Cracking the Code of Startup Success w/Mark McDermott

Welcome to another episode of the Whole Human Podcast. My name is Peter Sorgenfrei, and today I have with me Mark McDermott.

Hi, thank you for having me on.

Mark is the co-founder and CEO of ScreamCloud, a company he co-founded close to 10 years ago at the time of this recording. But Mark has also done a number of other startups. He's an advisor to startups, super experienced. I'm very excited for this conversation. Mark, for the few people who will listen to this or watch this on YouTube who may not know you, would you mind introducing yourself and tell everybody what you're about?

Sure. Well, look, thanks for having me on, as I said. So my name is Mark McDermott. I have spent over 20 years working in the technology sector. Um, for the first part of it, I was running an agency with my 2 co-founders doing design and build of mobile apps, websites, web, web applications, uh, for a number of brands in the UK. Um, and then really in the, in the second half of my career, uh, has been more on the startup scene. So, uh, over 10 years ago, just, well, just over under 10 years ago officially, uh, but over 10 years in terms of the project, we started a company called ScreenCloud. ScreenCloud is a cloud-based SaaS digital signage platform that helps customers all around the world control their network of screens. So the screens you see out in the world, like advertising screens or in quick-serve restaurants or in retail, that's typically probably how you come across screens in your life. We work on those, but we also mainly work on screens that communicate. So screens that are facing employees or students. All around the world, giving them information via large TV screens.

And today that company has grown into, I think, at least 5 global locations. And you just had like an offsite in Marrakesh, is that right? Where everybody came together. How many people are in the business today? How's it going?

Yeah, so I think today we're 115 people and we're hiring. So we're growing. The business is profitable. As you mentioned, we have 5 hubs around the world. In Bangkok and Belfast, we do our engineering. London in the UK is HQ. And in America, where most of our customers are, we are in Charlotte, North Carolina, and Los Angeles in California.

And so here is the easiest question of all. What do you attribute your longevity and success to with ScreenCloud? What have you done right?

What have we done right? Well, funny enough, I was reading a report about the market just this week that's been doing by some consultants who are kind of like looking at the market for several companies in here doing a bit of benchmarking. And what they said is that ScreenCloud has been consistently ahead of the market in terms of the technology that we provide. And I think this really comes back from our DNA. Fundamentally, we're web developers, you know, me and one of my co-founders, Luke, You know, we started coding for websites back in the '90s, so we're the sort of early children of the internet, if you like. And we look at the digital signage problem through the lens of web development, which means we come at this industry with a fresh perspective. We don't, we are not born out of the audiovisual world or the hardware screen manufacturing world. So we look at it through the lens of web development, and I think gives us a fresh perspective, which I think our customers are increasingly understanding our vision there and coming across to that. So I think that's been a key part of our longevity.

And just because I'm curious, how did you and Luke meet? You know, how did the co-founding team come together?

Well, it was actually me, Luke, and David. So we actually all met at a small agency in London that we were recruited into called Reading Room. Luke was an engineer. I came in as a technical project manager, and David was a marketing director, and we all Became friends there and we worked together and built up, I suppose, mutual respect and friendship there. We actually left the business independently of each other, all started doing freelance things, and then we came together and formed our business in 2004 and sort of never looked back from there, really.

And I think Luke is in Bangkok, is that right?

Yeah, well, he was in Bangkok. He's actually in Koh Phangan now, the island of Koh Phangan, since the pandemic. But yeah, he was in Bangkok for almost 20 years. Actually, funny enough, the funny story is the day that we all joined up and became a business in 2004 is also the day that Luke then left the country. So it was a bit of a hi and bye. And he went to actually form an office in Thailand. This was quite early days for having a web development team in Thailand. The internet connection in Thailand was pretty bad back then. But actually, the first person we recruited was a guy called Jarasak, or otherwise known as A. He's actually still an employee of ScreenCloud today. He's one of our directors of engineering. And so yeah, our very first employee is still with the business 20 years.

That's amazing. So you are at the forefront of the technology. You've obviously figured out how to manage the co-founding dynamics. You figured out how to manage being remote. You know, we're 5 minutes in. Let me, let me try another swing at you. So what hasn't, what hasn't gone right? You know, what, what was something where you, you failed in the last 10 years?

Oh, wow. Well, I mean, the thing is like so many things don't go right. I mean, I, I think it's almost like the default really for most businesses, you know, building a business, growing a business, especially through various market conditions is extremely challenging. So, you know, I, I definitely don't believe in that kind of, you know, failure porn, you know, which sometimes happens, which is like, here's everything that Like we should have definitely like lean into failure too much. But I think we, I think there was a difference between failure and things going wrong. See, failure is like when it's over, right? That's a kind of fait accompli. Now you're going to do a Twitter thread about everything that you should have done differently. But like responding to things that aren't working, that's, that's the day-to-day course of business life. So, I mean, like, you know, my mind sort of floods with examples, but I think the main thing is that when things go wrong, it's your opportunity to course correct, learn and improve. And I would say that sort of things not working is just part of the process of things working, if that sort of makes some sense. Your job really is to identify that it's not working out and make those changes. And as you make those changes, you've got to take that experience on and get better. So really, I suppose things not working out is just an iteration towards things working out. And then all you've got to really do is make sure that you're solvent in that time. You have enough funding to keep going. Um, and that you are not losing your customers along the way. Um, and that you are, you are maintaining a degree of momentum, even if, you know, getting a few things off the ground is, is tricky.

And, and again, you, you have, uh, you know, a fairly mature way of describing it because you've been doing this for a while and you've been doing a number of companies. So if I were to paraphrase, essentially you guys have been good at not dying.

You think you have.

Yeah. Good at not giving up, right?

Because— I sometimes jokingly refer to us as the cockroach in a nuclear storm, you know, pluck crawling out of the rubble. I mean, if I was to give a good example of that, I mean, obviously being in SaaS, you know, we had that huge, huge bubble in the 2020, 2021, even 2022 era where all of this money was flooding into SaaS. You know, the prices of the people were going through the roof. Everyone had so much cash to burn on marketing. But obviously for ScreenCloud, that was not a, you know, a golden era. Digital signage goes into mainly public spaces. In COVID, most of those spaces were shut. Um, this was a blessing and a curse because it also made us find our niche, uh, working in the manufacturing sector with deskless workers, but we can come on to that later. But basically, we were kind of left behind on that bubble. And, you know, it's sort of, you know, surviving through that when everyone else is thriving is not easy, you know, keeping a team motivated, you know, even getting certain amounts of growth, even when most of your customers are shut, is like really, really difficult. But, you know, that builds this, this important muscle called resilience, which is what you absolutely have to have if you're going to do this over a 10 or 20 year period. And to be honest, unfortunately, resilience is built in hard times, not in good times. And you generally will get better at being a leader, business leader, whatever it might be, under, under challenges and with, and with restrictions placed on you that are probably placed on you that you have no control over. When things are just all going really, really well, I mean, really, it's just keeping up with it is the only real challenge. But I don't think you really hone your craft in the good times, unfortunately. I wish it was the other way around though, obviously. I'm not a masochist.

Few people are, but of course, having a 10-year track record means that you've had a number of successes and a number of near failures or setbacks along the way. So that comes with it. I sometimes talk about it as you said, you know, it is when things are difficult that you learn, lead and manage. I sometimes talk about sailing. You know, it's not hard to get from point A to point B if the sun is shining and there is a constant wind. It's when it's raining and wavy and there's no wind that you have to really know what you're doing in order to actually get to the point that you're— that you want to get to.

Yeah. Yeah. And there isn't really a book for that. Unfortunately, most people don't like to write books about the hard stuff. So, You know, you have to learn it by listening to podcasts like this really, and have people actually be honest with you.

And that's, that's why we're doing it, right? That's why I'm talking to you today and why we're not doing the Gary Vaynerchuk or Alex Hormozi, like just do these 3 things and everything will be fantastic because that's not how the world works. It's not how it works for 99% of us, but for 100% of us, right?

Yeah. Yeah. Yeah.

So, so this, this business is now profitable. You mentioned it's going, but You funded this by yourselves to begin with, but then you shifted to taking some external investment, or can you tell me a little bit about that?

Yeah, absolutely. So, so we had, um, we'd be, we were profitable in the agency business. Uh, so we've always been very capital efficient because agency businesses always have to work out of cash flow. You don't raise money for those companies. You know, the projects are not recurring, so you have to be very, very mindful of your money, uh, growing an agency business. And that, that is, that's also another important muscle to develop. Um, over time being, you're understanding how to deploy capital. If anything, we're, maybe we were a little bit too, uh, cautious, you know, because it was all our own money. Uh, so if anything, I probably would've doubled down harder knowing that ScreenCloud was gonna be successful, but that's easy in the rearview mirror. So anyway, we, we, we had a portion of capital that we, we put into, into the, the business, but it, it had, it was potentially threatening the agency and we didn't want to just collapse the agency just doing this. So We'd put in as much as we could, but it was clear to Luke and I that we were probably gonna need about another year of runway before ScreenCloud could maybe go onto the next stage. So we went out and did friends and family and angel round, quite a small, about £120,000. Wasn't like huge by, you know, some of these seed rounds today are much larger. And that was just enough just to have a small handful of people dedicated on it full-time and not having to go back to the agency. Because the difficult thing is you're funding it out of another business, that other business is still the parent of it. And when that other business needs you, and you know, projects go wrong, or they get very busy, and they need some help, you know, you're going, you're constantly, you know, living that double life. And what Luke and I really wanted to do was say that there's a line in the sand. And for us, that was April 2015, which was the day we incorporated, then we went out to raise money. Solely against that asset, that one thing, ScreenCloud. And we said to those angels, we are full-time on this. This is, you know, you're giving us your money. We respect that investment. And by return, we will give it everything we've got to make this thing work. And, you know, really it was at that period that ScreenCloud started to accelerate. Also, you know, you know that you've got it all on the line at that point and you're also taking other people's money, which I don't, you know, especially from individuals and especially friends and family. I don't take that responsibility lightly, and I was really determined to give them a good return. So I think it just, it created a sense of like real deep focus and need to like get this right. And that was the start of that funding journey, although I'd never raised money before. So even just doing that alone was kind of a challenge.

I think you make a number of important points here. One is the focus required, right? Because we see a lot of people having You know, today it's a side hustle because they're corporate employees and then they're working on something, right? Or there are agencies that are trying to incubate new ideas similar to how you guys did it, but they never actually send out the Martian rover, right? They never send out the unit itself. And so they're caught between the 2 businesses. Uh, the funding is not, uh, separate. So there's always, you can always go back to the pear in the bar. Yeah, it's like the Muddy water that never moves up, right? And you don't learn independence, and you don't thrive unless you actually make the move away from the mothership and give it the focus that it needs.

A funny thing, like, as you get older, I don't know if you've experienced as well, like, I'm in my mid-40s now. I'm not sure if you're in and around that era. Like, when you live, when you live in an industry long enough, you just start to see the cycles happen. And so, you know, back in 2010, we were doing all of these little side hustles on the edge, these little mini projects, like ScreenCloud wasn't the first app we built for ourselves. We probably built about 20 different things. They were all profitable, making a little bit of money, kind of doing it. And now you see it now with this, like this sort of solo entrepreneurs, you know, saying, hey, just build some SaaS and live in Bali. And like, you know, it'll all be fine. And you know what? It does work. It does work. We made it work as well back then. But if you're really going to do something big, you are going to have to focus on it. If you want your software, not just to make you good income for your life, which is nothing wrong with that. Like, you know, to be honest, sometimes I dream of going back there, honestly. But if you are ambitious to say, actually, I want the world to benefit from my work properly and not just get enough money so that I can live a nice life, then you are gonna have to focus. You are gonna have to get serious and you are gonna have to go through, well, frankly, a hell of a journey to do it. But it's worth it, I suppose, if you really do believe in the mission of what you are trying to solve. And you are not just doing this to benefit your individual life, but actually to do this to To try and make something really good and solve a problem, you know, that it's just going to be different.

You know, you and I are similar in age. I'm much older than you. I turned 50 this year.

So, amazing.

Great. I mean, I allow myself a little bit of wisdom.

Yeah.

Yeah. So one thing that I, that I thought about as you're saying this is this solopreneur journey that a lot of people are having, but your point about if you really want to make an impact on the world and if you really want to make something that is not just a lifestyle business, And there are solo entrepreneurs that are making millions of dollars a year with, you know, 90% profit margins. That's a little bit more than a lifestyle business. I mean, that's, that's pretty good.

But it also, that's a very, very few people that do that. Like 0.1.

And my point was going to be another one, which is, I think there's a formative experience that most people should give themselves, which is actually building a team, right? This idea that going out and convincing, in your case, you had to convince some money people, right?

Yep.

Then convincing some others to come work with you on this thing and inspire them and manage them and see them grow and see them leave in some cases.

Yeah, yeah.

Or see them stay with you for almost 10 years like you just described. That experience and what that teaches you, not just as a business builder, But also as a human being, I think it's something that everybody should try in their lifetime.

I, yeah, I mean, I couldn't agree more with you. I think, I think, you know, it just benefits society as well, right? Like, you know, part of the job of doing this is to create jobs. It's actually to pay tax, right? Like, you know, it's the, these are not bad things. These are things you, we should be doing to contribute to a healthy economy and a healthy society. And to your point, especially in the early days, taking raw talent like we did, you know, because frankly, you're not going to be hiring senior VPs in your first year and not really got $120K to spend on the whole thing. You know, you're hiring people out of college or even not, you know, in many cases, some of our best people didn't even do higher education. So I think that's, uh, you know, very important. You've got to look for that raw talent, but that raw talent doesn't just come in and And sort of be great. You know, they've got, they've got the hunger and the drive, but they need the mentorship. And like, some of the proudest memories I have of ScreenCloud is how we have nurtured people along the way. And to your point, some of the people who've been here for over 7 years have recently left. One's gone off to do an MBA. The other one's gone off to a larger company to see, you know, as an account manager, you know, to go on to that bigger journey, you know, and like, you know, I'm so proud of them. I'm so proud of their journey and their growth. Uh, they've also got early stock in ScreenCloud, and we're gonna soon do a recapitalization for them, and that might help them buy their first flat. Like, this is all good stuff. And, you know, there's a lot of shit which comes with this, right? There is a lot of shit that comes with this, but things like that, like, that is worth it. It is worth it. And also, it's not just on the team. It's also the journey you go on with your customers, especially your early believer customers and even your early angels, you know, like who have come with you. Who gave you a shot and then you are returning back, you know, maybe in our case, 60 to 100 times their revenue back to normal people. This is good. This is healthy. We should be celebrating more of this. And I think the problem is that in today's world, for very good reasons, which I understand, we're very short-termist. People need success and they need it quick and fast. And I think probably because the world is really tough and you do need to generate loads of cash if you're gonna buy a property or something. But But there is something about grinding it out over the long term and doing it that way, which, you know, when we're all even a bit older and we look back and reflect, those will probably be the key takeaways that we take from this. Um, you know, when we reflect on that journey, this is definitely true, but people have to figure that out for themselves. They don't have to listen to middle-aged men talk about it.

You know, that's exactly right. Well, they certainly should listen to us because you and I have all the answers.

Yeah, of course. Yeah, yeah, yeah, yeah.

But, but, but, but another thing that strikes me is this idea that, you know, there's a bunch of people who are going to be listening to this and watching this and maybe read the stuff we're going to write, or I'm going to write from this conversation that are thinking about starting their own thing, right? So they're in some corporate job or they're in some situation. They're like, I, I, I want to be an entrepreneur. I want to start my own company. What one piece of advice would you give somebody listening to this thinking that, what would you tell them?

Well, yeah, right.

Well, I mean, can I give 2?

Is that okay? Can I give 2?

You're allowed 2 just because I'm generous today.

Yeah. Thank you. Okay. So on the personal side, I would have a full and frank conversation with your family and just think about your personal situation. Get yourself personally ready for being quite poor. For a while. And also get your friends, family, your partner to understand that for at least a year, a year and a half, they're not going to see you much. And you're probably not going to be the most social person to be around, or even the happiest person to be around, because you're going to go through quite a big journey, which is probably going to dip down fairly low in that period. And you're going to be tired. And they just— you need to look them in the eye and say, look, you know, are you okay with me going on that journey? Do you support me on that? Because That's a conversation I think that not enough of us have upfront because this doesn't just have an impact on you. It has an impact on the people that care about you. And I think you should probably prepare them for that, which I didn't, by the way. Um, and then I think on the business side, I would say, you know, don't, don't try and invent a problem. You know, the world is full of problems, you know, and if you are already working in a corporate job, you can probably see what those problems are. So even though you might want to dismiss the corporate life, don't necessarily dismiss what the corporate life is trying to fix and solve. And if there's, if you've got domain expertise, which you will have in something, you identify that issue and double down and scratch on that. Don't sort of try and ideate some fantasy problem idea out there. Too much of the stuff that we create isn't really solving any kind of purpose. And yet the world literally has problems left, right, and center. So just open your eyes and look at them and find a problem that you're passionate enough about fixing for the next 5 to 10 years. Those of you who receive this advice. I love them both.

I think the frank conversation and really making sure that the people around you and you yourself understand what's going to happen once you take this jump, right? I typically ask people when I have this conversation with them live, I say something along the lines of, well, you know, how much gas do you have in the tank financially?

Yeah.

Can you sustain? Emotionally with yourself, right? Do you have a belief that will carry you through this? And then essentially, how much credit do you have with the people around you? Are they willing to go through this journey with you? Because to your point, they will. On the business side, there's one thing that I think many entrepreneurs make the mistake of doing wrong, and I'd like to get your perspective.

Yeah.

I think they hide too long what they're working on.

Oh yeah. Yeah, yeah, yeah.

There's this culture of, oh, I'm doing this in stealth. I'm like, unless you've literally figured out how to, you know, grab a landing rocket like Elon just did or something that is really unique. And even then it's so hard to—

No, that was very much not in stealth. I mean, he wrote blog posts about that 20 years ago saying that's what I'm intending to do.

Exactly.

He put that on the COVID of Real Republic.

Right. Stop being so cagey about what you're doing. The more people you tell about what you're doing, a lot of people are going to be like, that's a stupid idea. For example, Matt, Mark, if you, if you 10 years ago told me you're going to do this thing, my first reaction would probably have been like, really? Is that, is that a problem we need to solve? Right?

Yeah. Or isn't that already solved?

IC screens are already solved. Right. If I'd been a little less evolved. So yes, tell people about it. Understand that most people don't necessarily get it. Some people will be super enthusiastic, but they probably also don't get it.

Hmm.

So take whatever input you get a little bit verbatim, but just be like open about it because you never know who's gonna help you. Literally yesterday I sat with a guy, I haven't seen him for 20-odd years. We met randomly. He, I invite him to coffee. We talk about something he's doing. Immediately I had 5 people who could help him get that thing to go further. If he hadn't told, if he had just been like, yeah, I'm working on this thing, but I can't really talk about it because he knows I'm involved, that wouldn't have happened.

Exactly. No, I think, um, it's a very good point and people should really, really listen to that. Uh, if I was to add anything to what you just said, it's like, just, just take a kind of really like step back and look at it mathematically.

Right?

Just look at it as the probability formula, right? When the world owes you absolutely nothing and you've proven to the world absolutely nothing because you've just begun, right? Realistically, probabilistically, who are the people most likely to give you even 5 minutes of their time to listen to what you have to say? It's going to be the people you know. So I would take it— I took it on myself at the very beginning that every single human that I knew and cared about me in some way, absolutely had to know that I was working on Spring Cloud and what Spring Cloud was and what I needed, which was either early investment or early customers, right? And that was it. And I've met so many founders who are a bit embarrassed about that, or, you know, weirdly kind of paranoid about someone stealing their idea. Trust me, that just doesn't happen. And also, if they did, it would be a poor imitation of you, because like, if you're going to start a company just by seeing someone else's idea, you clearly don't have the passion for that problem. You really haven't figured it out properly. You're just a magpie. And I don't think people really do that, if I'm honest. Um, they generally try and steal the ideas of people who've been successful, not the ones who actually have a career.

The internet doing clones of California.

Exactly. Exactly. So, you know, to be honest, the imitators come as a sign of early success. So I would just take it upon yourselves that like, you know, don't try and cold pitch that really cool VC on Twitter. Like, you know, again, 1 in 1,000 might get a meeting, you know, with that, with that person. But The reality is, you know, it's the people around you who are going to help you. And if you don't tell them about it, then you're really kind of, you know, going into battle with one hand behind your back, just wiggling your fist around.

So, Mark, as I feared, we're getting to the end quite quickly of the episode. So we might have to do an episode 2 at some point, if you'll indulge me. Of course.

Yeah, it's been good fun.

Yeah. Great. Fantastic. We will definitely do that to the people listening. We will make an episode 2 of this. But as a final remark for today, what is something that you know today that you wish you knew when you started about the journey you've been on, about building StreamCloud, about all the things you've gone through?

What do I know today that I wish I'd known? At the beginning. Okay. I, I think, I think this is probably the one that is most pertinent. Like, again, there's so many things I could say to that answer, but like there's this phrase that it's darkest before the dawn. Have you ever heard this one?

Yep.

And I don't quite know why. I'm not a religious person as such. I don't really believe in fate, but in every cycle, and there's been multiple cycles, Where things have got right to the wire of like, okay, this is it. This is the day. This is it when it's all gonna go over. Somehow the universe just seems to deliver, but it's right at the last minute and I don't really understand why. And I think partly it's probably because of the energy you're giving, the work you're giving, the focus you're giving. Maybe that's part of it. As you get, as you get close to, you know, you, you're ruthlessly prioritizing when you, you're 5 days from being broke or bust or whatever. But there's just something that happens, whether it's a new customer coming in or whatever. Like, I don't know why, but the universe seems to really deliver people who work their ass off and really give a shit and push and are sort of, you know, relatively authentic in what they're trying to do. I mean, you know, I'm sure not everyone who's ever worked with me would agree with that, but, you know, you can judge for yourself based on the last 20 minutes. And I would just say that that's the moment not to quit, that actually Like that might be the moment that the biggest breakthrough happens. And I can count like multiple times in the last 20 years where I felt that. And even today when things aren't going quite right here and there or whatever, trying to make a quarter, this or that, like I have to remind myself that that pattern of the past has been consistent and that I should believe in it. That doesn't take it for granted, like, but there's something about that. So if anyone is in that moment right now, I hope that those words give you some comfort and some hope.

Those were, that's an excellent suggestion. To surmise that or make it a little more internet-friendly, short attention spans, I'd say just one more day.

Right. Yeah.

If you're in this situation, go for another day. See how you feel tomorrow. See how you feel tomorrow afternoon and then take another day. As long as you're not sacrificing your personal physical or mental health.

Oh well, we'd probably start the first bit of that tea to be real.

We'll pick up in our second episode. Mark, I want to thank you so much for your time today.

No, it's been wonderful. I really enjoyed the discussion and thank you for those interesting questions. It's not the normal podcast questions, so I appreciate that. That's very, very interesting and I hope it's useful to the audience.

I'm sure it will be. We try not to be normal and to everybody who's listening. I appreciate you being here. If you know somebody who is as exciting to talk to as Mark, or if you have any themes or topic that you want me to cover, please do let me know. And until next time, thank you for listening.

Bye.

Thank you.