to do Discipline the podcast, but as far as being involved with any other business at that time, I was like, okay, I need a I need a pause, and I probably took probably took two years out at that point in time, just sort of picking myself back up again.

Yeah, yeah. Tell me about it. The podcast methodology, right? Like me, I started because I was curious. I was listening to guys like. Andrew Warner, John Lee Dumas, Tim Ferriss, right? And as any good entrepreneur—

Tim Ferriss.

Like, yeah, I can certainly launch my own podcast, right? And A/B test and experiment. And I discovered, yeah, like to put it more like precisely, it's more than a network, it's people you can sell to, right? It's like you talk to your ideal customer persona at scale, you give them an excuse to meet you while all the other schmucks are trying to sell them something. You give them something before you ask something and on the back end you build a relationship and eventually they buy from you.

Yeah, totally.

You get that and we're like the most prominent one, the fastest growing and the most spread out one in B2B, right? Like we created a company and an engine and system out of that.

Yeah, you and Sunny are weapons. You are machines at this stuff. So you get it. It's like, I, I, I effectively call it— it's almost like a Trojan horse, you know? You get in there by giving company.

It's a Trojan horse, literally.

It's like— that's awesome.

Did you watch the— was, was it Homer, the movie? Is it good?

Which one? The Odyssey, the movie. No, I haven't seen it. I love Christopher Nolan films.

Well, that's— it's like, yeah, back then the Trojan horse, I guess, like the one of the greatest military tactics. Um, I think it really happened. Yeah, historically, or maybe it was a myth, but it's not—

I reckon, I reckon, I reckon these things happen for sure.

Like, yeah, is, is business war in your mind? Like, how do you view business generally? What's the best analogy for it?

I probably did, I reckon, early on I probably did think it was like a battle. But then as I've got older, I think more of it as a game. So there are still elements of war, but at a strategy level, you're always strategizing. But in terms of life and death, I don't think I've ever treated business as— I used to hate people who'd send me something and say it's urgent. It's not urgent. Someone getting shot on the battlefield, bleeding out, that's urgent. Me not responding to a customer's email or something like that, That's urgent. That's not urgent. And you know, with staff, the same sort of thing. If a staff member said you know they had a sick dog and it was really stressing them out, I'd want to take that stress out of their life and say, "Don't come to work. Go look after your dog." So from that point of view, I don't see that as war. But even saying to a staff member, "Go home and look after your dog. Don't worry about work," as painful as that is sometimes when you've got your own agenda in business. I think that's part of strategy too, to make sure you look after your people, because when you actually want them to do something and dig deep, you can call on that trust and that relationship you've built. And, you know, hopefully you say, well, you know, you don't have to say it. I've looked after you. Now it's your time to look after me. You build them into a point where they're happy to do it anyway. So to me, that's got elements of the battlefield. But yeah, I couldn't think of things differently. The people who go to war, they're, you know, they're— those people are real.

You're right about that.

It's like, it's a Tim Ferriss thing.

I've stepped back from video games because they're too addictive, but, but that has to say something, right? Like, and TikTok hijacking our brains, and porn, and like, uh, fast food, and If you take like these things, reverse engineer them and try to add some elements of it to your business, especially if you have an addictive personality, which I think are the best founders usually, you will be immensely rich. Like that's my main thesis, right? If your business is so addictive, it's so fun, and yet you engineer mechanisms to constantly bring you back at work, work and I don't know, work with fun people, right? Like clients and partners alike and people you bring on your cap table, you will fucking win all the time.

Yeah. We call it in Australia, you might've heard it before. We call it a no dickheads policy.

Oh, that's good.

So, uh, you know, you don't work with—

they're not that intelligent also because like they lack social, uh, skills and intelligence as well. Right.

And Yeah, short term.

My clients, we feed each other. It's like fire feeding fire. And we understand. I mean, sometimes we talk about like, oh, this is not working, but with like zero emotions. It's just like, well, we'll fix this, right? We'll work on it and we won't waste time, you know? Yeah, some clients are just constantly nagging at you and they're playing their weird fucking games. And it's like, do you know that you saying that to me will lower my performance?

Yeah, well, I think, you know, it's the beauty— back to my exit, I think that's where I got confidence and I knew that you can trust in the process. And it's exactly what you're saying, if you gamify and build a process. And then I think with founders, my experience having the incubator is, you know, you get through this excitement sort of honeymoon period where you start a business and everything's fresh and it's new. Then, once you've got some foundations, it becomes really quite monotonous and boring doing the same thing, continuing to turn on the wheel to get a client meeting and do a pitch and sell the product and then improve. It's really quite monotonous for a period of time as you're actually building it. A lot of people can't do that discipline of just day-to-day, I've got to keep grinding. I've got to keep believing that another customer will come and then another one and then Then I'll get cash flow positive and then I'll be able to pay myself. Like, doesn't happen overnight. And some people aren't prepared to do that process for a period of time to actually see the results. So I think by gamifying it and you enjoy it, exactly what you say, you know that the results will come if you keep doing the same thing. You'll eventually get to level 3 and 4. So yeah, I think treating it as a game is like a brilliant way to think about business. You got to love it. You got to want to get to the next level and you got to persist, right? If you fuck up, you got to try again.

Yeah, for sure. So as a guy that has been through various exits and has seen a lot of shit and is now seeing AI, right, and even has an agency that does AI as a service, um, how do you recruit your humans nowadays? Who do you work with, right? Like, do you even have employees? I don't have employees. I stopped believing that model like 5 years ago. Um, I only have partners like that. I do rev share and equity and agents are in charge of executing boring stuff, right? So we're all really high performers, very high intellect people, right? Like working together, like me and Sonny, for example. Sonny was a client of mine. That's how I recruit my people.

Oh, that's cool.

Client first, and then they know my shit. We speak the same language. And then like, hey, you start referring me clients and you're super high value. Why not come in my cap table, right? What do you think about that?

I think it's great. I think that's a brilliant way to build an ecosystem of people who are similar values and like-minded. Um, I think that, you know, if I'd had my time again, it was different time, but, you know, networks is really how you build, uh, scale quickly. So, you know, with AI coming along, yeah, all the execution layer is done by the, the agents. And, you know, if you're smart enough and work with the right partners, you create agents with incredible knowledge and expertise. And then the front end, the customer end, is still about people to people. So you have a podcast, you meet the people, you use that content to continue to expand your influence. I think you and I think exactly the same way about business, that you don't need the employees at all. I still think with AI, one of the things I'm very mindful of, and it could be the legal background, the sort of risk aversion has always stayed with me. Thinking ahead what could go wrong. I think the security layer in building AI solutions is like the most important thing. We're seeing here with the Australian government that there was potentially a leak of the medical system Medicare. So this is people who probably have been a little bit too lackadaisical in their approach to security. But so having a security person that you can constantly talk to about for every project, making sure for me it's secure. I think that's as close as I'll get to an employee, having someone who's there all the time for security. Then after that, it's like best fit. Can I get a developer in Vietnam? Can I get one in Ukraine? Where can I go to find the right person? And probably I've worked with them before, or they come through a recommendation. But yeah, you pay on a project basis, just like the client's paying us as an agency. You find the best person, You do the best work and then you have someone locally who can give you confidence that the project will be maintained and secure.

Interesting. And N+1, who's your main ICP? What's your main way to sell to them or go to market?

Yeah, so look, I'm going back full circle myself now. Professional services businesses. So anywhere where there's a lot of manual process and there's legacy systems or multiple systems that aren't effectively connected with the middleware or a front end, and some of these legacy systems that these professional services firms use have limited APIs. So they're ripe for digital transformation, and it doesn't mean the whole business has to completely reconfigure. We go in, we pick a meaty workflow and say, what's something that is repetitive that you're doing all the time that has a process Maybe even has regulatory checkboxes that need to go on as part of this process. We map that out, we build the agent, and we drag it back to the profit and loss and say, okay, let's actually measure whether this workflow is going to deliver you an effective saving. And once we know that, how much the business, then what we're able to do is say, right, we're the market leader. In this workflow, let's sell the agent to anybody else. We'll go and knock on the door of every other business that's like yours or working in this particular professional service, and we'll try and sell that to everybody else. Did I lose you?

Sorry, I lost you. No, I got most of it. Is it Australia only or is it worldwide?

Look, I'll probably go Australia and New Zealand and the United Kingdom at this point in time. I think I've done enough with America. My last business, Sonnet, ended up selling to an American company. And as you know, it's over there, it's your afternoon and my morning. So I had to do a lot of early mornings and A lot of a lot of strong coffees. I think at this point in my life, I'm want a break from doing that. So from a time zone, Australia, New Zealand's very similar, and then the UK I can do in the evening when they're coming online. So that's big enough for me. I don't want to be you know I don't want to be three comma man anymore. I'm happy to build something where I enjoy coming to work every day, and this time own 100% of the company. I don't need to bring on external sources of capital to build something. And just see where it goes organically. I think if you've got customers who trust you, as I said, you know, at the start, there's so much to build and so few builders. It's just going to be an endless opportunity of, you know, owning a domain, owning a category, building agentic workflows. I can't see it slowing down. I can only see it speeding up.

Yeah, for sure. Just that there's lots of competition, right? Like And you could sync yourself to PST time zones, a good one, especially San Francisco. So you would have like a good 5 hours with them. Plus they're super ambitious, the ambitious founders, they work until midnight in SF, right? Like just that most of them are already onto agentic stuff. How do you distinguish yourself from these other agencies out there?

Yeah, I think probably what I said off the top, like security is my major concern is making sure that, you know, when we're dealing with professional services businesses, We want to deal with, you know, elite companies that have the best client lists. They don't want to deal with a company that's not putting security first, data integrity and data sovereignty first. So that's the first thing. The second thing is, like, as a business, when I go in to talk to a customer, they know I've run a business. They know that I understand every aspect of their financials and how their KPIs might work internally. So again, rather than going, let's just build a software for software's sake, the first phase is to map out what processes are actually going to move the needle. And the second phase is that commercialization after we've built that workflow is how can we turn this category leadership into something that can be sold to every other business like you at the other end, and you can get a revenue share, and we can both you know, create revenue down the track from the work we do together up the front. So that's one area of, you know, really being able to differentiate yourself. And I think the other thing is, you know, being able to sit with someone and talk about regulation and law and say, look, if it's regulation-heavy, there's lots of boxes to tick. To be the company that actually goes in and understands the detail behind it That means you're a sophisticated player. Yes, we're building software like everybody else, but we're service with the software, service first, then build the software once you understand those requirements. That's very different from a churn and burn type, yeah, let's just build a workflow and deploy it. We can do that as well, but really we want to be there, and once we've built one with the client, we want to build out a whole suite more. So, Yeah, I think again, if I get 20 clients, that'd be enough for me. I don't need to do 1,000 deployments. I want to do 20 really, really high-quality deployments, and that'll be at the top end of the market rather than for every small corner business.

And I see you have this assessment form on your website, which is pretty significant. and different. And I also obviously see that you have a different background, right, like in M&A and so forth. Do you integrate like, um, some of your M&A background into the, the actual service?

Absolutely, yeah. So with one of the clients we have, I was talking about it yesterday to a potential another client, is once they— they were a particular type of law firm and it's quite narrow, like it's quite specialized. So not many lawyers do it. So it meant when they commercialize, if they wrap it up and say, let's go find, you know, another couple of law firms, there's not hundreds of law firms that need this service. So their path to commercialization is, is really bad. But because we've done the service at the front, we'd leaned out their business, we'd mapped all their workflows, we'd brought it back to the, the impact and the cost benefits it could have. They went, you know what, we're now the category leader in every single workflow. Let's go and buy some other law firms that haven't done this because we know as soon as we integrate our method into that law firm, we're going to have an efficient business and we can buy it cheap and turn it into a highly profitable acquisition for us. So all of a sudden they've gone from, actually our pathway is not through commercializing the tech, our pathway is through commercializing the workflow and we go into like a buy and acquisition mode. So yes, my M&A background has helped define that pathway to commercialization. Once you really understand the business, you build a great business first and the software that you've built is helping it become a great business. So those things sit symbiotically for me. So we're after category leaders or building a category leadership position, which then opens up M&A.

Got it. Uh, very interesting, Tony. Where can people find out more about you?

Uh, NP1 Systems. That's, uh, N for Nelly, just in case you can't understand my Australian accent. np1systems.com. And, uh, yeah, I think, uh, service with the software. And I get— I know that's part of the thesis. A lot of people are saying that, but not many people, I would say, who are starting up businesses like this want to do that deep regulatory heavy kind of processes. I started in telecommunications. I like boring businesses. I think boring businesses are the best.

I sort of second that. Tony?