My conversation today is with Mike Boyd. Mike is originally from Brisbane, Australia and currently lives in Singapore where he runs one of the leading car rental comparison websites in the world – Vroom, Vroom, Vroom, among other portfolio companies. He has been an entrepreneur for virtually his entire life, starting at a very young age. Mike built on his experience starting businesses and has evolved to buying them whole. Today he invests his own money, permanent capital, into digital-only companies and intangibles globally, with the goal being to build a portfolio of cash-flow producing companies for the very long term.
Our conversation includes discussion on his early entrepreneurial stories, how he became CEO at such a young age, what he looks for in digital investments, and his experience building a remote team. This one, and our prior phone call, are two of the most memorable conversations I’ve had about business and investing. I hope once you finish listening, you will feel the same way.
I got to know Mike after he reached out over Twitter after seeing my conversation with Trish Higgins and was very generous with his time and experience. If you work in micro private equity or permanent capital, or know someone who does, please feel free to reach out through my website or Twitter – I’d love to have a conversation.
In that video that I tweeted about where you described your thoughts on the future workplaces and had a little bit of a Q and A session, I remember you described a few of your early entrepreneurial projects and your kid sounds like you’ve been an entrepreneur since you were just a young kid. I even remember you talking about a keg rental business. I’d love for you to go over, not only that business idea, but maybe a few others that you started when you were younger.
Yeah sure it would be my pleasure. And certainly the keg hire business gets good mileage, it always makes for a good story. I’m from Brisbane Australia and growing up I’d watch these American movies where you’d see the college parties with the kegs and the red cups and it always just looked like such a blast, but it wasn’t part of our culture and it wasn’t something that was easily obtainable in Australia.
I was 17 turning 18, legal drinking age in Australia, and I wanted to have the coolest 18th birthday party around because why not? This is what 17-year-olds think about and I had my priorities in order, it was all about beer. I was also one of the oldest in my school year, I was born right at the end of the year, so I was a year older than most. I turned 18 before most of my peers and I thought, if I set the bar really high and have an awesome party then everyone’s going to have to try and follow suit and I’ll get invited to a year’s worth of really cool parties. So that was my logic and long story short I wanted to hire a key and have that at my party.
I googled around and even looked in the old-school phone book going back a few years and couldn’t find anyone that would do it. I called the local pubs and clubs and said, can I rent a keg and they said, look we used to do that stuff 20 years ago, but we don’t do it anymore it’s too much hassle. We don’t want people calling us at 1:00 am saying the keg’s frothy or something like that, it’s just not worth the effort. So that really surprised me. I had this idea, but I couldn’t find anyone with supply.
Eventually I found one little company that was renting keg dispensing equipment, but it was on the Gold Coast and I’m in Brisbane. So that was about an hour and 15 min drive away and I spoke to the guy and he wanted a hundred dollars delivery from the Gold Coast to Brisbane and a hundred the next day to come and pick it up as well as an extra 200 dollars. And in my 17-year-old mind that was just way too much money being spent on delivery. So I passed on the opportunity the 18th birthday came and went and there was no keg. And that was very sad.
But a few months later I just couldn’t get over the fact that I was the only one that was potentially looking for this. I just was really surprised that there wasn’t an existing market. I needed to scratch that itch and I did a bit more research and discovered that sure enough it was just this one service provider on the Gold Coast that was too far away and not even serving the capital city in Brisbane. I did a bit more research determined that there was a market in it.
I didn’t need to have a liquor license or any regulatory stuff because you would still purchase from the local pub, but what we needed to rent was all of the dispensing equipment to chill and deliver the beer, the gas cylinder to pump it out, and all the old fancy beer taps and things. So long story short I just left school I was 18 I started my first year at university, had a part time job, studying full time, and I had to beg, borrow, and steal. I begged dad to lend me, I think it was five grand, which was a lot of money and for this latest crazy entrepreneurial idea. He said no a few times and I twisted his arm and it was on the promise that I keep my part time job to pay back the loan because he thought this thing was going to fail. I stayed in university full-time, so I promised him the world and borrowed the money and ordered some equipment in from the US. It arrived a month later or so and I put these boxes together that were basically fancy ice chillers. They had these big stainless-steel coils that were submerged in ice baths that would chill the beer on the way up, which was good for our hot climate, and I built myself a little website. In the meantime, while I was waiting for the gear to arrive, funny story: I went on my first overseas trip with a mate when I finished high school and I’m still tinkering with this idea and I had built myself half a WordPress site literally had done an IT subject at school and didn’t really know much. But I built half a website and put it out there and it was called Keg Hire Brisbane and I just put my phone number and email address on there.
I hadn’t started a business yet didn’t have any equipment yet and we landed in Thailand and we went in, it was the days when you weren’t connected all the time with the 3G sim or 4G sim, we went to an internet cafe about a week later and logged on and I had all these random emails from people asking if they could hire a keg this Saturday or how much to get three kegs for the upcoming football finals or something and I was just blown away. I’m like, how are these people finding me and where are these emails coming from?
And it turns out that my half-built website was now ranking number one in Google for keg hire Brisbane, by accident.
That validated the demands that yes, sure enough I was not the only one looking for this and there really was a supply shortage. I got home from my holiday and that’s when I got serious about, it got the equipment together, finished the website, and I famously paid back the loan to dad in three months. I went on to run that business for three years while I was at university working two days a week or two afternoons a week dropping off equipment on a Saturday afternoon and picking it up from very hungover people on a Sunday afternoon. I had a whole bunch of cash as a uni student which made me pretty popular.
Yeah, I’m sure that helped a lot! So, after university, how did you get to where you are today with Vroom Vroom Vroom and can you talk to us about your move from Australia and the different cities you considered moving to and how that all evolved for you?
Yeah great question, and as they say you can always connect the dots backwards. Coolybar was the name of the keg business and we started that, ran for three years and during that time I also started a not-for-profit organization called the Hive, which was a group for young aspiring entrepreneurs to get together once a month. It was just an event series and we would ask prominent entrepreneurs to come and tell their story and everyone just get together have a drink in a bar and listen to their story for 45 minutes or so. It’s fantastic. It’s just really informal, sharing the knowledge and promoting entrepreneurship. It was also my way of trying to connect with people and find some friends with common interests because it was pretty unusual back then and all my schoolmates didn’t really understand the way I was wired. I was just trying to find some like minds, but when I started that event series I just thought it was an opportunity to learn but I got so much out of it.
Fortunately, a few of the prominent entrepreneurs that came along as guest speakers ended up being impressed with what we were running. We were having 100 or 120 people a month turn up to these things and they would often catch up with me in between or find out a little bit more about this young guy running this and why I was doing it all for free. And I ended up getting a couple of pretty amazing mentors by accident who accelerated my journey. One of those things that came from that was a conversation about social media marketing or digital marketing because they asked me about this keg hire business and for me it was a bit of a laugh, it was a hobby business on the side in terms of what we were earning.
But I told them we’ve never spent a cent on advertising, but we’re booked solid every weekend and all we ever do is promote on social. That was something really interesting to them because they were running big businesses, but they didn’t know what the social media marketing thing was. And they’d certainly never heard of anyone actually making money of it. It was just a fad the teenagers were wasting time on.
I got the opportunity to go into boardrooms and meet with marketing teams at some pretty substantial businesses around the country talking to them about what I was doing and how they could do it because of course with our party hire business, our main demographic, my target market was 18 and 21-year-olds having birthdays. They were ripe for social media and one of the things we would do is send along a photographer of mine to their parties and offer to photograph the party for free and we would then give them two or three hundred photos which they would upload on their Facebook and tag their friends. The photos would spread in a viral way and they would have our little branding down in the bottom right hand corner saying that it was actually Coolybar. And we just got this massive word of mouth, it was amazing and that was quite intuitive to me – it just seemed to make sense.
I ended up going to these big corporate businesses and teaching them what I knew about social media and digital media marketing and pretty much overnight rebranded myself as a consultant. I went from a uni student with a beer business to a digital media consultant charging three hundred dollars an hour. It was just the right place, right time, and with the right connections. It was fantastic.
I actually sold the keg business not for much money but sold it to a mate that I had employed in the business and moved on because this digital world was more lucrative and that led me to the opportunity with Vroom. One of the first ever hired speakers was an early employee from the business Vroom Vroom Vroom, and for those not familiar with it, it’s the largest car rental comparison website in the southern hemisphere. We are a price comparison website and book cars for Hertz, Avis Budget, Thrifty, Enterprise, and all the major brands. Vroom was a startup from Brisbane, it’s not a business that I started, but I met the guys through this Hive network and we were mates for a few years when they reached out.
I think it was 2011 and they reached out because they’d got themselves into a bit of trouble. The business was run by some brilliant technologists that were really good at SEO and were amazing at building the car booking engine functionality, but ultimately didn’t have a huge amount of business experience themselves and weren’t very commercially minded. They wanted to build websites and a few contracts had expired with key suppliers and bills weren’t getting paid and staff weren’t being managed and there was no structure to the business, it was pretty fast and loose.
They asked me to come in just for a couple of hours to help them out looking at these contracts. I was a friendly face, rather than a scary outside consultant. I said sure no worries, I’ve been branding myself as a consultant anyway. I was looking for my next entrepreneurial gig and I went in there and discovered they needed a lot more help than just a couple of hours. I said I’d come back the next day and did that. And ultimately wasn’t looking for a job, I’m not motivated by having a job whatsoever, I’ve always been entrepreneurial. I said look, I can help you guys and you need a lot of help, but I can only at most carve out about a day a week for you.
Anyway, I did that while I was bootstrapping a software-as-a-service business. The Vroom consulting was effectively feeding me while I was investing sweat equity the other six days a week in trying to build the dream. I did that for 12 months and the software-as-a-service business collapsed in a great big mess, a ball of flames as they say. Throughout the year, the major shareholder who was largely hands off in the UK had offered me to come on-board full-time and run the company probably three or four times, and I politely declined because, like I said, I wasn’t motivated by having a fancy job. I get out of bed in the morning to build my own thing and I just said, look I honestly know if I took this job, within three months I’d probably be out of here. It’s just not what burns my fire.
It was on the fourth offer that Pete called me from London out of the blue and he said Mike, I think I’ve figured it out. I know you’re an entrepreneur. I know that’s what motivates you. I want you to come on board, take an equity stake in the business, and run it like it’s your own running full time. Little did Pete know that about three days prior is when my other startup collapsed, my entire world was over, and I was looking down the barrel of debt and it was just serendipitous right? You couldn’t write a story any better! But he didn’t know that and so I played it coy and said, oh gee well you twisted my arm, Pete. You know that’s a great offer. Yeah, I think that’ll finally do it this time. Let’s do it! It took me a couple of years to get to it later, but the other thing hadn’t worked out, literally a few days before.
Oh, you didn’t tell him?
No! I couldn’t, I couldn’t!
I came on board full time, I think I was late 2011, took a stake in the business and really just rebuilt it step by step. Lots of systems and structures and processes that didn’t previously exist that were holding them back from scale. The business was sound in that it had great SEO, had great brand, had a great product, but it was really restricted internally. We scaled it quite quickly and took it from a Brisbane startup to a much bigger global concern. I’m still the CEO of that business today, we’ve got staff in 12 countries, we put cars in every market in the world, and we still dominate the southern hemisphere. We do car rental, motor homes, camper vans, specialized insurance, and all the things related to a car rental comparison model.
I’m actually curious about a few of those operational improvements you made or new processes you’ve added. What things were missing from the business that you added and how effective were they?
It really wasn’t anything revolutionary, it was just the work needed to be done. The business was operating in a very flat structure and startup type environment. There were eight people in an office and there was technically one person in charge, but everyone just did what they wanted. There was no management structure, there was no board structure, there was no reporting, if someone wanted to hire someone they just hired someone, whether or not there was budget or otherwise didn’t seem to matter. It was something a mess.
It was a beautiful mess because that got them to a certain level of success by doing it that way, so you can’t discount the beginning, but it certainly wasn’t what was going to take them to the next level. They needed systems in order to scale. That’s really what I brought to the business: scalability. We just slowly modularized things, pulled it apart, built systems around it so that we could actually have some reporting structure and understand what’s going on in the business. No one was looking at the key stats.
The other thing that we did was actually make sure that we’re getting paid. And that seems like a pretty fundamental thing, but a lot of the car rental companies just weren’t paying us or weren’t paying us on-time. We had to build an accounts receivable process to actually monitor expected commission payments because really, it’s an affiliate model, right? We were making bookings through our own booking engine and at the end of the month Avis would add up that we’ve sent them 5000 bookings and then pay us the commission on each one of them that travelled. But sometimes they’d pay us for three thousand bookings, not 5000 thousand and the money in the bank account is fantastic, but you wouldn’t notice that two thousand were missing unless you were paying attention.
There were lots of that slipping through the cracks. There was a lot of money being left on the table and then there were also things happening where they’d signed an agreement with the company to get a certain commission rate for two years and then the two years would lapse and neither company would notice and it would automatically default back down to a much lower commission rate. These contracts were expired, everyone was still performing under the contract, but we were no longer getting paid anywhere near as much.
And again, it was just us asleep at the wheel with nobody paying attention to that. There were some real quick wins to come on board, tidy it up, increase commission rates, increase the operating capability of the business, add some new talent, and it took a long time. It was step by step, but we probably had the biggest impact over the first three years and then I’d say we’re a completely new business within five years. There wasn’t an area of the business that hadn’t been rebuilt from the ground up.
I’ve heard that from a few other folks who’ve taken over businesses and with, maybe not grand plans, but they had big expectations or ideas for things they could do to improve the business, and then they get to the business and realize that there’s a lot of more fundamental processes that aren’t implemented or are implemented maybe half way or not quite as well. It’s neat to hear that that was your experience as well and you had to start from maybe a lower floor than you expected.
Alex, I see it all the time, particularly in the digital world. I look at a lot of other businesses these days and a lot of people are focused on things like conversion optimization in an online business where tweaking the really fine-grained idea, split testing, or multivariate testing the color of a button, or which message is displayed where, but oftentimes when you get into these digital businesses there’s much more fundamental things broken or just not done or haven’t quite got around to it, or got around to it three years ago and we haven’t looked at it again since. There’s often low hanging fruit for want of a better phrase and you can spend a lot of time perfecting those big things before you really have to get into the last 10 percent of conversion optimization.
You’ve been touching on a little bit, but I’d love to hear about your decision to look for digital-only companies rather than look into both physical and digital companies and then the economics that attract to you to that area. Then, beyond that, looking into how you find these companies, where do you search? You’re obviously in a very international scope. That seems like a pretty big project even just to find them in your own country, but what things do you do to branch out beyond that?
Yeah there’s a lot of jumping off points there. I guess probably one of the first parallels is I started in the party hire business where I was renting physical equipment and it always frustrated me when I had only three or four sets of equipment and people would call up and want to rent a fifth and I didn’t have it. It was literally just money missed and I knew that at the time there wasn’t even a competitor in the market. So that was an unhappy customer that couldn’t be served by the market. And so obviously I invested in more gear and tried to grow but it was always a key frustration that I couldn’t serve that customer when they were there at the door.
Fast forward to Vroom Vroom Vroom and we’re still in the hire business but instead of owning the cars, we rent up to a thousand cars day all over the world. But we don’t own any cars, and I’m not trying to draw parallels to Uber or anything like that, but it’s just a beautiful business model. We don’t have the headaches of owning cars, servicing them, cleaning them, repairing them after damage, certifying that the person driving it is licensed, and all these other real physical operational headaches. We’re simply better in acquiring customers in an online sense than the car rental companies themselves. We’re an extension of their digital marketing capability and they’re happy to pay us a commission for that because it’s cheaper than them paying Facebook for ads or Google for ads or buying billboards. We’re just a cost of sales for them. We can sell what we can. We can book one car a day, or we can book a thousand cars a day and the market’s not going to run out. We can do as much as we want. I love that scalability.
I also love this concept that you can build a system that adds great value for people and serve them even when you’re not physically present as a human being. I wake up in the morning, and I’ve got a few digital companies now, and I wake up in the morning and I check my dashboard app. We’ve got app developers now and one of the things I had them do for me a little while ago was build me a dashboard app to show me the stats across all my own businesses. It’s private, it’s just for us internally, but I wake up in the morning and I see how many how many cars we’ve booked overnight, how many insurance policies we’ve sold overnight, how many app downloads we’ve had of our new products, and all these sorts of things. I just love that it’s a 24 hour a day, seven days a week type system where we’re serving people and their needs at any time.
I’m speaking to you from Singapore today and we’re still serving the US market, the European market, and during the day we’re serving all over the southern hemisphere. I love that there’s no bounds on that. And you asked me about global before so how did I move and where if I moved around the world with different cities? I’ll jump in now that we’re three questions deep. I just remembered your question!
The Vroom Vroom Vroom business was founded in Brisbane and that’s where I’m from as well. But as we scaled we had a need to employ people in different parts of the world, even though we didn’t have an office there. We were very early adopters of a remote workforce before we even really knew what that was, just out of pure necessity. When it was a small less than 10-person team, we started building the technical capability to put cars on the other side of the world, which really wasn’t that much harder it was just different market, different product. But the website was still capable of it, so we might be booking a car in London for instance for a customer while we’re asleep, but we would wake up in the morning, and I say we but this was before my time, would wake up in the morning and there’d be a customer service email that was six hours old that someone had sent us from London and by the time we replied it was just too late. It wasn’t the service standard we were trying to deliver. We quickly had to figure out how to hire someone remotely in the UK or at least close to that time-zone who could just do email and ultimately move on to phones and live chat and all the service channels that we have today.
We used the freelancer websites like upwork.com and a few others, it was odesk back then, and hired people that were looking to work from home that had experience with customer care and we would literally just onboard them into our software-as-a-service tools that we were using for customer support, help desk system, our email system, and train them up over Skype and set them free. It had it had some wins and some losses, I’ll admit we really didn’t know what we were doing in the early days and it was very difficult to manage people on the other side of the world in different time zones, but we persevered and over the last decade I’d say we’ve built some real IP in running globally remote teams. I think I said before, these days we have team members in 12 countries, but we’re only located physically in three locations. Our head office is still Brisbane, we’ve got a back office in Manila in the Philippines, and I’m opening another office here this year in Singapore. The other nine countries are represented by people at work from home or work from a coworking space and simply because they bring digital skills that they can do with a laptop and an internet connection. We absolutely love that global marketplace of talent, but also of serving customers all over the world in different zones.
I love the website you have on CEO AMAs, I thought that whole discussion was really fascinating. For those are interested it’s ceoama.co. I’d love for you to just chat very briefly on your experience with these remote teams and how you use the CEO AMA format to communicate with your team members who are literally all over the world.
The CEO AMA is something I came up with a few years ago. It’s inspired by public AMAs on Reddit, and for those not familiar AMA just stands for “ask me anything.” Oftentimes they’ll have someone famous or prominent in an industry jump on Reddit and just do Q&A for an hour or so.
I thought the idea was cool and one of our DNA within our group is transparency and I wanted to do that internally within the group to see if there were questions that the team had that I could answer, particularly because they’re spread out and I don’t get time with them all the time. We also did it to promote a healthy internal discussion and encourage people to speak up and ask questions if they have them about the business. I had no idea if it would work or not, but we tried it a few years ago and I effectively just turned on a webcam and started streaming live to a private YouTube channel. We distributed that link internally to the team.
These days we use Slack as our chat collaboration tool we share the link there and in the two hours prior to the AMA we open up a channel where people can publish questions and they just type in questions that they’d like to answer and the rest of the team upvote them if they’re really interested in that. All that simply does is help us filter the questions by the highest priority, so they get answered first in case we run out of time. When we first started the AMAs, we built a Google Form to allow people to submit questions anonymously and we still allow that today because I really want to encourage people to ask anything, but we’ve actually found over the years that public questions and the ability to vote on them has improved the quality of the discussion overall and people are still asking some really robust questions even though they’re no longer anonymous.
So the questions come in they get voted up, usually we get about 60 or 70 questions generated in the two hours prior and this is from a team of about 60 odd and it’s amazing to see the questions that get asked and then amazing to see the ones that are popular that lots of the team want to see answered because that gives me an incredible insight as a leader to what people actually want to know but also where can I do a better job of communicating. Why didn’t they know this stuff already? Particularly those questions about the business.
I jump on a YouTube stream for an hour and I haven’t seen the questions prior and that’s really important. It really is ask me anything. It’s very transparent. If I don’t know the answer to the question, I’ll say I don’t know and if it’s a really difficult question to answer they’ll see me squirm on camera, and that’s important! If it’s a funny question, like can we have a massage chair in the office or something we’ll make a laugh out of it. But there’s also some really robust, incredible questions about the strategic direction of the business or what’s keeping me awake at night as the CEO or what books am I reading at the moment. It’s been absolutely incredible, the feedback from the team has been just amazing. We run them about once a quarter and that seems to be a good cadence for how often they want these sorts of sessions. And the team are always extremely grateful for the transparency they get back from me and the knowledge I share.
But if anything, I’m more grateful for the opportunity to learn from them, what’s important to them through the questions they ask. It’s an incredible little communication exchange and I encourage more and more leaders, they don’t even have to be CEOs of anything just a leader to basically turn on a video and or sit in a room and do live AMAs with your team because it’s incredible the assumptions that I make about what I think people know and understand. And then when they ask clarifying questions about it I realize there’s a gap in my communication and I can do it so much better. It’s amazing learning opportunity.
I love that format. I love that idea that you don’t know everything about your business and other people in your team are finding out little bits and details that maybe you weren’t picking up on and they’re giving them back to you. I think that’s really interesting.
I’d really like to discuss your sourcing of deals and how you go about finding new companies to buy and how that process changes by the country. If you’re looking at a company in Japan versus Australia or Vietnam how do they each differ? I assume the cultural differences come in a great deal, and then how do you go about filtering out these digital companies?
Just to paint a little bit more background there. The Vroom Vroom Vroom business is our platform business, but we also launched another business back in 2014 called Hiccup Insurance which is a specialized car rental excess insurer. We built a cool technology platform for that and we issued insurance policies underwritten by Alliance and it’s a natural upsell. All of our customers that are renting cars, we offer them insurance in case of damage while they’re on their journey. So, we do a lot of car insurance now ancillaries, we’re looking at parking verticals and other things related to mobile homes and things like that.
If you think of it in terms of a traditional private equity model, Vroom Vroom Vroom being the flagship comparison site and the platform business and then there’s these other bolt-on businesses attached to that building a bigger group. Today we refer to it as the Vroom Group and we are actively looking for other products and verticals we can bring to market, either by building them ourselves and resourcing it up, or by acquiring and integrating into the group. So that’s one little part I’m happy to talk about that within the Vroom group, but then the other side of it is on the private side.
My wife and I actually work together in the group and we have quite complementary skill sets and we have started something called Mudbrick Capital where we’re actually looking to acquire digital intangible businesses similar to the ones that we were running and operate them using that existing capability and resources and building a wide portfolio that are diversified away from travel and away from car rental. We’re pretty excited about that, but it’s still early days and we’re looking at a lot of opportunities in the digital intangible space. So sometimes I’m talking about within the Vroom group if they are closely related to online travel and sometimes I’m talking about with Mudbrick Capital. We’re looking for businesses with similar characteristics, irrespective of where they are geographically in the world.
If we’re talking about internet businesses, I’m typically looking at them if they’re in English. So that’s the first qualifier. If they’re in Japanese for instance they’re no good to me. And that cuts out a sizeable chunk of the market. But in terms of digital entrepreneurship, most of it’s in English as well. We’re looking at businesses that are intangible in nature. What I mean is not physical. We’re not buying e-commerce companies that have physical inventory to ship. We’re not buying fresh food or produce businesses that have perishables that age and go off. We’re buying digitally intangibles similar to Vroom. I often say that Vroom is actually in the business of selling a confirmation email with a booking reference number for Avis attached to it. And the insurance business is in the business of selling a policy confirmation email with a policy number and my cost of goods sold for those businesses negligible, it’s the cost of sending an email. We do have user acquisition costs, but from a traditional sense we can issue as many of those types of products as we want without running out of resources because we’re just sending emails.
We love to look at things like digital products, one-time-use software, online learning where people are buying courses or buying some specialized nature education by buying a digital download, software-as-a-service to an extent, but we prefer to do that B2B space in software-as-a-service. Happy to talk a bit more about that. Membership sites, sometimes large affiliates, but ultimately these infinitely scalable digital intangibles are where it’s at.
Now the reason why we look at that space is for a couple of reasons. One, they tend to have incredibly fat margins and we like fat margins. But in this digital product space, because the inputs are so low you’re more buying expertise or you’re buying some curation product the margins, or the gross margins, can typically be upwards of 70 or 80%. And when we look at a product, rather than a business, that’s often what we see. When we’re buying a business that’s a little bit more robust and much bigger in scale and built the whole business around the digital intangible, then they tend to be running an EBITDA margin close to 40 or 50%. And that’s indicative of what we’re running within the Vroom Group as well. Even if the gross commissions on these sorts of car rental products aren’t that big, we can run the business so cleanly in a digital environment that of the cash we do make we tend to keep half of it, which is substantial. We’re basically pulling the cash out of the existing businesses and looking to deploy it in more businesses and ultimately compounding that into a small portfolio.
We’re also looking for things that we can own in perpetuity, or a very long term because the model is really built around cash flowing businesses and redeploying that cash buying more of them because the other challenge with these sorts of sustainable profitable digital intangibles, sorry if that’s a bit of a mouthful, is that the capital cannot be readily redeployed. Once you’ve covered your marketing expenses and you’re paying a bunch of expensive, but highly talented software developers to reinvest in the product and build out new features, there tends to be little capital that you can redeploy in the digital business. Other than enormous amounts of customer acquisition costs which usually just goes to Google ads or Facebook ads, and that’s not really a good use of capital. We’d like to build recurring revenue models and repeat customer models in pretty fabulous niches, in our opinion, that fly under the radar and are profitable year over year rather than trying to be a land grab and taking a V.C. type approach and just pouring money at user acquisition, irrespective of whether or not it’s profitable.
We’re really big on net profitability so that also cuts out a huge number of things that we look at in the online space because when we’re looking for businesses to buy, all of the media is dominated by the V.C. and the Silicon Valley model, which is fine, it serves a certain part of the market. But it is only as part of the market. There’s a lot more out there and you can read Tech Crunch and all of the other major mastheads in tech and it seems like every other article is promoting a capital raise. Such and such just raised a bazillion dollars, it’s like oh good for them. I’ll wait for the article in two years’ time saying unfortunately it didn’t work out, closing up shop, or they’ve been acquihired away because they couldn’t find product market fit. For us, we’re not playing so much in the startup space. We’re buying things that already have proven markets, are thoroughly profitable, and we’re buying them and helping them scale.
That’s fantastic. I love hearing about the economics in particular. I’d love to hear more about the types of companies that you’ve found through Mudbrick Capital, I’m assuming you’ve acquired a few of them. Has that process been pretty smooth or have there been a few learning lessons along the way when it comes to the actual transaction of buying these companies? How have you learned and evolved your process in buying a company from an owner?
It’s a great question. Mudbrick Capital was literally born about six months ago so it’s brand new in the world and still has a lot to learn. So, don’t let me oversell that idea to you in this recording but I’d love to pick it up with you in a year’s time and see how far we’ve progressed. But look, the early lessons. Let me talk about that. So obviously we’re playing in a space that we know reasonably well because we’re participants already, but we’re now formalizing the structure of the capital and trying to do it in a bit more scale.
The one lesson we’ve seen is that a lot of the digital businesses for sale just rubbish. So the things that you find published online or promoted through the normal course and things like that are just the bottom of the barrel and that’s what you’d expect right. They’ve already tapped their private lists, or their network and those people have already passed on it, probably twice. And by the time it hits the internet it’s open slather for someone silly enough to buy it. Not to say that there aren’t some gems out there, but you’re filtering through a lot of rubbish. And what I mean by that is at the very low end there’s people that are selling pretty scamming affiliate websites or Amazon fulfillment businesses that they’re doing well for a couple of months and they try and extrapolate that out for 12 months prior to come in and get a ridiculous multiplier on or something. And it’s not a real business. It’s a fly by night pump and dump.
And there’s also a lot of scammy people that have aggregated thousands of domain names and built a link network or are selling dodgy e-books. I mean this stuff is nauseating. It’s not real business and it’s not something that you want to look at in a PE model. I think it’s just a time waste, but unfortunately, operating in the digital space, you do have to sift through a lot of this. So one of the early lessons we learned was that, for a start, we’re not going to find most of all opportunities in a public retail salad bar.
We’re going to have to build our own deal flow and go about it an interesting way. And everyone talks about proprietary deal flow, it’s not so much about just saying that, I think it’s more a necessity in this space because people are either trying to sell businesses at the high end on a VC type multiple where they’re not profitable, but they have unrealistic valuations, or they’re absolutely micro and have no sustainability mode.
We’re looking at a sweet spot in between. We’re operating below traditional private equity, I call it micro private equity. We’re in the space of about $250,000 to $2 million dollars a year in owner earnings. That’s the area that we’re looking at. And these sorts of businesses transact at the very low end at about two times up to the high end of about six and a half times if they’re incredible and growing.
But those sorts of multiples might surprise some people out there because they’re still pretty low. And it’s because this is private markets extremely fragmented marketplace and a lot of people are trying to sell an existing, mature, and profitable digital business get drowned out by this VC model. They either think that they can get an astronomical valuation because they are a tech company, or they have absolutely no one to sell to because everyone in the space is an angel investor or a VC, not someone that wants to own a company and operate it sustainably for another decade. And that’s the void that we’re trying to fill.
We are happy to buy, own, and operate digital intangibles for the long term. We’re not trying to pump them up and flip them. We have no outside capital, so we are under no pressures to return capital to investors within seven years or within five years or anything like that. I mean that might change in the future, but at the moment we’ve got this group of cash flowing companies that is generating substantial capital that we’re looking to redeploy.
I’ll talk a little bit about where we’re finding opportunities. I’m a member of YPO which is Young Presidents Organization and it’s a network of CEOs and founders of substantial businesses all around the world. And most people, at least in my chapter in Australia, are not tech companies. A lot of traditional businesses and that from construction to agriculture to food processing and all sorts of just big physical stuff. And I love it because I learned a huge amount and I’m exposed to things that I never normally see in my world, and vice versa.
The other members that I spend time with love to get a bit of a tech perspective because all businesses are exposed to tech these days, but I can use an example of a friend of mine I was talking to recently who owns a shipping container storage facility called a container cark. He has these enormous forklifts that lift up shipping containers and stack them on top of each other and has a facility where he stores thousands of these things near the waterway because containers come into port, they’re unloaded, and they need to go somewhere before they are reloaded and put back on a different ship. And there’s a whole logistics program behind it.
But he was telling me that they use a very legacy and proprietary system that they bought from someone that literally scans the barcodes of the containers coming into the park and scans them out. It’s just their inventory system, but because they bought this system from someone years ago, they are using very old school PDA devices out in the field to scan these barcodes and they’re paying $3.50 out of every $10 in revenue to scan a barcode. $3.50 in and $3.50 out across tens of thousands of containers, and that just blew my mind because 35% gross margin on a barcode scan, you just don’t see that in a technology world. But maybe in container parks you do.
And I’ve dug a little bit deeper to understand that this really was a very niche business, substantial in its revenues, but it was also under-serving my friend and his business because it was it was well and truly out-of-date. These days anyone with an iPhone in their pocket can scan a QR code or an Android or what have you, and barcode scanning technology is free for a start. The service that built on top of it was not cloud based or backed up, they had a server sitting in the back room of this demountable shed in a container park just to make the scanning work.
So, as you can see we find some pretty amazing stuff out there some, pretty crappy stuff as well, but that brought an opportunity for us where we looked at either buying that business and turning it around and improving it, because they have some pretty sticky customers as you can imagine. Or we can replace the business through competing.
So that’s probably one differentiator in our model where we’re happy to buy, own, and operate. We also come from a background of where we’ve founded companies and are happy to operate them to a really high standard. So that’s a model where we had an existing customer who said this is my pain point, this is what I’m currently paying. If you can buy it and improve it that’d be amazing. But if you can replace it at a cheaper rate and at a higher service offering, I’ll be your first customer and I’m happy to sign a contract to that effect.
So that gave us an opportunity to basically run the numbers on founding versus buying it. And we’ve got something there in DD at the moment. So the YPO deal flow, even though it’s not really a formalized process, is where I’m getting a lot of proprietary opportunities that others normally wouldn’t find. I’ve been seeing some stuff at a higher end where I’ve been through food processing facilities and large-scale agriculture that are using similar sorts of very niche software to manage the vegetable count, to see what’s coming in off the farms and processing facilities, going through washing facilities to clean potatoes, and things like that and then count them based on weight and sort them based on bag and all those things. And again, I’ve found businesses that have been owned for 20 years that originally started off as desktop software that have tried to make the move to cloud and have ended up somewhere in between. And they have usually in the in the range of 20 to 30 customers, so a really high customer concentration mix but also a very deep moat. Because it’s not the thing that you can just bolt in Salesforce or something like that to replace its very nature. We get pretty excited about those opportunities because they tend to be the owner tends to be involved founder-owner. We’re finding that they’ve owned them for 20 years they’re in their mid 50s 60s, they’re potentially looking to retire, and they have absolutely no one who can wrap their head around this space because it is so proprietary, and they don’t know even how to go about selling it.
We approach them with a conversation, it’s not usually in a rush, but we present ourselves as someone that they can turn to when they think that they might like to start a transition out. And we tend to take a majority stake or a 100% stake in a business like that in an owner for the long term. We’re happy to have this type of cash flow.
How big of an impact is that on sellers when you explain to them that you don’t have any outside capital and it’s all your own. And part of the reason I ask this question is I have found that in order to acquire businesses and realize those returns really effectively, it’s really important to have this permanent capital where it’s your own money, and you don’t have any outside investors that you have to, like you said, return capital to. How big of an impact is that on the sellers you’ve talked to and how important is that when they’re making the decision whether to sell to you or somebody else?
It’s a great question. I think those of us that have read up on this space understand the impact of that, but some of the potential symbols we speak to don’t even have a grasp of it yet. They don’t understand the different types of buyers. And so therefore something that I think is a competitive advantage, they don’t knowledge as far as us being better than the next guy. They don’t understand that the source of capital matters and the deal terms matter.
The ones that do get it really does give us an edge and it more becomes a sale based on personal relationship. Probably the only downside is I spend a lot of time on airplanes and a lot of time shaking hands and walking through businesses that I know nothing about, which I find fascinating, but it’s not the most scalable model. And that’s okay because I appreciate that you have to go where other people are unwilling to go either to find the deals that aren’t affiliate websites on the internet, so the permanent capital model is an interesting one.
We are happy to deploy that capital because it’s our own and deploy it in a permanent way because we know the return we can earn on it. I spoke about the multiples that we talked earlier from two times to, I mean really, it’s three to four times, but the very high end you might get into the five and sixes. But if you’re talking two to four times, the average is a transacting in the high threes and fours you’re talking about something that the transaction at four times is a 25% return on capital. You own it for four years and the capital returns.
So that’s assuming no decline in business and no improvement in business. And we tend to think that we’ve got some pretty strong business processes and operational discipline that we bring to the table, as well as a whole bunch of efficiencies that we can bring. And by efficiency, I don’t mean to carve out costs or staff. We would like to keep a business that’s running well and just add to it.
But because we’ve got global teams and understand how to run remote teams around the world, if a business that runs in a rural city that is a technology company but focuses on agriculture and it hasn’t yet harnessed the overnight workforce of low cost labor in Manila for instance to just do data processing, then why can’t we add that to the business and help them move more quickly or more efficiently? It’s not often about removing things. It’s often about adding things or streamlining and the owners that get that, love it and often find that they’ve been quite lonely in their ownership of these businesses, particularly if they’ve run them for 20 years. No one gets it, or no one wants to get it, and they have no one to talk to about it. And so, when we come in we’re interested, and we genuinely want to learn about the business, we often reinvigorate an existing owner and they tend to want to retain a minority stake and stay around for a bit longer because all of a sudden, they’ve got some extra resources and some interested parties to take it to the next level which is really exciting. It’s not all based off their own steam.
I find it interesting that the multiples that you’re finding for these companies, these digital companies, are the same range of multiples that most other private companies are transacting at, and that these companies have typically much larger margins and larger scalability. Why do you think these digital companies are still only trading in that, like you said, two to four multiple range?
I think it speaks to the very narrow band of digital companies that we’re looking for. So as soon as a digital company is sustainably profitable, their valuation upside is limited then based off typically their EBITDA, or a similar metric, and that growth rate.
What we actually are looking to buy are mature, profitable, digital businesses, and by mature, I mean we’re happy to buy a business that’s consistently profitable but growing maybe only single digits. A lot of people in the tech world would go, ‘I only want to buy a business that can double or triple or quadruple or something every year. I want the hockey stick growth the V.C. world chases.
I’m looking for the opposite. I’m looking for consistent, cash flowing assets that just happen to be digital. And so as soon as you look at something based on a discounted cash flow or an IRR or something like that, it comes back to pretty simple metrics to traditional businesses. Yes, they have wide margins but that’s already accounted for in the EBITDA that they’re generating. There’s often a tradeoff, if you’re looking at traditional businesses where maybe I’m looking at the software that runs and agricultural processing facility versus buying the agricultural processing facility. If I was buying the facility, I’m getting physical assets and other collateral that actually help bolster the valuation. If I’m buying a digital business, all I’m really buying is the future cash flows and counting on the fact that the existing contracts with customers renew and stay with the business. I don’t have a lot of assets to back the purchase so I’m comfortable with that. A lot of people aren’t.
And the other thing too is that I should clarify, the EBITDA margins that we’re achieving across the group that are close to 50% aren’t necessarily normal. That represents well-run, efficient, and lean operations. When we look at some of these other product businesses, the EBITDA margins tend to be much lower during our due diligence. Some of the upside is that we usually identify ways to actually either increase the profitability of the business or have a look at some of the expenses that the current owner is incurring that they really don’t need to be. And again I don’t mean that in a ruthless PE model, more that typically I get the loan that they’ve just incurred costs that are hanging on that don’t need to be there anymore or they pay for the kid’s private school fees and the holiday up the road and that sort of stuff that you have to have to weed out that tend to get into the books of very private businesses that have been owned privately for a long time.
I’ve heard that other private expenses tend to get looped in with some of these companies and that leads to a discussion around that EBITDA that you are first presented with when you initially look at the business. From that initial number, what things do you add or take out of the number that get you to what is most likely the realistic “owner earnings” of the business itself?
I wish there was an easy answer for it. It tends to vary by industry and by business. If it’s a B2C digital intangible, then often what’s not represented accurately is the cost of customer acquisition. Oftentimes a seller will represent that those costs are minimal or a fraction of what they actually are. Those sorts of costs can be spun in lots of different ways by saying it was just a one-off campaign, but we don’t need to spend that money again, or all of our money comes from recurring customers, when actually it’s 30% and things like that.
So, understanding a combination of digital analytics as well as the financial and making those two numbers talk to each other is important because in the digital world the biggest costs are typically marketing. Digital marketing is expensive and businesses that rely on Facebook or Google ad spend turn us off pretty quickly because it’s just not something that you can control. It will move pretty quickly and ultimately, they tend not to be brands. They tend to just be something where there they’ve got an acquisition machine that works for now but won’t always work, whereas we would prefer a B2B business with sticky customers and very high switching costs. Or, if it’s a B2C business, we want to see a leading brand or some sort of dominance so that people are coming back directly to the service rather than going via Google or Facebook to find it. So that repeat rate is really high and really important.
B2B, we tend to see a lot of other business expenses that are owner expenses built in that they try to add back to boost the EBITDA. And we do take a pretty close look at add-backs because the arguments as to whether or not they should be in or out are usually interesting. On the B2C side I’d say it’s all it focuses around acquisition costs as to whether or not it’s a true indication of, if you purchase the business, that could you actually continue the growth right without reinvestment. And oftentimes after a bit of adjustment the answer is, ‘no.’ It’s not because people are being dishonest, it’s just that everyone gets dollar signs in their eyes and you can’t help but tweak that EBITDA a little bit.
You spoke a little bit about it and just brought it up as well, but the reinvestment risk for these digital companies like Vroom Vroom Vroom and the companies are finding in your searches. I’m really curious if the if part of the reason you started Mudbrick Capital was that there was this reinvestment risk in your own, original companies and you needed somewhere for that money to go and, like you said, it’s hard to put it back into the business sometimes. Is that part of the reason you’ve started this other investment vehicle?
Part of it is private diversification. Mudbrick Capital is a family operation that we hope to run for decades and build a fairly substantial portfolio of assets there and ultimately buy similar assets that are cash flowing and use that to buy more and compound them over time.
But in terms of the reinvestment risk in a business like Vroom Vroom Vroom, I’m happy to give you a very specific example. So, this is the 18th year of operation, which is almost the age of the modern internet. That’s a very long time for an Internet based business to be around and we are that exact definition of a mature digital business. We have no debt, no outside capital, no service requirements whatsoever, and we have EBITDA margins of 50%. So, it’s a cash machine.
But the growth rates are tiny, they’re single digit percentages because we’re mature, we’re big, we own the Australian and New Zealand market and a lot of the Asian Pacific market. We book cars in the US and Europe and all over the world, but those markets for us are tiny. The reason for that is our brand is well known down under and that’s what we started, but also our major dominance is we got an early start. We’ve got a head start advantage on SEO over a decade ago when SEO was critical. We ranked number one, number two, number three in Google for searches like ‘car rental Sydney Airport.’ And to this day we maintain over 10,000 content pages relating to car rental in various locations around the world that help us rank.
Part of our whole strategy is useful content for customers so that they find us when they’re looking for us, because in that market you don’t need a car, you don’t need to rent a car every week. You might rent a car once a year. And so there’s no point blasting you with an email three times a week to say hey I’ve got a special 10% off rental car because if you don’t need a car you just don’t need a car. The strategy for that business is more around discoverability and being there when you need us. And then after they’ve discovered us retaining the customer and having them come repeatedly back to us directly and back to that memorable Vroom Vroom brand. We also own other flagships like carhire.com.au I do in Australia and other brands that do basically the same thing.
But we’ve learned that the Vroom Vroom Vroom brand does the best over time because it’s memorable, it’s sticky, and it is actually a brand. We still do incredibly well from SEO and some people think that’s risky because it’s too many eggs in the Google basket. And I agree, which is part of the reason we want to diversify, but also to some extent I disagree because we’ve maintained it for 10 years and it’s a lower cost of customer acquisition for us because people find us free through Google. But it doesn’t take into account the 10 years’ worth of investment in content and team and everything else that we’ve done to put us in that position.
We have a competitor Rentalcars.com which is the largest car rental comparison site in the world and most probably be familiar with it in the states. Those guys finally discovered Australia about three years ago, before that it was just too small for them to bother I think and they came in and they drove $3 million dollars marketing and three months and bought TV ads and billboards and lots and lots of Google ads. So even to this day, they still spend on Google to outrank everybody and buy the top Google ad for car rental search terms, but they’re doing so at a loss leading position that we would never bother. We have the organic results, but they might still be a couple of ads above us and I’ve spoken to the team over there because we see each other at industry conferences, and the last I heard was that they were counting on a repeat rate of 3.6 rentals per customer in order to break even on that spend. The ad spend was so high, and it was so loss leading, that they’re hoping that the customer would repeat effectively four times and book a car three and four times to make some money. Now I know that the average consumer only rents one point seven cars a year, so you’re talking about trying to get a lifetime value of customer over five years which just doesn’t happen in the travel world and even the digital world. It moves too quickly. These guys just have deep pockets. They’re owned by Booking.com and they’re fueling this funnel of acquisition that doesn’t make money. And we are the opposite of that. We’ll take the mature slow growth of organic and a much lower cost of acquisition and instead get people to return to our brand rather than trying to compete with them on ad spend.
So, in terms of reinvesting capital and getting back to your core question, that’s really the only place I could deploy large sums of money to try and compete in the marketplace. I’ve already ranked number one in Google, so I can’t reinvest any higher. I have a disproportionate spend on I.T. and software development staff because that’s how we do our data. We add new features or have a better user experience or a better booking flow that’s faster and easier.
That thing is incredibly important to our business and that’s how we deploy capital. But once I’ve satisfied that need, the only other place I can put it is ad spend at a loss. And that just doesn’t make sense to me. I’d much prefer to pull that cash out and put it into something that actually has a return, rather than a negative return.
As we begin to close here I have two final questions for you. The first one is what is the most fortunate event to have happened to you that was completely by chance?
Well I don’t know if it’s completely by chance, but I honestly have to go back to that story I told earlier when my business partner today called me from London three days after my startup collapsed and, to add a bit more to that story, I was 20 or 21 so I was young and I’d spent the last 12 or 18 months building this software-as-a-service startup for the mining and engineering space and we built some pretty incredible software. And the deal was that that I knew a little bit about digital and I knew how to run digital teams. I came on as the managing director to run the business and I was backed by two businessmen that had engineering firms or things already related to the industry that we were going to sell software to. And they were the financial backers. So those three of us, in an equal shareholding, were all directors. But I was in it for sweat equity and had no money down and they we’re going to fund the investment for a couple of years until break even then and then we’d all be fabulously rich. That was the plan.
And unfortunately, what happened was this gentleman ran out of money, but they didn’t acknowledge that. There was a downturn in the mining industry in Australia and their other businesses suffered and their ability to fund the startup then wavered, but they tried to pretend like it didn’t. So unfortunately, it ended up being a case of fraud where they were actually shuffling cash from one business account into the other business account and then quickly moving it out again as a shell game to try and make sure it looked like all of the businesses were in order and they very much weren’t.
So, when we had payroll a few times and that was my team, I wasn’t getting paid anything, but my team were, and I was working with them in the trenches every day to build incredible products. What I should have done earlier and demanded board meetings’ access to financials and things like that. And I was only 20 and pretty naive and dumb and I was along for this journey with these people that had been there and done it before. I mean they were 20 or 30 years older than me and I trusted that they knew what they were doing. And I learned that lesson and we held a seven-hour long board meeting that finished at three in the morning and ultimately after I went through the financials and we forced it to the surface, I realized that we were trading insolvent, and effectively illegally. We made a decision that night or early morning that we had to cease operations and we ended up, the very next day was the hardest day of my life, sitting in front of my team and telling them they no longer had jobs and we were closing up shop. I literally carried the furniture out. It was absolutely awful and something I never ever want to repeat again.
It’s probably one of the reasons why I love profitable businesses rather than debt fueled bombs that some people build because I am always managing that downside risk. When it collapsed, I think I was 20 and even though I was not a financial backer I had a third of the liability debt. So, we had vendors and things that haven’t been paid. And when we wound up the business they still needed to be paid. And I’m 33 percent of the company so all of a sudden, I was young, and I was on the hook for money I didn’t have and thought that I was going to end up bankrupt as a 20-year-old. I didn’t think that was a very good start to my entrepreneurial career. It took me about a decade to get over to be honest, but so obviously Pete calling me a few days later and offering this lifeline of coming on to Vroom full time and gaining some equity in that business was an amazing saving grace. But the other thing was, and I still maintain is one of the best deals in my life, and that was convincing one of these guys who had a cousin that had made some money and previously always loved the products that we built in this engineering space and had always wanted to invest but none of us wanted to sell. I did a deal with him to effectively fall on my sword and sell all of my one third share of the company in exchange for him to extinguish all of the outstanding debts and pay out the remaining payroll for the team. And it wasn’t enormous money, but it was substantial six figures and in exchange for that he and the two other gentleman that had done the dodgy would effectively start the company again under a new name in a few months’ time with no debts and they’d have another go at it, but I would move on and have nothing to do with them.
It was so hard to walk away from what I considered my baby. And after putting so much time and effort into it. But it was getting out of that debt trap and never going bankrupt and all those sorts of things was the best thing I ever did. So, it gave me a clean start to then go and build something incredible at Vroom Vroom Vroom and I’m so grateful for it.
That’s a fantastic and very sobering story. What would you say is the best business you’ve ever seen, not necessarily just the ones you’ve been looking to buy, but maybe just in your general day-to-day what is the best business you’ve ever seen?
I don’t know if it’s the best I’ve ever seen, but one that just popped into my mind was a company called Envato. Some people listening might know this as Themeforest.net. But they’re actually an Australian company that has revenues in the nine figures, one hundred and something million from memory. No debt and they run a digital intangible marketplace, which is why I think it’s fantastic of course, basically they are a series of websites that sell WordPress themes and graphic design templates and they’re a marketplace where makers upload a theme for $40 and anyone in the world can view it. And Envato will clip the ticket for 15-20%. And so that all of the products that they represented are digitally tangibles with really high margins. They don’t even have to make any of them. They just have the marketplace and the traffic, and they’ve diversified across multiple brands and multiple niches of graphic design at WordPress themes and Juno themes and all these other frameworks and things.
So, I just think it’s an absolutely fantastic business. They’ve built an incredible amount of scale. They’ve now got network effects because of the size of the marketplace and there’s just there’s no inventory. The input cost in running that thing is a substantial team of clever people but it looks like what they’ve built is incredible.
Thank you very much Mike for joining me today, I really appreciate your time. For those who are interested in learning more about you, where are some places they can go to learn more about what you’re up to.
Yes. Thanks Alex, it’s absolutely my pleasure. Love to talk about this stuff. If people want to chat more, I’m on Twitter and love hanging out in that FinTwit community so you can find me @mikeboyd and I’ve got a personal website as well, mikeboyd.com.au.
Perfect. Thank you very much, Mike.
You’re welcome. Thanks very much and all the best on the podcast.
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