December 10, 2024 ā¢ 58 mins
šļø In this re-run episode, we sit down with three-time founder Timothy Armoo @timarmoo, who shares his inspiring Leap story, starting his company while still at university and later starting @Fanbytes, which he sold for 8 figures at the age of 27.
Episode Episode Highlights:
Childhood and Early Influences: Discover how his journey from humble beginnings in Ghana to the UK fuelled his ambitions to be successful at an early age.
Growing as a CEO: Gain insights on how he evolved as a CEO as the company scaled and what he would do differently.
Team building: Hear valuable insights on what to optimise for when building a world-class team.
Fundraising: Tim shares his insights on why he chose to be very intentional around the type of funding he used to fuel his business.
Achieving an 8-figure exit: Hear about how Tim achieved that 8-figure exit and how his life has adjusted since. Join us for an intimate, enlightening conversation filled with gems, laughter, and lessons.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
There's this saying that businesses are bought and not sold.
(00:02):
So that phrase, businesses are bought and not sold, is complete garbage.
Businesses which are of value are sold every single day.
So the idea of being passionate is massively overrated at the beginning.
The hardest part of being a CEO is that you don't know what you don't know.
There's a thing that I always say is like, you create yourself, you don't find yourself.
And I think so many people, especially in business, are like trying to find.
(00:27):
And then at this point I'll be ready.
And it's interesting, right, because having a business partner is like a marriage, right?
And you don't just propose for a date.
When you started Fanbites, did you lead with your heart or did you lead with your head?
I led with my pocket because the company got bigger
and I got less passionate about the things I was doing.
This is the Startup Leap, where we explore the stories of incredible entrepreneurs
(00:48):
who have taken the leap to build their own startups.
Get ready for real, raw and relatable discussions,
nuanced conversations that unearth insights into the realities and possibilities
as you explore taking the leap to starting your own company.
We're your host.
I'm Maria, operator and investor and partner at OpenSeed VC.
(01:10):
I'm Yvonne, an early stage tech investor and partner at Local Globe.
And welcome to the Startup Leap.
Yvonne and Maria are partners at Local Globe and OpenSeed VC, respectively.
Local Globe and OpenSeed are independent of the Startup Leap podcast.
Any statements made by Maria, Yvonne or the Startup Leap guests
are solely their view and are not advice.
(01:32):
Endorsements by the Startup Leap, its guests, Maria and Yvonne.
So, Tim, in the midst of being a student at university,
you decided to start your business.
While other students were studying.
Yes.
And one of the things that you've said is you don't believe that you actually have to have a passion
(01:53):
before you start a business, right?
Oh, we're going there.
Yeah, we're going in.
We're going there.
And so when you started Fan Vites, did you lead with your heart or did you lead with your head?
Tell us how important was the passion behind?
I led with none of them.
I led with my pocket.
Okay, tell us more.
I basically saw a market opportunity in the Influence Award and I thought,
(02:15):
all right, cool, we're going to capitalize on it.
So I think that the idea of being passionate is massively overrated at the beginning.
I became quite passionate about it, I'll say in year three.
If I was to think about the waves of passion I had for Fan Vites,
it probably went no real passion, market opportunity, and then a bit of passion.
(02:37):
And then basically like year five, I was like less passion
because the company got bigger and I got less passionate about the things I was doing.
And so you wasn't driven by passion, so it was the opportunity rather that drove you?
Yeah, I think the opportunity, the money that was possible,
and then I think halfway through it was more like the competition.
(02:57):
Right.
So I started off by thinking, oh, this is a good way we could build a business that we could sell.
And then halfway through I thought, oh, actually we could win this market.
And I got driven by competing against other people.
And the agency space.
So you started with the idea to sell in mind.
So yeah, from the beginning, was that something you did with that startup?
(03:20):
Or have you done that before?
Because I know you sold a startup before.
Yeah, so I think so the business I sold before Entrepreneur Express,
bear in mind, we're using the word like sold.
It was only for like 110 grand.
Yeah, but it was sold.
I mean, it was sold.
It was sold.
And how old were you at that point in time?
I was 17 then.
That's a lot of money for a 17 year old.
(03:41):
So like at that point, it was almost like, wow, that's incredible.
Now, did that inform the way that I thought about business in the subsequent business?
I say yes, because it made my eyes open to the fact that you could just think about something.
And then at some point, someone will pay you more money than you thought was possible.
(04:02):
And I just thought, wow, this is an unbelievable game.
Right.
And I think if I hadn't had that prior experience,
I still would have started a business to sell, but I don't think I'd have believed in it as much.
OK, so we're going to get back into the whole exit because I think that's like super interesting.
But like, take us back earlier into your childhood, your early beginnings.
(04:23):
What were the things that really shaped who you are as an entrepreneur?
I mean, obviously, fan bites was your third business.
Yeah.
Take us back to the first.
You started early, started really early.
Yeah, so I started my first ever company at 14.
I think that big desire was because I just wanted to do something slightly different.
So the story actually goes that I did a bet with a friend of mine where we bet each other, like,
(04:47):
well, we see who would see 500 pounds before we turn 18.
And basically, the bet was, all right, cool, we'll see who can do it.
And I just decided that the way to do it would be to start a tutoring business.
And of the back of that tutoring business of getting 65 tutors, connecting them as the middleman,
I was like, wow, this is amazing.
(05:08):
Of the back of that, that spark in my head of, wow, this is something that I could just do,
was what was ignited.
What's really funny, actually, is I started this year, I started taking therapy.
Oh, really?
And my therapist, actually, when I wrote down my bio, my
therapist was like, you know, you talk a lot about your exits being quite a defining moment for you.
(05:31):
But I think a bigger defining moment for you was starting a company at 14.
And she was right.
She's always right.
She was right, because what she was saying was like, that gave me that little bit of confidence to
know that I could do something.
And then I started doing it.
That gave me that little bit of confidence to know that I could do something.
(05:54):
And then at 17, then it starts in Entrepreneur Express and selling it for what really is like a very
small sum, but a big sum for a 17 year old.
It just like increased the flame a little bit more.
And which therefore, I think when I was 21, when I started Fanbites, I just had this sense of, well,
well, duh, this is obviously going to happen.
Yeah.
(06:14):
So the 14 year old business was to some degree a lot more significant than the 27 year old exits.
Because it started, it was what kickstarted, I guess, that domain.
And would you say you did anything different as you kind of went through each business?
Think about it, like for the first, what did you do in the second that you definitely did?
The first and the third second.
So the tutor business failed because basically I was the middleman connecting two people, right?
(06:39):
People who needed tutors to people who, to the tutees, right?
Tutors, tutees.
And the reason why I failed was because basically, as with any physical middleman business,
when I connect someone, they just go behind my back.
Disintermediation.
Exactly.
Like there's no reason for you to come back.
Yeah.
Especially if it's tutoring and you really like your tutor.
(07:01):
So the big change that I did to the second business was that I was that I became the
person who owned the audience.
So Entrepreneur Express was basically an online business publication.
But the way that I drove traffic through was through like Facebook pages and all that stuff.
But the big thing was like I owned the media rather than being the middleman.
(07:21):
Now, I did become the middleman when I went to advertisers and I got them to basically
advertise in my blog and stuff.
But I got a bit more of the value.
And then in the third business, Fambite, you would think it's a classic middleman business, right?
Because you're connecting brands to influencers.
But having learned from the first and the second one was how do we add more value at like as a
(07:46):
company?
So that's when we added like insights and technology and data and all that stuff,
which made it seem more than just, hey, we have a bunch of emails of influencers.
But actually, we are a one stop shop for the full service of you being able to run influencers.
So that's basically what I learned from each stage.
Cool.
I mean, 14 is very young to start a business.
I know you said that it was a bit of your friend.
(08:08):
Yeah.
Just looking back on your childhood, were there any moments that you felt spark that
entrepreneurship spark within you?
Yeah.
So I think there's two big moments.
The first one was being sent to Ghana before I was six months old.
So I was born here in Hackney, but then I got sent to Ghana to live with my grandma and I stayed
(08:29):
there for 10 years.
And I think coming back here, I had this feeling of like, who am I?
And I need to give some and I need some kind of significance in my life.
And so for me, doing business was a way of driving that significance.
And then actually, the second thing was so entrepreneur express was started when I was 17.
(08:50):
But at 17, I had one, I guess, at 16, I had just joined a sixth form, like a boarding school,
private sixth form.
And everyone there was insanely clever.
So I'd gone from basically like a state school where I was the big dog and I was like the
smartest person to then being surrounded by geniuses.
And I think at that point also, I had this feeling of right, I need to prove myself in some way.
(09:14):
Yeah, differentiate yourself.
Yeah, exactly.
Right.
Because I can't compete with, you know, like, Luke and Francis and Sam, who are basically like,
they have got 100% in further maths at 15.
It's like, what do I do here?
And so when you realize that, like you either say, I'm either going to compete or I'm going
to like change the game completely.
(09:35):
And so this was the reason why I think in Christ Hospital, I was like, OK,
Christ Hospital was the name of the school.
I'm in Christ Hospital.
I was like, OK, I'm going to win this business game because all you nerds don't want to win
that game.
Entrepreneurship was your edge.
And he didn't like it.
I remember the day after entrepreneur.
(09:55):
No, I remember whilst I was running Entrepreneur Express, I ended up basically being able to do
an interview in a single day with like Richard Branson, James Kahn and Alan Sugar.
And I came back to school.
I said, oh my God, this amazing.
I was like showing pictures and we were like, OK, like jealousy was creeping in.
(10:16):
Primarily because it was almost like.
I was doing something that they hadn't even thought was possible to them.
It was like, go to school, go to Oxford.
A ton of them went to Oxford, right?
But but actually, like deep inside, they were like, I don't want to just do the conventional
path.
And here was this guy who had basically come into the school a year before and had done
(10:38):
all of that.
Yeah.
So fan bites.
One minute.
What was the USP at the time?
What did you see in the solution that you kind of proposed at the time?
The solution.
OK, so the USP change over time.
But we saw the wave of social media influencers.
They use the market trend.
Yeah, exactly.
(10:59):
So we saw the wave of social media influencers rising and rising and rising.
I had studied and read enough about marketing where I realized that in any new industry,
there's always like an independent wave.
So there were a bunch of when TV became very popular.
All right.
We now need to just have TV marketing companies.
(11:20):
And then over time, it ends up being like a consolidation.
So like a big company that owns TV and radio and PR and podcasts.
So my hope thing was, wow, there is a big trend going on in the world of social media
influencers.
I'm part of the audience who are being influenced by these social media influencers.
And if I'm part of this audience, and that means brands will want to spend a ton of money
(11:41):
to tap into that.
We don't even need to be number one.
We just like need to be in the market.
So there were so many times during fan bites, I would say to my co-founders and my team and
our investors, I'd be like, you know, we don't have to win.
We just have to not die.
(12:02):
Because like this market is going to grow.
Tailwind is so strong.
And if we are like in the top 10 companies in the UK, we will win.
So that was the way that I thought about the business opportunity.
Interesting.
Did you, what was the distance between when you graduated from?
I started in my second year of university.
Interesting.
Talk to us about that.
(12:22):
I mean, wow.
How do you manage a business as a student?
Oh, it's easy.
Just do it.
Really?
Yeah, like, it's not hard.
Okay.
It's just not hard.
People would argue that it is because then you have to something has got to give.
What do you think gave?
Like if you have to go to class.
Now we're talking.
So you have to kind of.
(12:43):
But you graduated.
Funny thing, because I guess like a lot of people talk about like college dropouts,
like Mark Zuckerberg dropped out of university.
Yeah, you didn't drop out.
You didn't drop out.
You decided to continue.
The reason that I didn't drop out was because I felt so.
I felt like I had to finish it for my parents, especially my dad.
(13:05):
So my dad, unfortunately, had been ill.
He had a stroke whilst I was in university.
Actually, no, in sixth form.
Then he had a, unfortunately, he had a fatal stroke when I was in university.
And I always had this kind of feeling of I should complete this for him.
And when it really came down to it, though, like I knew in my heart that I wasn't ever
(13:30):
going to really use the degree.
Yeah, but I did it anyway.
It was like a principles or like.
Yeah, just as a principle.
But it's quite funny, like in the third year of uni,
I think I was actually in university like.
I actually saw this email from my.
Was it called your head of department?
Be like, do you know that you've only been in class for like 17 days or something?
(13:54):
Because I was always in London.
Yeah, of course, like something has to give about that.
It's incredible that you still were able to do both.
Yeah, but it's almost I don't know, man, like.
There was no other option, right?
Like people. Yeah, I think you think of things differently when you when you know you don't
have a choice. You stretch what it's asking of you and you make it happen.
(14:15):
Yeah, people talk a lot about.
Oh, OK, I don't know.
Maybe I'm going to.
But like people talk a lot about like, oh, I've got a job, but I want to start a business
and I'm finding it like difficult.
And I'm like, well, yeah, it's meant to be difficult.
It's a feature of the book.
I say this. Yeah, it's like, that's the design.
Yeah. So what are you going to do?
Yeah, just yeah, like what do we do here?
(14:36):
Right. And so for me, I think that's a very important thing that I just saw it as hard
and then I just did it.
Right. One question I have is just around like finances.
So a lot of immigrants and especially people from a combo backgrounds, like when they're
thinking about making the leap, they have to consider like, how do I live?
One of the benefits I think you have is the fact that you started very early.
So I almost feel like you kind of had that muscle of high risk, like not having to think
(15:00):
about too many dependencies on you.
And maybe I'm wrong, but tell me about that.
Like the traditional route for most people is, oh, I'm in school.
I just need to finish, you know, get a degree, get a stable job that gives me an income,
you know, get a good credit score, like get a good like that.
Obviously, like the risk to you wasn't so tell me a bit about that.
(15:20):
Do you think it's your upbringing?
Do you think it's just personality?
Like, why are you able to make those leaps?
Like, I'm not really think I maybe you thought about it.
We talked a bit about that.
So I think the two biggest things that shaped my attitude to money was running my business
was number one, doing it young.
(15:42):
Yes, I had zero commitment.
I could work from anywhere.
I could do whatever.
But number two, which to me is even more important, was the type of business that we chose.
I intentionally didn't go for some like we need to raise millions of funding business
in order to succeed.
I chose a business which at the beginning was just like a services business.
(16:03):
And we were profitable.
And then what I then ended up doing was raising money was doing it for a very specific purpose.
And I think the reason why so many people put themselves in a lot of like financial
angst is because they choose a business which needs them to raise a lot of money.
And then they go, oh, no, I need to fundraise for this.
When really, especially if it's your first or second business doing something with
(16:27):
with pretty low cost where you can get started quickly.
Yeah.
Yeah.
Interesting.
It sounds like you were really intentional around the type of business you started.
Yeah, I had one goal in life in my 20s or in my early 20s, I'm still 20.
My one main goal was like, all right, before 30, I basically want to have more money than
(16:48):
I ever know to do.
Where did that come from?
It came from being a poor kid.
Like that was it.
Like, like growing up on Oaken Road, I was like, you know what's so interesting, right?
So I was talking to my friend about this, which was so I grew up like fourth floor
council stay on Oaken Road and we didn't have a lift.
(17:10):
And I always remember certain times coming home when it was like dark outside and like
running up the stairs and just saying to myself, like, I don't belong here.
I don't belong here.
Like, like just like shouting to myself, I don't belong here.
I don't belong here.
And so I like internalize that to myself.
And I think I just I just gave myself a self image of someone who this was just a pit stop.
(17:34):
And I believed in that so much, like so much that almost like, you know, when we saw the
business and people asked me like, do you think it would happen?
I was like, well, yeah, exactly how I planned it.
I said, I'll do this and I'll do this and I'll do this and I did it.
Right. Yeah.
And but I think that came because like as a kid, I just had this like very big sense
(17:58):
of self belief, which came from not having much and thinking I was like,
I was designed to do something different.
So that probably is where it came from.
And to be honest, I think a lot of people have that.
Yeah.
But they feel like they they feel like they need to be special in order to have that.
(18:22):
So I get this a lot from people who say, follow me on social.
They might say something like, oh, that's good for you because you had this.
They go, I had one.
Exactly.
And they go like, oh, because, you know, you discovered social media early.
OK.
But like you could have also.
Yeah.
(18:43):
Really early.
Like people believe they need to have something special, but it's like self you create.
Yeah.
Yeah.
OK.
You create yourself.
Right.
There's a thing that I always say is like you create yourself.
You don't find yourself.
And I think so many people, especially in business, are like trying to find.
Yeah.
Yeah.
And then at this point, I'll be ready.
Yeah.
I get never.
And it never comes right.
(19:03):
You have to almost like.
They postpone themselves.
Yeah.
They postpone themselves.
Like, don't postpone yourself because if you postpone yourself, you keep postponing.
Then you'd be like, I know, 70 and be like, OK, and then I'm going to.
Yeah.
And it's like, no, it's sweet.
Did you ever feel peer pressure?
Like, because I'm just thinking, really?
No.
Like you you're it's almost like you're living a life that's not the traditional like 18 years.
(19:26):
So you probably had friends, probably they look like they were doing well.
Like, did you ever at some point, especially when it wasn't yet glamorous, like fan by 21
being a CEO, 21, like having to think about payroll at 21.
So I felt peer pressure for one week.
Really?
What week was that?
It was actually spring week.
So like for people who don't know, so spring week is when in universities, like the banks
(19:52):
and all those guys come in and like, you know, you can work for us.
Yeah.
I felt peer pressure because actually quite a few of my friends, they were like, oh, yeah,
I've got this one.
Goldman.
Exactly.
But then I was like, I don't want that.
But I did feel a peer pressure, which was a sense of, well, they're doing it.
They seem happy doing it.
Yeah.
And I'm like, and I want that happiness that come from that.
(20:15):
And then I was like, yeah, I just don't want that.
And that exercise of like, what do I want is a useful mental exercise.
I love that.
To make these decisions.
The truth I actually believe is that you know what you want.
It's not what you don't want, actually.
Sometimes you do it by elimination.
(20:36):
You're like, that doesn't sound good.
I have a similar experience where like I was in consulting and I look at the partners and
I'll be like, I don't want that for them.
But I'm just like, and everyone's like, oh, you're doing so I'm just like, no.
So I feel like there's something in you that actually knows what you want, sometimes more
than you realize.
Yeah.
That's a very good way of thinking about it, which is almost negative goes for everyone.
(21:00):
Exactly.
It's like, I don't know if you don't want to do that.
Don't I want to?
Eliminate.
Because that's what you said with Goldman Sachs.
You're like, oh, for a little bit there, you're like, I wanted that.
Yeah.
Actually, no, I don't.
Yeah.
One of the things that influenced me was I got fired from my first ever job because I
outsourced it.
That is so on brand.
(21:21):
Like that is so typical of an entrepreneur.
That's quite funny.
Very smart, man.
Yeah.
I think going through that week that I felt peer pressure, I was just like, you couldn't
even stay in a job for three days selling crisps.
That was the job.
It was like selling crisps.
And the outsourcing, I gave it to my friend to do it and then he found out.
(21:44):
And it was like, you couldn't even do that for three days selling crisps.
And you think you lost a week in Goldman.
Yeah.
Yeah, like, come on, man.
So yeah.
Talk to us a little bit about being a CEO.
So obviously, you're a relatively young CEO, right?
And the company grows, evolves and scales.
How did you evolve as a CEO and grow with the company?
(22:07):
So I think the hardest part of being a CEO is that you don't know what you don't know.
And for the five, six years that we ran FemBytes, it was just a perpetual hamster wheel of every
day realizing, oh, I didn't know this.
Oh, I didn't know this.
And that can either break you or that can make you.
And I changed my identity to be someone who was constantly learning rather than thinking
(22:29):
I was constantly failing.
I think that's distinctive.
That distinction there really helped me because I speak to so many other founders and I'm sure
and I'm sure you do as well, where it's like.
They feel like they're failing because something has happened in their business.
Yeah, it's like, yeah, we've never done it before.
(22:50):
So like I'm I'm still I'm.
Three months ago, I started learning to swim, right?
And there were a few things, you know, just basic front call.
And I was like, how is this person doing?
And for maybe like five, ten minutes, I'm like, oh, man, I can't do this.
(23:13):
I thought to myself, I have never done this.
I'm not meant to know how to do this.
Yeah, so beating up myself and thinking that I'm failing at swimming.
Yeah, doesn't make any sense.
Yeah.
Similarly, when you have a bunch of founders who are like, I feel like a failure
because we haven't raised the round in a month.
Like, OK, you've never raised money.
(23:36):
So therefore, you don't feel like a failure.
You're learning from that.
So that was the reframing.
Yeah, they had to do as a CEO.
OK, and let's talk a little about the team, right?
And so obviously, you had two co-founders.
How did that come about?
I met Ambrose at a leadership event.
It was actually by the Powerless Foundation.
Oh, yeah.
(23:56):
Yeah, Veronica and Ken Olisa.
Yeah, I met them at a leadership event.
We were just sitting next to each other randomly.
And Ken has this, and we tell this story a lot.
Ken basically said, you know, you could be sitting next to your business partner
(24:18):
and look to your left, look to your right.
Yeah, yeah.
And Ambrose tells me this.
It's very literal.
Yeah.
And Ambrose tells me this story a lot.
And I think it's categorically true, which was like, he looked at me
and he was like, no way this guy is going to be a co-founder.
Because I think everyone had come in suits and stuff.
And I'd come in just like a t-shirt and some blue trousers, you know.
(24:41):
Rebel.
And he said, yeah, being a bit of rebel.
And he said, yeah, there's no way.
Then we made friends.
We bonded over books.
We bonded over a whole range of things.
A lot of like personal stuff as well, like both from Ghana, et cetera, et cetera.
Make sure I met because I asked my friend,
(25:02):
I was like, who is the best technical person that you know?
Because basically, I kind of realized, fanbites,
if we wanted it to be like the type of exit that we wanted,
it would have to not be something that we valued based on EBIT.
And so we'd have to layer technology on top of it
so that we can turn like a revenue.
How far into the journey did you come to that realization?
(25:25):
I finished reading a book called Built to Sell in my second year.
In uni?
Or sorry, second year in fanbites.
I'm actually trying to think actually.
No, no, no, no, no, no.
So fun story.
This is a very good story for your audience.
So when fanbites started, we thought it would be like a SaaS business.
(25:46):
Really?
Because we saw, again, the wave of social media influence.
And we're like, oh, well, we're going to build a SaaS tool
for brands to be able to tap into.
Yeah.
Right.
And also SaaS, SaaS, SaaS, right?
You know, get the multiples high.
And then the government, the government reached out to us
to do a minimum wage campaign.
(26:07):
And they said, we'll pay you, I think it was like 100 grand or something.
But we want you to manage the whole thing.
So, like, we can't say no to 100 grand.
We'll do it.
We'll do it.
Like, guys, we are an agency.
I love the flexibility, though.
It's like going with the customer.
It's like, yeah, there's that element of what you want to build,
but then there's an opportunity.
How do you kind of leverage that?
(26:28):
And we're also like, so because we've done like previous campaigns,
like 300 pound campaigns here, et cetera.
But they weren't ever like significant.
They were all like, yeah, use our software.
Then like really wearing the back doing the work.
Yeah.
So that pivot then to kind of being an agency, I was like,
we still need to get the like the revenue story.
(26:51):
So let's use tech to help us to scale.
So that was how I met the two co-founders.
I met Ambrose first and we worked on a bunch of different stuff together.
And then I brought on Mitchell.
That working on a bunch of different stuff together,
was it deliberate? No, because another part is like you meet someone,
you get on and then you're like, do we work well together?
It's a long term.
So it's so interesting.
(27:12):
That's an excellent question.
Because actually it was accidental.
But now for any business I do, I'm like intentional.
We have to work on something else together.
We have to.
We have to.
We have to.
We have to.
And it's interesting, right, because since we saw the business,
there's been a few times where I've like wanted to start something with someone.
(27:32):
Yeah.
And then I've had to check myself and say, you know what, let's work on something small.
And in working on that something small, I realized I don't want to work with you.
Yeah.
Right.
And I think that's very, very important, right,
because I'm sure you've heard of this whole thing about how like
having a business partner is like a marriage, right?
Yeah.
And you don't just propose first date.
(27:53):
Yeah, kind of date.
You date a bit, right?
And I think that's very, very, very important.
So many people, and I could have got that wrong quite a few times,
but accidentally I got it right.
On the conversation of people.
So when you started at Fanbites, it was the three of you,
then obviously you grew the business and hired...
Yeah, so that's about 80 people by the time.
80 people.
(28:14):
Talk to us a little bit about how you viewed hiring.
You know, what are the key things that you looked for
when you're hiring in a team and scaling the business?
It's one of the hardest things from building the company, right?
Especially also, you haven't hired at that scale before, I imagine.
Um, so I think I was a terrible manager at the beginning.
(28:36):
And I think by the time we sold, I was less terrible, but I was still terrible.
I mean, love the authenticity.
And the reason why is when I was getting into business,
you know, I'd read books about Steve Jobs and all those people.
And I basically equates that the way to win is by being...
(29:02):
Because he was.
He was a tyrant.
And I was then like, oh, yeah, like the way you win is by being like,
you should do this now.
And that's the way you lose.
How long did it take you to learn that?
It took me about three years.
And the big one was when like several great employees were leaving.
(29:26):
I think this is my fault.
So to hire, I think the first one is to like, shirk your ego.
Yeah, that was something that I did a lot where I wanted to be right.
And so because I wanted to be right, it was like,
I didn't give the space for other people to just input.
(29:47):
And then the second thing is actually truly realizing the role of a CEO.
I got that wrong until we started to hire some like really credible people.
I think I got that wrong where basically I thought that the questions
and the answers needed to come from me.
All the time.
(30:07):
Every time.
Yeah, it's a common mistake.
Yeah, everyone, right?
But really, I remember I had a friend say this and it's always stuck with me,
which is that a CEO is almost in like the people collecting business.
It is.
And I was like, man, that's such a good way to frame it.
And so those were two mistakes I made, I think, at the beginning.
(30:31):
And to be honest, till the end, where I just thought, man, if only you knew.
But you know, then I'm not going to do that for the next business, right?
Cool.
Now, take us back to fan bites.
So you set out building the company knowing that at some point
you would want to sell it, right?
And there's this saying that businesses are bought and not sold.
(30:54):
Talk to us a little bit about how you went about the whole exit journey.
And from the very beginning, when you started out a company
knowing that you wanted to sell it at some point,
what are some of the decisions you made based on that decision
that was going to come later on down the line?
So, all right, so just go into it.
So, how do I phrase this?
(31:14):
Yeah, so that phrase, businesses are bought and sold is complete garbage
because businesses are sold every single day.
And it's businesses which are of value are sold every single day.
So I'll come back to that.
So what were some of the steps that we did to increase us being able to sell?
Number one, we didn't raise a lot of money.
(31:36):
In all, we raised two million.
We had the opportunity to raise 10 million.
And I said, no.
The reason why is because I knew that if you raise a lot of money,
we'd have to sell at a pretty high valuation.
And I didn't think that.
Yeah.
Yeah.
Number two.
Let me interject that.
Did you have a value in mind that you wanted to sell for?
I wanted a value that personally, I was meaningful to you.
(31:57):
Okay.
I didn't really care too much about what the overall value of the business was.
What I did know was that it wasn't like a hundred million dollar business.
And you were honest with yourself about that.
Why do you think you were?
Because, you know, most of the time,
entrepreneurs are like so enamored by what they're building.
And they're like, oh, this is the next.
You're like, no, it's not the next best place.
Great.
It's like it solves.
(32:18):
How like.
Yeah.
So I think there's probably two things.
One is I'm quite a logical person.
And so I'm just like, well, if you do this and you do this, you do this.
Done.
The other thing is that I just read a lot about how companies are valued.
Right.
I obsessed over basically, you know, MBA books, M&A books.
(32:40):
And so I'd go, OK, well, they did this revenue.
Did is this EBIT.
They had this.
OK, well, that makes sense.
Because I agree with you.
Like sometimes I'm talking to one person who's got some social aggregation app.
And yeah.
And they say, oh, and this is how we're going to get to a billion dollars.
I what crap are you smoking?
Like what drug is it that you're high on?
(33:01):
Do you believe it?
Do you believe it?
And I'm like, some could say it's like ambition.
Some could say like, you're just like, yeah, no, it's very big.
It's delusion.
That's ambition.
That's delusion.
Thin line.
Thin line, exactly.
Yeah.
Well.
Why do you think, like, we'll possess you to think this?
(33:22):
And I think there's sometimes just so many founders and I like,
just get a spreadsheet, get a sheet of paper, just like run the numbers.
Yeah.
Right.
Anyway, so that so yeah, so we didn't raise a ton of money.
We also left a lot of meat on the bone.
So here's what I mean by that.
(33:45):
Some people aim to sell their business when they have completely exhausted all the potential value.
I see.
Whereas in FAMBITES case, I was like, OK, well, we're making tens of millions in revenue.
And we have 40% of our revenue coming from the U.S.
What people would then say is, right, let's go dominate the U.S.
(34:06):
What I said was, we're not going to go to the U.S.
Because when eventually we want to then, so the company, there is a complete great narrative of saying, well, actually, hey.
But then you can continue this.
You can run out, right?
Because you have people in the U.S., you have a big team in the U.S., et cetera, et cetera.
Right.
And that narrative was definitely one that really landed.
(34:28):
And so often when I'm speaking to founders or just friends and they're running the companies and they're like, OK, so this is how we're going to exit, et cetera.
I say, right.
So let's create a chart and let's say like, this is the peak.
This is world domination.
What does this bit look like?
Yeah.
For those who aren't listening, basically, I've pointed up and I've pointed down.
(34:53):
But like, what is it?
Halfway, like 60.
Like, what does that look like?
Yeah.
And let that be your goal.
Because then.
You don't want to sell at the peak.
It makes no sense.
The value is in there.
It's so funny.
Also, I almost feel like sometimes you actually don't know the potential of a business because the market evolves as you go.
(35:14):
You literally can't predict.
I don't think Facebook news is going to be what it is.
Like, you have the instinct and you have some kind of short term or long term, but it's not really what it will become.
So, yeah, that's super interesting.
Here's a really interesting insight.
By the time we sold the business, I think the biggest ever deal we'd done was like half a million.
(35:36):
I caught up with some of the people who still work there now.
Brain Labs, the company that bought Fambytes, through Fambytes, have done six million pound deals.
Like six individual deals, which are worth a million pounds.
Yeah.
We didn't even get anywhere close to that.
But the reason why is exactly as you said, it's like we just didn't understand how to get like a million pound deal.
(36:01):
Right.
And then you have Brain Labs, a 900 person company.
And Brain Labs acquired.
Yeah.
Why do you think they did?
Like, what was the core strategic reason they did?
So in the exits, we had four companies put in.
Well, so we had three companies.
So that means, actually, this would be super interesting for listeners.
(36:22):
So do you want us to go through like the process from exits or like from the start?
Okay.
So, right.
So we started off by, I kept getting emails from people who were interested in integration.
Right.
And at any point that basically means, yo, let's buy you.
(36:44):
Oh, really?
Is that the code word?
It's like we want to integrate.
Partnership.
A partnership.
Let me take a step back because you knew from the beginning that you wanted to sell the business at some point.
And like, I always say, like, some of the greatest entrepreneurs I know of, they almost know who they could potentially sell to very early on.
Did you have an idea of like who you could potentially sell to?
Or the profile of the kind of...
So I knew the type of profile.
(37:05):
Yeah.
And did you set out to build those and forge those relationships?
So I, so, this is a wonderful question.
So accidentally, and the reason why is basically whilst I was running fanbites, we had a lot of like PR and press, industry press, trade press.
And so that actually built up our name over time.
Now, if I could do it again, or in my next business, I'll be super intentional.
(37:29):
I would like have my list of people, make friends with them, you know, build relationships, and then at some point do that.
Yeah.
But in terms of how the exit process started, I basically in six weeks, I got emailed by three different companies who went to sit and partnered up.
What happened? Why did they...
Was there any market trend at the time that kind of spurred that?
(37:51):
There were two market trends.
Number one, low interest rates.
And so everyone's just out here trying to buy, buy, buy, buy, buy.
And number two, and this is actually something so many people are not aware of.
So so many, so much M&A activity is dictated by some random research report by Bain Goldman, JP Morgan.
He says, you know what?
(38:12):
Social media marketing is the next thing.
So then the private equity groups go, it is the next thing.
Let's not go buy more social media marketing companies.
So those two things happened.
And so we were approached and I was like, oh, consolidation time.
(38:33):
I just knew.
What did you know when the first emails came in that that was like...
No, I think it was after the third email, it was a short period of time.
I was like, oh, that's interesting.
These guys are all funded by PE groups and they're all strategics.
That's interesting.
And then I started doing some research and I did read a report.
I think it was by Bain Capital, who had done a research report the year before.
(38:57):
It's like, oh, OK, this makes sense.
And so when I realized that, then I had two decisions to make.
One was, do I then begin a process of trying to like sell the company or do we hire a bank?
OK.
And I got conflicting advice for this.
But basically, the advice was if your company is worth, if you think you can get over 20 million for your company, like 15, 20 million, you should hire a bank.
(39:26):
So then we hired a bank.
And the way that we hired a bank was we looked at people who had sold similar companies to us and then we got them to basically pitch us.
And that was quite a cool feeling.
It was like me going into these offices like, here's how we can make you rich.
Oh my God, say it more.
Then we picked a bank and then they run a process.
(39:48):
And the process was they reach out to.
So we created like a pitch deck. This is actually a very interesting thing.
Selling a company is like selling anything.
It's just got more zeros.
Yeah.
Like, that's just it.
Right.
Selling a company is like selling anything, but it's just got more zeros.
So you do have to create a pitch deck.
(40:08):
So you do have to create reasons for them to buy.
So that's what the bank helped us to do.
And then they began a process.
They reach out to six companies, four companies.
In fact, all six said express interest.
Two of them couldn't afford us.
Four of them could.
Three of them put in letters of intent.
(40:31):
We then went exclusive with one, Brain Labs.
It took about two months to go through and then boom, done.
I would love to talk about the feeling after.
Yeah.
Yeah.
So we can talk about that if you want.
We can go into the details and then we can talk about that.
What do you think?
Let's talk about the details.
What would be useful to your audience?
Let's do the details first and then we'll talk about the feeling.
(40:53):
Let that be the natural.
So what details do you want to go through?
So I think you've kind of summarized everything.
Like all of these conversations happened.
Were there any sticky points in between there where it was like, OK, this might fall through
or OK, maybe there's, you know, maybe we thought of it differently.
I just want to know in that process, was there any point where there was more
deliberation than you expected and timeline?
(41:14):
Or whether there was anything that you would do differently if you were to go through the process again?
So a couple of things I would.
If I was selling my company again, there are three things I do differently.
The first thing is I would have my books done way earlier.
Every year I would have hired an accountant to run our books and make sure everything was good.
(41:38):
Because those things take time.
The second thing was I would have been aware that selling your company and also running your business happens at the same time.
So you have to make sure that your numbers don't go down.
So there were quite a few times, especially in Jan, February, because we sold in May 2022.
(41:58):
In Jan and February, I was like, boys, the numbers.
Yeah.
But I couldn't tell my team why suddenly the CEO was doing sales millions.
Because you needed to make sure.
And it's so funny because it takes time.
The process takes time from the team, from you on building the business.
But then.
And in that time, if the numbers dip, then that's a reflection on the business, right?
(42:22):
So it's an awkward conversation, but it's not like a terrible deal breaker.
And I must say, I think Brain Labs are an exceptional choir.
I think that.
For an experience standpoint, like the entire experience of having to.
Yeah, because, you know, there is this thing in M&A called renegan.
(42:45):
They give you the deal, then they say, actually, oh, we just found this on page 87.
There's new stuff that kind of changes our original value.
Yeah, they stuck to it and they kept it.
That's great.
And I think that's very, very honorable.
How long did it take end to end?
First email to.
First email.
(43:06):
Whoa, that was pretty good.
Wait, let me think.
Six months here.
October.
Actually, geez, I just realized it actually took longer than I thought it did.
Yeah.
November to April.
OK, yeah.
Interesting.
November to April.
(43:26):
And to be honest, it took slightly longer just because of Christmas.
All right.
And the reason why it was a relatively simple thing.
I'll tell you the reason.
I think there are two reasons.
One was we had a bank who had already sold to BrainLass before.
Oh, so they knew what they required.
Yeah.
And I think generally you pay a premium for experience because the bank we used was not the cheapest.
(43:52):
Yeah.
But man, they made me sleep well at night.
Oh, I see.
Like the guys there, Tristan, Rosie, Lauren, they just.
Anytime I'd get a call from them, I wouldn't feel so.
Yeah, you know they're on your side.
Tell me the good news.
Even when we're knee deep in the Indian, it just stretches.
Yeah.
I'm like, tell me the good news.
(44:13):
Yeah.
And I think they were exceptional, exceptional bankers.
So those were the details there.
But the question was like, what could we have done differently?
Yeah, I think you touched a little bit on that.
But the other bit I was asking was just like, was there any sticky point?
But it sounds like it went well.
Like it was five months.
Sounds like, yes, the regular process.
But because sometimes in these transactions.
(44:34):
Oh, you know what?
Yes, there was a sticky point.
There was a sticky point.
And to be honest, I give absolute full credit to my co-founders and again, to BrainLass and
to the bankers for making this smooth.
Because we were idiots, the way that we calculated revenue was dumb.
So we calculated revenue as gross bookings.
(44:58):
Yeah, like cash revenue.
So if somebody booked a campaign now, even if it was going to launch in six months,
you would realize that.
You would realize it.
Okay, so accruals.
Yeah.
And then someone told us about accrual.
Yeah.
What is that?
What is this new word you're giving us?
And then we Google it and then we found out, yo, our revenue could be 50% of what we said.
(45:22):
Did you have a finance manager?
How do you think you could have done that differently?
Having an experienced finance director.
Yeah.
And did you not have someone?
So we had a finance manager, but really they worked on the Ambrose.
Okay.
And Ambrose is like insanely smart, insanely clever, but Ambrose is not a finance director.
Yeah, absolutely.
So suddenly when you're seeing like cash accountants versus accrual accountants.
(45:43):
And I remember getting this call.
I remember getting this call from Ambrose and Mitch.
You're like, yeah, so it looks like revenue was like 30% of what we said.
It's like, what?
Interesting.
That was really funny.
Interesting.
That was really funny actually.
So the advice to me is-
Was that a moment of panic?
(46:03):
Because the bank that we use was not panicking, I didn't panic.
I also think Ambrose and Mitch did an exceptional job of like removing it from me.
Because I think after the fact, they were like, yo, we were panicking.
Yeah.
But I was just like, I was like, guys, you know,
I was like, guys, you take care of the spreadsheet stuff.
(46:24):
I will make sure that the sales of the business are still doing its thing.
Yeah.
And I would be the guy who would kind of paint a picture, really help with all that stuff.
Yeah.
You do the numbers.
Yeah.
And that really, really helped.
So that was probably the like hairiest moment I'd say.
Interesting.
Yeah.
So the big advice to people is like, make sure that give yourself an annual audit.
(46:49):
Like, maybe give yourself an annual audit.
Yeah.
Yeah.
And don't give yourself like some- like give yourself an annual audit from the perspective of an M&A.
An external person.
Yeah, like an external person who's looking in.
Yeah.
No, that makes sense.
So I don't know if we want to touch on any other areas like during that process,
because it was quite quick also.
So I would say like after, you know, 14-year-old Tim said to himself, by 30,
(47:16):
I need to have crazy money.
I need to not have to think about all the stuff.
When the- was the acquisition like a full cash?
Was it cash stock?
It was full cash.
So after, you know, you get that alert or you like look in your bank.
Yeah.
Like what did that do just kind of for you as an experience like?
(47:38):
So I actually think there are two stories to tell here.
The first one is during the process, I documented a lot.
Oh, really?
And I think it was probably the most impactful thing I did.
Like you just wrote or like journaled?
I sent voice memos.
Ah.
Okay.
I sent voice memos to myself and it's so interesting like to relive some of those experiences.
(48:04):
Yeah.
Once I'm like, you're like, this is amazing.
And then you're like, oh, this is taking so long.
And you end up just being able to relive that.
But in terms of when the money dropped, and I think I've told you before, but I'm happy to share it,
which is when we announced the company had been acquired, it was everywhere at the Times, BBC, Forbes, and all these places.
(48:31):
The money still hadn't been sent.
Right.
It was like in the process of being-
Oh, gosh.
So we're getting all these like congratulations.
The money's not in it?
Where is the pay source?
Right.
And what was really funny was all three of us, myself, Amazon, Mitch, we created new bank accounts.
(48:53):
And it comes to think about it, the logic was quite funny.
For me, I was like, okay, at that point I had Monzo and Star.
I was like, right.
Monzo, if they get like millions into their name-
They're just going to flag it like-
They're going to use it for their funding.
Right?
Oh, guys, we have Series B now.
So I'm like, no way is that happening.
(49:17):
So I got like, I got Santander.
Yeah, you're like, yeah.
I know they've been there for time.
So, anyway, so I got that.
Ambrose, I think, got a Santander.
Mitch got a Lloyd's.
And we're just like walking around Old Street because we've announced a deal, but we're walking around Farrow Day.
So we're walking around Farrow Day, and then we're just like refreshing, refreshing.
And we're like, okay, so what's going to happen?
(49:41):
And then Mitchell refreshes his, and he just starts shouting.
He's like-
Is that the moment it became real for you?
Yeah, yeah, yeah.
And then Ambrose refreshed like 30 seconds after.
And then I refresh, and my socials are in zero, zero, zero, zero.
And I'm like, oh my God.
I am checking every number.
(50:05):
I'm like zero, zero, three, three.
I'm like, I'm thinking, please God, don't tell me.
I'm giving my account number so-called to some random-
I'm stressing.
And then I refresh, and then I started shouting.
And here's the crazy thing about like documenting it.
It's actually, Mitchell was taking a video of this, and I actually have it on my phone.
(50:29):
And it's just me like looking at my phone and be like, ah, just shouting.
And I'm like jumping up and down.
You really captured the moment.
Oh my God.
And all I'm just saying is like, wow, wow, wow, wow, wow.
Like that's all I'm saying.
And that moment, I am really happy that I documented it.
Because, you know, and this is not just with like selling a business.
(50:53):
It can be with anything.
It can be with having a baby.
It can be with having a wedding.
Like as time goes on, the memories fade.
And it's so important to document them in the most like primitive way.
Like not just kind of like some stylized way.
Just as it was.
Like us in Farrowandale popping champagne, being like, ah, and they're like spraying champagne and saying wow.
(51:17):
And like all of that stuff.
That was a feeling which I would never forget.
And I think, again, it doesn't have to be you doing a business.
It can be you getting that job that you really wanted.
It can be, you know what?
One of my good friends, she did something amazing, which was she went on a date with someone.
And like literally in that, like after that date, she was like, I think I'm going to marry this person.
(51:44):
Right?
She did a video of herself just being like, oh my god, oh my god, he's so amazing.
Blah, blah, blah.
And then at her wedding.
That was so cute.
They ended up marrying.
That is the purest thing.
And then at her wedding, they played it.
And I cried.
(52:05):
Because I was just like.
What are the odds of that?
You know, you could record many.
But at least give that one.
No, but I agree.
I think it's beautiful.
Yeah.
So for me, that was how it felt.
And yeah, I think the other thing that's very interesting is what I call like the four stages of exits.
(52:26):
So when you sell a company, at least for me, I think I went through basically four emotional stages.
The first stage was like, what?
This is mental.
This is mad.
Like me from like OK.
And then there was a bit of it, which was like, of course, me from OK.
(52:48):
And then the second bit was like when your world has changed, but like the outside world hasn't changed.
I remember like two weeks afterwards, I went to Sainsbury's and I was expected like a choir.
I'm like, yo, the boy is here.
He's arrived.
And everyone is just like, sorry, I just roll out the red carpet.
(53:11):
And they're buying fricking avocados.
What are you doing, mate?
But that's so interesting because it's one of those things I hear this from a lot of sports people as well.
It's like after they want something.
Actors and actresses, especially the Emmy.
Like once you get the gold, like after you're just like, and then you're like, what is the scene?
I've lived all my life for this and the world is saying.
(53:33):
And then the third one is actually where you basically have to like.
This is going to sound weird, but it's basically you have to readjust to your new level of wealth.
And so what I mean by that is like it took me an extremely long time.
This is going to sound like rich people problems, but it's not meant to be.
But it took me an extremely long time to basically adjust my mindset, like having money.
(53:57):
So like I remember we took a flight to Bali afterwards.
And it took me like a month of agonizing to be like, OK, are we flying business or economy?
And I got my spreadsheet out.
If you do this, but I still have this money, so that's OK.
But then I proper agonize over it.
(54:19):
And I think as with anyone, you have to readjust yourself.
It's like in the grand scheme of things. Exactly.
And then the fourth one is actually good. OK, this is who I am now.
Now, how do I act in the world?
How do I behave? Yeah. Right.
Which can mean very simply that your approach money to friendships is also quite different
(54:40):
where you don't see yourself just like so much as a.
Like a transaction, yeah, because I think that was a big thing.
It's like, oh, yeah, like, do you guys want to come to my dinner?
I'll pay for it. Oh, yeah.
You only see this like an ATM. Yeah.
You have to almost be like, well, who am I independent of this?
(55:03):
So those are the four stages. You get wealth manager starting to sell.
Oh, maybe sharks. Sharks.
You didn't know me before. But what I would say, though, again.
Yes, I did. And I didn't really go with any of them, but it does feel nice.
Yeah, I bet. You know, Timmy, you are one of our value people.
(55:27):
Oh, now value? Now value? Yeah.
Interesting. Interesting. So how much did he sell for?
How much? Oh, that is not a number publicly.
But what we say is it was tens of millions. OK.
It was less. It was less than a hundred and more than 10.
OK. That's like a wide range.
(55:49):
But I'll tell you actually the reason why very quickly, because I know you just said, but I'll tell you the reason why.
Often people don't disclose numbers publicly. OK, tell us.
And often people are like, well, why not? The reason why is this.
Often, if a company is buying you, they're not just buying you.
(56:11):
They're buying a bunch of other companies. Yeah.
And so what can happen is if you say, say your value out or you say your multiples out or something like that, what can happen is any future.
Exactly. Any future companies they want to buy.
Yeah, they just use that as an anchor. Yeah.
You bought this for this and like we're bigger than them or we have a bigger team than them.
So often that's the reason why you're not asked to make public because like you actually impede the future growth of your buyer.
(56:41):
And unless you hate your buyer, there's no reason to do that.
Yeah. Cool. Thank you so much, Tim.
Honestly, really appreciate you coming here, sharing your authentic story with us today. Thank you.
Yeah, good. So I think what would be lovely, I'll end with all our guests with this.
It's two questions. Yeah. So the first, there's a time machine involved.
(57:04):
So now Tim is going back to the beginning of fan bites. You've got one minute.
The machine opens. You see Tim. Probably at that point, just when he's making that decision.
What do you tell him? One minute.
Don't let your ego get in the way. Make sure that you hire more experienced people as soon as you can and also take bigger risks.
(57:28):
I love that. I love that. I love that. Fantastic.
And then the second, for any operator, someone who's ruminating on an idea, who's kind of thinking about stuff, especially for someone who's younger
and someone who doesn't probably have the background right now, then you kind of think of fans like have you done it before?
But you have to do it first time. How, what will you tell them?
(57:51):
Start very small and have relatively small goals.
I love that. Why do you say that? Small goals are more achievable.
And I would much rather hit certain goals, build enough evidence that I'm the sort of person that can hit those goals and then over time make those goals bigger.
(58:13):
Fantastic. Thank you very much, Tim. It was so lovely to have you and thank you everyone for joining us as well.
So I guess till next time. Thank you.
Thank you for tuning in to another episode of the Startup Leap. TSL for short.
Leave a review. Tell us what you think of this episode on all of our platforms at the Startup Leap pod.
Do you have a question? Ask us and we'll ask our guests. Go to the startupleap.io. See you next time.
There's this saying that businesses are bought and not sold.
(00:02):
So that phrase, businesses are bought and not sold, is complete garbage.
Businesses which are of value are sold every single day.
So the idea of being passionate is massively overrated at the beginning.
The hardest part of being a CEO is that you don't know what you don't know.
There's a thing that I always say is like, you create yourself, you don't find yourself.
And I think so many people, especially in business, are like trying to find.
(00:27):
And then at this point I'll be ready.
And it's interesting, right, because having a business partner is like a marriage, right?
And you don't just propose for a date.
When you started Fanbites, did you lead with your heart or did you lead with your head?
I led with my pocket because the company got bigger
and I got less passionate about the things I was doing.
This is the Startup Leap, where we explore the stories of incredible entrepreneurs
(00:48):
who have taken the leap to build their own startups.
Get ready for real, raw and relatable discussions,
nuanced conversations that unearth insights into the realities and possibilities
as you explore taking the leap to starting your own company.
We're your host.
I'm Maria, operator and investor and partner at OpenSeed VC.
(01:10):
I'm Yvonne, an early stage tech investor and partner at Local Globe.
And welcome to the Startup Leap.
Yvonne and Maria are partners at Local Globe and OpenSeed VC, respectively.
Local Globe and OpenSeed are independent of the Startup Leap podcast.
Any statements made by Maria, Yvonne or the Startup Leap guests
are solely their view and are not advice.
(01:32):
Endorsements by the Startup Leap, its guests, Maria and Yvonne.
So, Tim, in the midst of being a student at university,
you decided to start your business.
While other students were studying.
Yes.
And one of the things that you've said is you don't believe that you actually have to have a passion
(01:53):
before you start a business, right?
Oh, we're going there.
Yeah, we're going in.
We're going there.
And so when you started Fan Vites, did you lead with your heart or did you lead with your head?
Tell us how important was the passion behind?
I led with none of them.
I led with my pocket.
Okay, tell us more.
I basically saw a market opportunity in the Influence Award and I thought,
(02:15):
all right, cool, we're going to capitalize on it.
So I think that the idea of being passionate is massively overrated at the beginning.
I became quite passionate about it, I'll say in year three.
If I was to think about the waves of passion I had for Fan Vites,
it probably went no real passion, market opportunity, and then a bit of passion.
(02:37):
And then basically like year five, I was like less passion
because the company got bigger and I got less passionate about the things I was doing.
And so you wasn't driven by passion, so it was the opportunity rather that drove you?
Yeah, I think the opportunity, the money that was possible,
and then I think halfway through it was more like the competition.
(02:57):
Right.
So I started off by thinking, oh, this is a good way we could build a business that we could sell.
And then halfway through I thought, oh, actually we could win this market.
And I got driven by competing against other people.
And the agency space.
So you started with the idea to sell in mind.
So yeah, from the beginning, was that something you did with that startup?
(03:20):
Or have you done that before?
Because I know you sold a startup before.
Yeah, so I think so the business I sold before Entrepreneur Express,
bear in mind, we're using the word like sold.
It was only for like 110 grand.
Yeah, but it was sold.
I mean, it was sold.
It was sold.
And how old were you at that point in time?
I was 17 then.
That's a lot of money for a 17 year old.
(03:41):
So like at that point, it was almost like, wow, that's incredible.
Now, did that inform the way that I thought about business in the subsequent business?
I say yes, because it made my eyes open to the fact that you could just think about something.
And then at some point, someone will pay you more money than you thought was possible.
(04:02):
And I just thought, wow, this is an unbelievable game.
Right.
And I think if I hadn't had that prior experience,
I still would have started a business to sell, but I don't think I'd have believed in it as much.
OK, so we're going to get back into the whole exit because I think that's like super interesting.
But like, take us back earlier into your childhood, your early beginnings.
(04:23):
What were the things that really shaped who you are as an entrepreneur?
I mean, obviously, fan bites was your third business.
Yeah.
Take us back to the first.
You started early, started really early.
Yeah, so I started my first ever company at 14.
I think that big desire was because I just wanted to do something slightly different.
So the story actually goes that I did a bet with a friend of mine where we bet each other, like,
(04:47):
well, we see who would see 500 pounds before we turn 18.
And basically, the bet was, all right, cool, we'll see who can do it.
And I just decided that the way to do it would be to start a tutoring business.
And of the back of that tutoring business of getting 65 tutors, connecting them as the middleman,
I was like, wow, this is amazing.
(05:08):
Of the back of that, that spark in my head of, wow, this is something that I could just do,
was what was ignited.
What's really funny, actually, is I started this year, I started taking therapy.
Oh, really?
And my therapist, actually, when I wrote down my bio, my
therapist was like, you know, you talk a lot about your exits being quite a defining moment for you.
(05:31):
But I think a bigger defining moment for you was starting a company at 14.
And she was right.
She's always right.
She was right, because what she was saying was like, that gave me that little bit of confidence to
know that I could do something.
And then I started doing it.
That gave me that little bit of confidence to know that I could do something.
(05:54):
And then at 17, then it starts in Entrepreneur Express and selling it for what really is like a very
small sum, but a big sum for a 17 year old.
It just like increased the flame a little bit more.
And which therefore, I think when I was 21, when I started Fanbites, I just had this sense of, well,
well, duh, this is obviously going to happen.
Yeah.
(06:14):
So the 14 year old business was to some degree a lot more significant than the 27 year old exits.
Because it started, it was what kickstarted, I guess, that domain.
And would you say you did anything different as you kind of went through each business?
Think about it, like for the first, what did you do in the second that you definitely did?
The first and the third second.
So the tutor business failed because basically I was the middleman connecting two people, right?
(06:39):
People who needed tutors to people who, to the tutees, right?
Tutors, tutees.
And the reason why I failed was because basically, as with any physical middleman business,
when I connect someone, they just go behind my back.
Disintermediation.
Exactly.
Like there's no reason for you to come back.
Yeah.
Especially if it's tutoring and you really like your tutor.
(07:01):
So the big change that I did to the second business was that I was that I became the
person who owned the audience.
So Entrepreneur Express was basically an online business publication.
But the way that I drove traffic through was through like Facebook pages and all that stuff.
But the big thing was like I owned the media rather than being the middleman.
(07:21):
Now, I did become the middleman when I went to advertisers and I got them to basically
advertise in my blog and stuff.
But I got a bit more of the value.
And then in the third business, Fambite, you would think it's a classic middleman business, right?
Because you're connecting brands to influencers.
But having learned from the first and the second one was how do we add more value at like as a
(07:46):
company?
So that's when we added like insights and technology and data and all that stuff,
which made it seem more than just, hey, we have a bunch of emails of influencers.
But actually, we are a one stop shop for the full service of you being able to run influencers.
So that's basically what I learned from each stage.
Cool.
I mean, 14 is very young to start a business.
I know you said that it was a bit of your friend.
(08:08):
Yeah.
Just looking back on your childhood, were there any moments that you felt spark that
entrepreneurship spark within you?
Yeah.
So I think there's two big moments.
The first one was being sent to Ghana before I was six months old.
So I was born here in Hackney, but then I got sent to Ghana to live with my grandma and I stayed
(08:29):
there for 10 years.
And I think coming back here, I had this feeling of like, who am I?
And I need to give some and I need some kind of significance in my life.
And so for me, doing business was a way of driving that significance.
And then actually, the second thing was so entrepreneur express was started when I was 17.
(08:50):
But at 17, I had one, I guess, at 16, I had just joined a sixth form, like a boarding school,
private sixth form.
And everyone there was insanely clever.
So I'd gone from basically like a state school where I was the big dog and I was like the
smartest person to then being surrounded by geniuses.
And I think at that point also, I had this feeling of right, I need to prove myself in some way.
(09:14):
Yeah, differentiate yourself.
Yeah, exactly.
Right.
Because I can't compete with, you know, like, Luke and Francis and Sam, who are basically like,
they have got 100% in further maths at 15.
It's like, what do I do here?
And so when you realize that, like you either say, I'm either going to compete or I'm going
to like change the game completely.
(09:35):
And so this was the reason why I think in Christ Hospital, I was like, OK,
Christ Hospital was the name of the school.
I'm in Christ Hospital.
I was like, OK, I'm going to win this business game because all you nerds don't want to win
that game.
Entrepreneurship was your edge.
And he didn't like it.
I remember the day after entrepreneur.
(09:55):
No, I remember whilst I was running Entrepreneur Express, I ended up basically being able to do
an interview in a single day with like Richard Branson, James Kahn and Alan Sugar.
And I came back to school.
I said, oh my God, this amazing.
I was like showing pictures and we were like, OK, like jealousy was creeping in.
(10:16):
Primarily because it was almost like.
I was doing something that they hadn't even thought was possible to them.
It was like, go to school, go to Oxford.
A ton of them went to Oxford, right?
But but actually, like deep inside, they were like, I don't want to just do the conventional
path.
And here was this guy who had basically come into the school a year before and had done
(10:38):
all of that.
Yeah.
So fan bites.
One minute.
What was the USP at the time?
What did you see in the solution that you kind of proposed at the time?
The solution.
OK, so the USP change over time.
But we saw the wave of social media influencers.
They use the market trend.
Yeah, exactly.
(10:59):
So we saw the wave of social media influencers rising and rising and rising.
I had studied and read enough about marketing where I realized that in any new industry,
there's always like an independent wave.
So there were a bunch of when TV became very popular.
All right.
We now need to just have TV marketing companies.
(11:20):
And then over time, it ends up being like a consolidation.
So like a big company that owns TV and radio and PR and podcasts.
So my hope thing was, wow, there is a big trend going on in the world of social media
influencers.
I'm part of the audience who are being influenced by these social media influencers.
And if I'm part of this audience, and that means brands will want to spend a ton of money
(11:41):
to tap into that.
We don't even need to be number one.
We just like need to be in the market.
So there were so many times during fan bites, I would say to my co-founders and my team and
our investors, I'd be like, you know, we don't have to win.
We just have to not die.
(12:02):
Because like this market is going to grow.
Tailwind is so strong.
And if we are like in the top 10 companies in the UK, we will win.
So that was the way that I thought about the business opportunity.
Interesting.
Did you, what was the distance between when you graduated from?
I started in my second year of university.
Interesting.
Talk to us about that.
(12:22):
I mean, wow.
How do you manage a business as a student?
Oh, it's easy.
Just do it.
Really?
Yeah, like, it's not hard.
Okay.
It's just not hard.
People would argue that it is because then you have to something has got to give.
What do you think gave?
Like if you have to go to class.
Now we're talking.
So you have to kind of.
(12:43):
But you graduated.
Funny thing, because I guess like a lot of people talk about like college dropouts,
like Mark Zuckerberg dropped out of university.
Yeah, you didn't drop out.
You didn't drop out.
You decided to continue.
The reason that I didn't drop out was because I felt so.
I felt like I had to finish it for my parents, especially my dad.
(13:05):
So my dad, unfortunately, had been ill.
He had a stroke whilst I was in university.
Actually, no, in sixth form.
Then he had a, unfortunately, he had a fatal stroke when I was in university.
And I always had this kind of feeling of I should complete this for him.
And when it really came down to it, though, like I knew in my heart that I wasn't ever
(13:30):
going to really use the degree.
Yeah, but I did it anyway.
It was like a principles or like.
Yeah, just as a principle.
But it's quite funny, like in the third year of uni,
I think I was actually in university like.
I actually saw this email from my.
Was it called your head of department?
Be like, do you know that you've only been in class for like 17 days or something?
(13:54):
Because I was always in London.
Yeah, of course, like something has to give about that.
It's incredible that you still were able to do both.
Yeah, but it's almost I don't know, man, like.
There was no other option, right?
Like people. Yeah, I think you think of things differently when you when you know you don't
have a choice. You stretch what it's asking of you and you make it happen.
(14:15):
Yeah, people talk a lot about.
Oh, OK, I don't know.
Maybe I'm going to.
But like people talk a lot about like, oh, I've got a job, but I want to start a business
and I'm finding it like difficult.
And I'm like, well, yeah, it's meant to be difficult.
It's a feature of the book.
I say this. Yeah, it's like, that's the design.
Yeah. So what are you going to do?
Yeah, just yeah, like what do we do here?
(14:36):
Right. And so for me, I think that's a very important thing that I just saw it as hard
and then I just did it.
Right. One question I have is just around like finances.
So a lot of immigrants and especially people from a combo backgrounds, like when they're
thinking about making the leap, they have to consider like, how do I live?
One of the benefits I think you have is the fact that you started very early.
So I almost feel like you kind of had that muscle of high risk, like not having to think
(15:00):
about too many dependencies on you.
And maybe I'm wrong, but tell me about that.
Like the traditional route for most people is, oh, I'm in school.
I just need to finish, you know, get a degree, get a stable job that gives me an income,
you know, get a good credit score, like get a good like that.
Obviously, like the risk to you wasn't so tell me a bit about that.
(15:20):
Do you think it's your upbringing?
Do you think it's just personality?
Like, why are you able to make those leaps?
Like, I'm not really think I maybe you thought about it.
We talked a bit about that.
So I think the two biggest things that shaped my attitude to money was running my business
was number one, doing it young.
(15:42):
Yes, I had zero commitment.
I could work from anywhere.
I could do whatever.
But number two, which to me is even more important, was the type of business that we chose.
I intentionally didn't go for some like we need to raise millions of funding business
in order to succeed.
I chose a business which at the beginning was just like a services business.
(16:03):
And we were profitable.
And then what I then ended up doing was raising money was doing it for a very specific purpose.
And I think the reason why so many people put themselves in a lot of like financial
angst is because they choose a business which needs them to raise a lot of money.
And then they go, oh, no, I need to fundraise for this.
When really, especially if it's your first or second business doing something with
(16:27):
with pretty low cost where you can get started quickly.
Yeah.
Yeah.
Interesting.
It sounds like you were really intentional around the type of business you started.
Yeah, I had one goal in life in my 20s or in my early 20s, I'm still 20.
My one main goal was like, all right, before 30, I basically want to have more money than
(16:48):
I ever know to do.
Where did that come from?
It came from being a poor kid.
Like that was it.
Like, like growing up on Oaken Road, I was like, you know what's so interesting, right?
So I was talking to my friend about this, which was so I grew up like fourth floor
council stay on Oaken Road and we didn't have a lift.
(17:10):
And I always remember certain times coming home when it was like dark outside and like
running up the stairs and just saying to myself, like, I don't belong here.
I don't belong here.
Like, like just like shouting to myself, I don't belong here.
I don't belong here.
And so I like internalize that to myself.
And I think I just I just gave myself a self image of someone who this was just a pit stop.
(17:34):
And I believed in that so much, like so much that almost like, you know, when we saw the
business and people asked me like, do you think it would happen?
I was like, well, yeah, exactly how I planned it.
I said, I'll do this and I'll do this and I'll do this and I did it.
Right. Yeah.
And but I think that came because like as a kid, I just had this like very big sense
(17:58):
of self belief, which came from not having much and thinking I was like,
I was designed to do something different.
So that probably is where it came from.
And to be honest, I think a lot of people have that.
Yeah.
But they feel like they they feel like they need to be special in order to have that.
(18:22):
So I get this a lot from people who say, follow me on social.
They might say something like, oh, that's good for you because you had this.
They go, I had one.
Exactly.
And they go like, oh, because, you know, you discovered social media early.
OK.
But like you could have also.
Yeah.
(18:43):
Really early.
Like people believe they need to have something special, but it's like self you create.
Yeah.
Yeah.
OK.
You create yourself.
Right.
There's a thing that I always say is like you create yourself.
You don't find yourself.
And I think so many people, especially in business, are like trying to find.
Yeah.
Yeah.
And then at this point, I'll be ready.
Yeah.
I get never.
And it never comes right.
(19:03):
You have to almost like.
They postpone themselves.
Yeah.
They postpone themselves.
Like, don't postpone yourself because if you postpone yourself, you keep postponing.
Then you'd be like, I know, 70 and be like, OK, and then I'm going to.
Yeah.
And it's like, no, it's sweet.
Did you ever feel peer pressure?
Like, because I'm just thinking, really?
No.
Like you you're it's almost like you're living a life that's not the traditional like 18 years.
(19:26):
So you probably had friends, probably they look like they were doing well.
Like, did you ever at some point, especially when it wasn't yet glamorous, like fan by 21
being a CEO, 21, like having to think about payroll at 21.
So I felt peer pressure for one week.
Really?
What week was that?
It was actually spring week.
So like for people who don't know, so spring week is when in universities, like the banks
(19:52):
and all those guys come in and like, you know, you can work for us.
Yeah.
I felt peer pressure because actually quite a few of my friends, they were like, oh, yeah,
I've got this one.
Goldman.
Exactly.
But then I was like, I don't want that.
But I did feel a peer pressure, which was a sense of, well, they're doing it.
They seem happy doing it.
Yeah.
And I'm like, and I want that happiness that come from that.
(20:15):
And then I was like, yeah, I just don't want that.
And that exercise of like, what do I want is a useful mental exercise.
I love that.
To make these decisions.
The truth I actually believe is that you know what you want.
It's not what you don't want, actually.
Sometimes you do it by elimination.
(20:36):
You're like, that doesn't sound good.
I have a similar experience where like I was in consulting and I look at the partners and
I'll be like, I don't want that for them.
But I'm just like, and everyone's like, oh, you're doing so I'm just like, no.
So I feel like there's something in you that actually knows what you want, sometimes more
than you realize.
Yeah.
That's a very good way of thinking about it, which is almost negative goes for everyone.
(21:00):
Exactly.
It's like, I don't know if you don't want to do that.
Don't I want to?
Eliminate.
Because that's what you said with Goldman Sachs.
You're like, oh, for a little bit there, you're like, I wanted that.
Yeah.
Actually, no, I don't.
Yeah.
One of the things that influenced me was I got fired from my first ever job because I
outsourced it.
That is so on brand.
(21:21):
Like that is so typical of an entrepreneur.
That's quite funny.
Very smart, man.
Yeah.
I think going through that week that I felt peer pressure, I was just like, you couldn't
even stay in a job for three days selling crisps.
That was the job.
It was like selling crisps.
And the outsourcing, I gave it to my friend to do it and then he found out.
(21:44):
And it was like, you couldn't even do that for three days selling crisps.
And you think you lost a week in Goldman.
Yeah.
Yeah, like, come on, man.
So yeah.
Talk to us a little bit about being a CEO.
So obviously, you're a relatively young CEO, right?
And the company grows, evolves and scales.
How did you evolve as a CEO and grow with the company?
(22:07):
So I think the hardest part of being a CEO is that you don't know what you don't know.
And for the five, six years that we ran FemBytes, it was just a perpetual hamster wheel of every
day realizing, oh, I didn't know this.
Oh, I didn't know this.
And that can either break you or that can make you.
And I changed my identity to be someone who was constantly learning rather than thinking
(22:29):
I was constantly failing.
I think that's distinctive.
That distinction there really helped me because I speak to so many other founders and I'm sure
and I'm sure you do as well, where it's like.
They feel like they're failing because something has happened in their business.
Yeah, it's like, yeah, we've never done it before.
(22:50):
So like I'm I'm still I'm.
Three months ago, I started learning to swim, right?
And there were a few things, you know, just basic front call.
And I was like, how is this person doing?
And for maybe like five, ten minutes, I'm like, oh, man, I can't do this.
(23:13):
I thought to myself, I have never done this.
I'm not meant to know how to do this.
Yeah, so beating up myself and thinking that I'm failing at swimming.
Yeah, doesn't make any sense.
Yeah.
Similarly, when you have a bunch of founders who are like, I feel like a failure
because we haven't raised the round in a month.
Like, OK, you've never raised money.
(23:36):
So therefore, you don't feel like a failure.
You're learning from that.
So that was the reframing.
Yeah, they had to do as a CEO.
OK, and let's talk a little about the team, right?
And so obviously, you had two co-founders.
How did that come about?
I met Ambrose at a leadership event.
It was actually by the Powerless Foundation.
Oh, yeah.
(23:56):
Yeah, Veronica and Ken Olisa.
Yeah, I met them at a leadership event.
We were just sitting next to each other randomly.
And Ken has this, and we tell this story a lot.
Ken basically said, you know, you could be sitting next to your business partner
(24:18):
and look to your left, look to your right.
Yeah, yeah.
And Ambrose tells me this.
It's very literal.
Yeah.
And Ambrose tells me this story a lot.
And I think it's categorically true, which was like, he looked at me
and he was like, no way this guy is going to be a co-founder.
Because I think everyone had come in suits and stuff.
And I'd come in just like a t-shirt and some blue trousers, you know.
(24:41):
Rebel.
And he said, yeah, being a bit of rebel.
And he said, yeah, there's no way.
Then we made friends.
We bonded over books.
We bonded over a whole range of things.
A lot of like personal stuff as well, like both from Ghana, et cetera, et cetera.
Make sure I met because I asked my friend,
(25:02):
I was like, who is the best technical person that you know?
Because basically, I kind of realized, fanbites,
if we wanted it to be like the type of exit that we wanted,
it would have to not be something that we valued based on EBIT.
And so we'd have to layer technology on top of it
so that we can turn like a revenue.
How far into the journey did you come to that realization?
(25:25):
I finished reading a book called Built to Sell in my second year.
In uni?
Or sorry, second year in fanbites.
I'm actually trying to think actually.
No, no, no, no, no, no.
So fun story.
This is a very good story for your audience.
So when fanbites started, we thought it would be like a SaaS business.
(25:46):
Really?
Because we saw, again, the wave of social media influence.
And we're like, oh, well, we're going to build a SaaS tool
for brands to be able to tap into.
Yeah.
Right.
And also SaaS, SaaS, SaaS, right?
You know, get the multiples high.
And then the government, the government reached out to us
to do a minimum wage campaign.
(26:07):
And they said, we'll pay you, I think it was like 100 grand or something.
But we want you to manage the whole thing.
So, like, we can't say no to 100 grand.
We'll do it.
We'll do it.
Like, guys, we are an agency.
I love the flexibility, though.
It's like going with the customer.
It's like, yeah, there's that element of what you want to build,
but then there's an opportunity.
How do you kind of leverage that?
(26:28):
And we're also like, so because we've done like previous campaigns,
like 300 pound campaigns here, et cetera.
But they weren't ever like significant.
They were all like, yeah, use our software.
Then like really wearing the back doing the work.
Yeah.
So that pivot then to kind of being an agency, I was like,
we still need to get the like the revenue story.
(26:51):
So let's use tech to help us to scale.
So that was how I met the two co-founders.
I met Ambrose first and we worked on a bunch of different stuff together.
And then I brought on Mitchell.
That working on a bunch of different stuff together,
was it deliberate? No, because another part is like you meet someone,
you get on and then you're like, do we work well together?
It's a long term.
So it's so interesting.
(27:12):
That's an excellent question.
Because actually it was accidental.
But now for any business I do, I'm like intentional.
We have to work on something else together.
We have to.
We have to.
We have to.
We have to.
And it's interesting, right, because since we saw the business,
there's been a few times where I've like wanted to start something with someone.
(27:32):
Yeah.
And then I've had to check myself and say, you know what, let's work on something small.
And in working on that something small, I realized I don't want to work with you.
Yeah.
Right.
And I think that's very, very important, right,
because I'm sure you've heard of this whole thing about how like
having a business partner is like a marriage, right?
Yeah.
And you don't just propose first date.
(27:53):
Yeah, kind of date.
You date a bit, right?
And I think that's very, very, very important.
So many people, and I could have got that wrong quite a few times,
but accidentally I got it right.
On the conversation of people.
So when you started at Fanbites, it was the three of you,
then obviously you grew the business and hired...
Yeah, so that's about 80 people by the time.
80 people.
(28:14):
Talk to us a little bit about how you viewed hiring.
You know, what are the key things that you looked for
when you're hiring in a team and scaling the business?
It's one of the hardest things from building the company, right?
Especially also, you haven't hired at that scale before, I imagine.
Um, so I think I was a terrible manager at the beginning.
(28:36):
And I think by the time we sold, I was less terrible, but I was still terrible.
I mean, love the authenticity.
And the reason why is when I was getting into business,
you know, I'd read books about Steve Jobs and all those people.
And I basically equates that the way to win is by being...
(29:02):
Because he was.
He was a tyrant.
And I was then like, oh, yeah, like the way you win is by being like,
you should do this now.
And that's the way you lose.
How long did it take you to learn that?
It took me about three years.
And the big one was when like several great employees were leaving.
(29:26):
I think this is my fault.
So to hire, I think the first one is to like, shirk your ego.
Yeah, that was something that I did a lot where I wanted to be right.
And so because I wanted to be right, it was like,
I didn't give the space for other people to just input.
(29:47):
And then the second thing is actually truly realizing the role of a CEO.
I got that wrong until we started to hire some like really credible people.
I think I got that wrong where basically I thought that the questions
and the answers needed to come from me.
All the time.
(30:07):
Every time.
Yeah, it's a common mistake.
Yeah, everyone, right?
But really, I remember I had a friend say this and it's always stuck with me,
which is that a CEO is almost in like the people collecting business.
It is.
And I was like, man, that's such a good way to frame it.
And so those were two mistakes I made, I think, at the beginning.
(30:31):
And to be honest, till the end, where I just thought, man, if only you knew.
But you know, then I'm not going to do that for the next business, right?
Cool.
Now, take us back to fan bites.
So you set out building the company knowing that at some point
you would want to sell it, right?
And there's this saying that businesses are bought and not sold.
(30:54):
Talk to us a little bit about how you went about the whole exit journey.
And from the very beginning, when you started out a company
knowing that you wanted to sell it at some point,
what are some of the decisions you made based on that decision
that was going to come later on down the line?
So, all right, so just go into it.
So, how do I phrase this?
(31:14):
Yeah, so that phrase, businesses are bought and sold is complete garbage
because businesses are sold every single day.
And it's businesses which are of value are sold every single day.
So I'll come back to that.
So what were some of the steps that we did to increase us being able to sell?
Number one, we didn't raise a lot of money.
(31:36):
In all, we raised two million.
We had the opportunity to raise 10 million.
And I said, no.
The reason why is because I knew that if you raise a lot of money,
we'd have to sell at a pretty high valuation.
And I didn't think that.
Yeah.
Yeah.
Number two.
Let me interject that.
Did you have a value in mind that you wanted to sell for?
I wanted a value that personally, I was meaningful to you.
(31:57):
Okay.
I didn't really care too much about what the overall value of the business was.
What I did know was that it wasn't like a hundred million dollar business.
And you were honest with yourself about that.
Why do you think you were?
Because, you know, most of the time,
entrepreneurs are like so enamored by what they're building.
And they're like, oh, this is the next.
You're like, no, it's not the next best place.
Great.
It's like it solves.
(32:18):
How like.
Yeah.
So I think there's probably two things.
One is I'm quite a logical person.
And so I'm just like, well, if you do this and you do this, you do this.
Done.
The other thing is that I just read a lot about how companies are valued.
Right.
I obsessed over basically, you know, MBA books, M&A books.
(32:40):
And so I'd go, OK, well, they did this revenue.
Did is this EBIT.
They had this.
OK, well, that makes sense.
Because I agree with you.
Like sometimes I'm talking to one person who's got some social aggregation app.
And yeah.
And they say, oh, and this is how we're going to get to a billion dollars.
I what crap are you smoking?
Like what drug is it that you're high on?
(33:01):
Do you believe it?
Do you believe it?
And I'm like, some could say it's like ambition.
Some could say like, you're just like, yeah, no, it's very big.
It's delusion.
That's ambition.
That's delusion.
Thin line.
Thin line, exactly.
Yeah.
Well.
Why do you think, like, we'll possess you to think this?
(33:22):
And I think there's sometimes just so many founders and I like,
just get a spreadsheet, get a sheet of paper, just like run the numbers.
Yeah.
Right.
Anyway, so that so yeah, so we didn't raise a ton of money.
We also left a lot of meat on the bone.
So here's what I mean by that.
(33:45):
Some people aim to sell their business when they have completely exhausted all the potential value.
I see.
Whereas in FAMBITES case, I was like, OK, well, we're making tens of millions in revenue.
And we have 40% of our revenue coming from the U.S.
What people would then say is, right, let's go dominate the U.S.
(34:06):
What I said was, we're not going to go to the U.S.
Because when eventually we want to then, so the company, there is a complete great narrative of saying, well, actually, hey.
But then you can continue this.
You can run out, right?
Because you have people in the U.S., you have a big team in the U.S., et cetera, et cetera.
Right.
And that narrative was definitely one that really landed.
(34:28):
And so often when I'm speaking to founders or just friends and they're running the companies and they're like, OK, so this is how we're going to exit, et cetera.
I say, right.
So let's create a chart and let's say like, this is the peak.
This is world domination.
What does this bit look like?
Yeah.
For those who aren't listening, basically, I've pointed up and I've pointed down.
(34:53):
But like, what is it?
Halfway, like 60.
Like, what does that look like?
Yeah.
And let that be your goal.
Because then.
You don't want to sell at the peak.
It makes no sense.
The value is in there.
It's so funny.
Also, I almost feel like sometimes you actually don't know the potential of a business because the market evolves as you go.
(35:14):
You literally can't predict.
I don't think Facebook news is going to be what it is.
Like, you have the instinct and you have some kind of short term or long term, but it's not really what it will become.
So, yeah, that's super interesting.
Here's a really interesting insight.
By the time we sold the business, I think the biggest ever deal we'd done was like half a million.
(35:36):
I caught up with some of the people who still work there now.
Brain Labs, the company that bought Fambytes, through Fambytes, have done six million pound deals.
Like six individual deals, which are worth a million pounds.
Yeah.
We didn't even get anywhere close to that.
But the reason why is exactly as you said, it's like we just didn't understand how to get like a million pound deal.
(36:01):
Right.
And then you have Brain Labs, a 900 person company.
And Brain Labs acquired.
Yeah.
Why do you think they did?
Like, what was the core strategic reason they did?
So in the exits, we had four companies put in.
Well, so we had three companies.
So that means, actually, this would be super interesting for listeners.
(36:22):
So do you want us to go through like the process from exits or like from the start?
Okay.
So, right.
So we started off by, I kept getting emails from people who were interested in integration.
Right.
And at any point that basically means, yo, let's buy you.
(36:44):
Oh, really?
Is that the code word?
It's like we want to integrate.
Partnership.
A partnership.
Let me take a step back because you knew from the beginning that you wanted to sell the business at some point.
And like, I always say, like, some of the greatest entrepreneurs I know of, they almost know who they could potentially sell to very early on.
Did you have an idea of like who you could potentially sell to?
Or the profile of the kind of...
So I knew the type of profile.
(37:05):
Yeah.
And did you set out to build those and forge those relationships?
So I, so, this is a wonderful question.
So accidentally, and the reason why is basically whilst I was running fanbites, we had a lot of like PR and press, industry press, trade press.
And so that actually built up our name over time.
Now, if I could do it again, or in my next business, I'll be super intentional.
(37:29):
I would like have my list of people, make friends with them, you know, build relationships, and then at some point do that.
Yeah.
But in terms of how the exit process started, I basically in six weeks, I got emailed by three different companies who went to sit and partnered up.
What happened? Why did they...
Was there any market trend at the time that kind of spurred that?
(37:51):
There were two market trends.
Number one, low interest rates.
And so everyone's just out here trying to buy, buy, buy, buy, buy.
And number two, and this is actually something so many people are not aware of.
So so many, so much M&A activity is dictated by some random research report by Bain Goldman, JP Morgan.
He says, you know what?
(38:12):
Social media marketing is the next thing.
So then the private equity groups go, it is the next thing.
Let's not go buy more social media marketing companies.
So those two things happened.
And so we were approached and I was like, oh, consolidation time.
(38:33):
I just knew.
What did you know when the first emails came in that that was like...
No, I think it was after the third email, it was a short period of time.
I was like, oh, that's interesting.
These guys are all funded by PE groups and they're all strategics.
That's interesting.
And then I started doing some research and I did read a report.
I think it was by Bain Capital, who had done a research report the year before.
(38:57):
It's like, oh, OK, this makes sense.
And so when I realized that, then I had two decisions to make.
One was, do I then begin a process of trying to like sell the company or do we hire a bank?
OK.
And I got conflicting advice for this.
But basically, the advice was if your company is worth, if you think you can get over 20 million for your company, like 15, 20 million, you should hire a bank.
(39:26):
So then we hired a bank.
And the way that we hired a bank was we looked at people who had sold similar companies to us and then we got them to basically pitch us.
And that was quite a cool feeling.
It was like me going into these offices like, here's how we can make you rich.
Oh my God, say it more.
Then we picked a bank and then they run a process.
(39:48):
And the process was they reach out to.
So we created like a pitch deck. This is actually a very interesting thing.
Selling a company is like selling anything.
It's just got more zeros.
Yeah.
Like, that's just it.
Right.
Selling a company is like selling anything, but it's just got more zeros.
So you do have to create a pitch deck.
(40:08):
So you do have to create reasons for them to buy.
So that's what the bank helped us to do.
And then they began a process.
They reach out to six companies, four companies.
In fact, all six said express interest.
Two of them couldn't afford us.
Four of them could.
Three of them put in letters of intent.
(40:31):
We then went exclusive with one, Brain Labs.
It took about two months to go through and then boom, done.
I would love to talk about the feeling after.
Yeah.
Yeah.
So we can talk about that if you want.
We can go into the details and then we can talk about that.
What do you think?
Let's talk about the details.
What would be useful to your audience?
Let's do the details first and then we'll talk about the feeling.
(40:53):
Let that be the natural.
So what details do you want to go through?
So I think you've kind of summarized everything.
Like all of these conversations happened.
Were there any sticky points in between there where it was like, OK, this might fall through
or OK, maybe there's, you know, maybe we thought of it differently.
I just want to know in that process, was there any point where there was more
deliberation than you expected and timeline?
(41:14):
Or whether there was anything that you would do differently if you were to go through the process again?
So a couple of things I would.
If I was selling my company again, there are three things I do differently.
The first thing is I would have my books done way earlier.
Every year I would have hired an accountant to run our books and make sure everything was good.
(41:38):
Because those things take time.
The second thing was I would have been aware that selling your company and also running your business happens at the same time.
So you have to make sure that your numbers don't go down.
So there were quite a few times, especially in Jan, February, because we sold in May 2022.
(41:58):
In Jan and February, I was like, boys, the numbers.
Yeah.
But I couldn't tell my team why suddenly the CEO was doing sales millions.
Because you needed to make sure.
And it's so funny because it takes time.
The process takes time from the team, from you on building the business.
But then.
And in that time, if the numbers dip, then that's a reflection on the business, right?
(42:22):
So it's an awkward conversation, but it's not like a terrible deal breaker.
And I must say, I think Brain Labs are an exceptional choir.
I think that.
For an experience standpoint, like the entire experience of having to.
Yeah, because, you know, there is this thing in M&A called renegan.
(42:45):
They give you the deal, then they say, actually, oh, we just found this on page 87.
There's new stuff that kind of changes our original value.
Yeah, they stuck to it and they kept it.
That's great.
And I think that's very, very honorable.
How long did it take end to end?
First email to.
First email.
(43:06):
Whoa, that was pretty good.
Wait, let me think.
Six months here.
October.
Actually, geez, I just realized it actually took longer than I thought it did.
Yeah.
November to April.
OK, yeah.
Interesting.
November to April.
(43:26):
And to be honest, it took slightly longer just because of Christmas.
All right.
And the reason why it was a relatively simple thing.
I'll tell you the reason.
I think there are two reasons.
One was we had a bank who had already sold to BrainLass before.
Oh, so they knew what they required.
Yeah.
And I think generally you pay a premium for experience because the bank we used was not the cheapest.
(43:52):
Yeah.
But man, they made me sleep well at night.
Oh, I see.
Like the guys there, Tristan, Rosie, Lauren, they just.
Anytime I'd get a call from them, I wouldn't feel so.
Yeah, you know they're on your side.
Tell me the good news.
Even when we're knee deep in the Indian, it just stretches.
Yeah.
I'm like, tell me the good news.
(44:13):
Yeah.
And I think they were exceptional, exceptional bankers.
So those were the details there.
But the question was like, what could we have done differently?
Yeah, I think you touched a little bit on that.
But the other bit I was asking was just like, was there any sticky point?
But it sounds like it went well.
Like it was five months.
Sounds like, yes, the regular process.
But because sometimes in these transactions.
(44:34):
Oh, you know what?
Yes, there was a sticky point.
There was a sticky point.
And to be honest, I give absolute full credit to my co-founders and again, to BrainLass and
to the bankers for making this smooth.
Because we were idiots, the way that we calculated revenue was dumb.
So we calculated revenue as gross bookings.
(44:58):
Yeah, like cash revenue.
So if somebody booked a campaign now, even if it was going to launch in six months,
you would realize that.
You would realize it.
Okay, so accruals.
Yeah.
And then someone told us about accrual.
Yeah.
What is that?
What is this new word you're giving us?
And then we Google it and then we found out, yo, our revenue could be 50% of what we said.
(45:22):
Did you have a finance manager?
How do you think you could have done that differently?
Having an experienced finance director.
Yeah.
And did you not have someone?
So we had a finance manager, but really they worked on the Ambrose.
Okay.
And Ambrose is like insanely smart, insanely clever, but Ambrose is not a finance director.
Yeah, absolutely.
So suddenly when you're seeing like cash accountants versus accrual accountants.
(45:43):
And I remember getting this call.
I remember getting this call from Ambrose and Mitch.
You're like, yeah, so it looks like revenue was like 30% of what we said.
It's like, what?
Interesting.
That was really funny.
Interesting.
That was really funny actually.
So the advice to me is-
Was that a moment of panic?
(46:03):
Because the bank that we use was not panicking, I didn't panic.
I also think Ambrose and Mitch did an exceptional job of like removing it from me.
Because I think after the fact, they were like, yo, we were panicking.
Yeah.
But I was just like, I was like, guys, you know,
I was like, guys, you take care of the spreadsheet stuff.
(46:24):
I will make sure that the sales of the business are still doing its thing.
Yeah.
And I would be the guy who would kind of paint a picture, really help with all that stuff.
Yeah.
You do the numbers.
Yeah.
And that really, really helped.
So that was probably the like hairiest moment I'd say.
Interesting.
Yeah.
So the big advice to people is like, make sure that give yourself an annual audit.
(46:49):
Like, maybe give yourself an annual audit.
Yeah.
Yeah.
And don't give yourself like some- like give yourself an annual audit from the perspective of an M&A.
An external person.
Yeah, like an external person who's looking in.
Yeah.
No, that makes sense.
So I don't know if we want to touch on any other areas like during that process,
because it was quite quick also.
So I would say like after, you know, 14-year-old Tim said to himself, by 30,
(47:16):
I need to have crazy money.
I need to not have to think about all the stuff.
When the- was the acquisition like a full cash?
Was it cash stock?
It was full cash.
So after, you know, you get that alert or you like look in your bank.
Yeah.
Like what did that do just kind of for you as an experience like?
(47:38):
So I actually think there are two stories to tell here.
The first one is during the process, I documented a lot.
Oh, really?
And I think it was probably the most impactful thing I did.
Like you just wrote or like journaled?
I sent voice memos.
Ah.
Okay.
I sent voice memos to myself and it's so interesting like to relive some of those experiences.
(48:04):
Yeah.
Once I'm like, you're like, this is amazing.
And then you're like, oh, this is taking so long.
And you end up just being able to relive that.
But in terms of when the money dropped, and I think I've told you before, but I'm happy to share it,
which is when we announced the company had been acquired, it was everywhere at the Times, BBC, Forbes, and all these places.
(48:31):
The money still hadn't been sent.
Right.
It was like in the process of being-
Oh, gosh.
So we're getting all these like congratulations.
The money's not in it?
Where is the pay source?
Right.
And what was really funny was all three of us, myself, Amazon, Mitch, we created new bank accounts.
(48:53):
And it comes to think about it, the logic was quite funny.
For me, I was like, okay, at that point I had Monzo and Star.
I was like, right.
Monzo, if they get like millions into their name-
They're just going to flag it like-
They're going to use it for their funding.
Right?
Oh, guys, we have Series B now.
So I'm like, no way is that happening.
(49:17):
So I got like, I got Santander.
Yeah, you're like, yeah.
I know they've been there for time.
So, anyway, so I got that.
Ambrose, I think, got a Santander.
Mitch got a Lloyd's.
And we're just like walking around Old Street because we've announced a deal, but we're walking around Farrow Day.
So we're walking around Farrow Day, and then we're just like refreshing, refreshing.
And we're like, okay, so what's going to happen?
(49:41):
And then Mitchell refreshes his, and he just starts shouting.
He's like-
Is that the moment it became real for you?
Yeah, yeah, yeah.
And then Ambrose refreshed like 30 seconds after.
And then I refresh, and my socials are in zero, zero, zero, zero.
And I'm like, oh my God.
I am checking every number.
(50:05):
I'm like zero, zero, three, three.
I'm like, I'm thinking, please God, don't tell me.
I'm giving my account number so-called to some random-
I'm stressing.
And then I refresh, and then I started shouting.
And here's the crazy thing about like documenting it.
It's actually, Mitchell was taking a video of this, and I actually have it on my phone.
(50:29):
And it's just me like looking at my phone and be like, ah, just shouting.
And I'm like jumping up and down.
You really captured the moment.
Oh my God.
And all I'm just saying is like, wow, wow, wow, wow, wow.
Like that's all I'm saying.
And that moment, I am really happy that I documented it.
Because, you know, and this is not just with like selling a business.
(50:53):
It can be with anything.
It can be with having a baby.
It can be with having a wedding.
Like as time goes on, the memories fade.
And it's so important to document them in the most like primitive way.
Like not just kind of like some stylized way.
Just as it was.
Like us in Farrowandale popping champagne, being like, ah, and they're like spraying champagne and saying wow.
(51:17):
And like all of that stuff.
That was a feeling which I would never forget.
And I think, again, it doesn't have to be you doing a business.
It can be you getting that job that you really wanted.
It can be, you know what?
One of my good friends, she did something amazing, which was she went on a date with someone.
And like literally in that, like after that date, she was like, I think I'm going to marry this person.
(51:44):
Right?
She did a video of herself just being like, oh my god, oh my god, he's so amazing.
Blah, blah, blah.
And then at her wedding.
That was so cute.
They ended up marrying.
That is the purest thing.
And then at her wedding, they played it.
And I cried.
(52:05):
Because I was just like.
What are the odds of that?
You know, you could record many.
But at least give that one.
No, but I agree.
I think it's beautiful.
Yeah.
So for me, that was how it felt.
And yeah, I think the other thing that's very interesting is what I call like the four stages of exits.
(52:26):
So when you sell a company, at least for me, I think I went through basically four emotional stages.
The first stage was like, what?
This is mental.
This is mad.
Like me from like OK.
And then there was a bit of it, which was like, of course, me from OK.
(52:48):
And then the second bit was like when your world has changed, but like the outside world hasn't changed.
I remember like two weeks afterwards, I went to Sainsbury's and I was expected like a choir.
I'm like, yo, the boy is here.
He's arrived.
And everyone is just like, sorry, I just roll out the red carpet.
(53:11):
And they're buying fricking avocados.
What are you doing, mate?
But that's so interesting because it's one of those things I hear this from a lot of sports people as well.
It's like after they want something.
Actors and actresses, especially the Emmy.
Like once you get the gold, like after you're just like, and then you're like, what is the scene?
I've lived all my life for this and the world is saying.
(53:33):
And then the third one is actually where you basically have to like.
This is going to sound weird, but it's basically you have to readjust to your new level of wealth.
And so what I mean by that is like it took me an extremely long time.
This is going to sound like rich people problems, but it's not meant to be.
But it took me an extremely long time to basically adjust my mindset, like having money.
(53:57):
So like I remember we took a flight to Bali afterwards.
And it took me like a month of agonizing to be like, OK, are we flying business or economy?
And I got my spreadsheet out.
If you do this, but I still have this money, so that's OK.
But then I proper agonize over it.
(54:19):
And I think as with anyone, you have to readjust yourself.
It's like in the grand scheme of things. Exactly.
And then the fourth one is actually good. OK, this is who I am now.
Now, how do I act in the world?
How do I behave? Yeah. Right.
Which can mean very simply that your approach money to friendships is also quite different
(54:40):
where you don't see yourself just like so much as a.
Like a transaction, yeah, because I think that was a big thing.
It's like, oh, yeah, like, do you guys want to come to my dinner?
I'll pay for it. Oh, yeah.
You only see this like an ATM. Yeah.
You have to almost be like, well, who am I independent of this?
(55:03):
So those are the four stages. You get wealth manager starting to sell.
Oh, maybe sharks. Sharks.
You didn't know me before. But what I would say, though, again.
Yes, I did. And I didn't really go with any of them, but it does feel nice.
Yeah, I bet. You know, Timmy, you are one of our value people.
(55:27):
Oh, now value? Now value? Yeah.
Interesting. Interesting. So how much did he sell for?
How much? Oh, that is not a number publicly.
But what we say is it was tens of millions. OK.
It was less. It was less than a hundred and more than 10.
OK. That's like a wide range.
(55:49):
But I'll tell you actually the reason why very quickly, because I know you just said, but I'll tell you the reason why.
Often people don't disclose numbers publicly. OK, tell us.
And often people are like, well, why not? The reason why is this.
Often, if a company is buying you, they're not just buying you.
(56:11):
They're buying a bunch of other companies. Yeah.
And so what can happen is if you say, say your value out or you say your multiples out or something like that, what can happen is any future.
Exactly. Any future companies they want to buy.
Yeah, they just use that as an anchor. Yeah.
You bought this for this and like we're bigger than them or we have a bigger team than them.
So often that's the reason why you're not asked to make public because like you actually impede the future growth of your buyer.
(56:41):
And unless you hate your buyer, there's no reason to do that.
Yeah. Cool. Thank you so much, Tim.
Honestly, really appreciate you coming here, sharing your authentic story with us today. Thank you.
Yeah, good. So I think what would be lovely, I'll end with all our guests with this.
It's two questions. Yeah. So the first, there's a time machine involved.
(57:04):
So now Tim is going back to the beginning of fan bites. You've got one minute.
The machine opens. You see Tim. Probably at that point, just when he's making that decision.
What do you tell him? One minute.
Don't let your ego get in the way. Make sure that you hire more experienced people as soon as you can and also take bigger risks.
(57:28):
I love that. I love that. I love that. Fantastic.
And then the second, for any operator, someone who's ruminating on an idea, who's kind of thinking about stuff, especially for someone who's younger
and someone who doesn't probably have the background right now, then you kind of think of fans like have you done it before?
But you have to do it first time. How, what will you tell them?
(57:51):
Start very small and have relatively small goals.
I love that. Why do you say that? Small goals are more achievable.
And I would much rather hit certain goals, build enough evidence that I'm the sort of person that can hit those goals and then over time make those goals bigger.
(58:13):
Fantastic. Thank you very much, Tim. It was so lovely to have you and thank you everyone for joining us as well.
So I guess till next time. Thank you.
Thank you for tuning in to another episode of the Startup Leap. TSL for short.
Leave a review. Tell us what you think of this episode on all of our platforms at the Startup Leap pod.
Do you have a question? Ask us and we'll ask our guests. Go to the startupleap.io. See you next time.
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