Buyers and Builders
00:31:12 · Chris Rolls, Mikk
And if you look at that particular scenario and you talk to that referrer of the work, they're open to sending more referrals. It's just never something that never happens. So once you know your acquisition cost, if it's less than the profit that you generate and most importantly the cash you generate, well you can spend more on generating referrals in that case from that particular source. That's probably an unusual one but it does happen. But if you look at the prices up, cost down, sell more stuff to more people, the prices up and the cost down are the easier of those two levers to pull. [00:31:47] S0: That's interesting way of putting it. Because when it comes to salespeople, you can have them like for a low fixed income and then heavily like, result based, like commissions. So that doesn't really affect the business that much as I've seen the ones I've I've built. So it's interesting approach. You you mentioned this.
00:31:47 · Mikk, Chris Rolls
[00:31:47] S0: That's interesting way of putting it. Because when it comes to salespeople, you can have them like for a low fixed income and then heavily like, result based, like commissions. So that doesn't really affect the business that much as I've seen the ones I've I've built. So it's interesting approach. You you mentioned this. [00:32:08] S1: Yeah. It is. I think, though, that you're right, you can have people on lower fixed basis but the reality is that good sales people know their worth. Sure, certainly some of their remuneration can be commission based but you've still got that risk, you're carrying the risk. And depending on the sales cycle, you look at some industries where it might take six or twelve months to close a sale. And now in those scenarios, you put a new salesperson on and they start to build a pipeline, you won't get any sales for six or twelve months. So you're carrying that base cost for six or twelve months. And of course, the problem with people is they can up and leave whenever whenever they like. So, you know, I'm not saying it's not a a good strategy, but it is a more risky strategy than than some other strategies to to improve profits and and cash.
00:32:08 · Chris Rolls, Mikk
[00:32:08] S1: Yeah. It is. I think, though, that you're right, you can have people on lower fixed basis but the reality is that good sales people know their worth. Sure, certainly some of their remuneration can be commission based but you've still got that risk, you're carrying the risk. And depending on the sales cycle, you look at some industries where it might take six or twelve months to close a sale. And now in those scenarios, you put a new salesperson on and they start to build a pipeline, you won't get any sales for six or twelve months. So you're carrying that base cost for six or twelve months. And of course, the problem with people is they can up and leave whenever whenever they like. So, you know, I'm not saying it's not a a good strategy, but it is a more risky strategy than than some other strategies to to improve profits and and cash. [00:32:59] S0: Coming back to this role, which Shelley has head of innovation. What's Shelley's background, and when did you decided to hire her? Because I think every holdco should have a person like this because we dis... Discuss AI all the time, and it's impossible that... It's not impossible, but I've seen the top top people, and they've been doing this for some people since 2018, 2000 and even '17. They're very, very good at it. So if you start learning this today, Chris, it will take a lot of time. So it's sometimes better to just hire this person. So what's the story behind the hiring Shelley?
00:33:37 · Chris Rolls
[00:33:37] S1: It's an interesting one. Shelley was actually internally within PieLAB in our business development team. And her role was to get in touch with businesses, start the conversation around are they interested in... You know, have they sorted out succession? What are they thinking of? Are they gonna hand the business down their children? Are they gonna sell it? So that it increases our dual flow pipeline. And in Australia, unlike a lot of countries, we don't have much publicly available data. So you look at, you know, some of the Nordic regions in in Europe where irrespective of the size of the business, they have to lodge their accounts and and those accounts are publicly available. That doesn't happen here in Australia. A business has to be a very big business in order to be required to lodge their accounts with the government. So... And and on top of that, we don't have... We have, you know, pretty strict privacy rules. So it's actually really hard when you see it... Have a business name. You might have ABC Proprietary Limited Business or abc.com.au. You know, you're trying to work out, well, who owns that business and how big is that business and does it make any profit and how long have they been around. All of those questions are very hard to find out in Australia. And what Shelley, did over the last couple of years is she really went deep on AI. Now she doesn't have a computer science background or a data engine... A data science background or anything like that. She was just inquisitive, which by the way is one of our values. We are... We have four values and one of them is around being inquisitive. And she was exactly that. And she spent her own time outside of work really researching, understanding how you could use various AI tools. She taught herself to code in Python. She basically eliminated hundreds and hundreds of hours on data research to find out who businesses were. She created a suite of tools that we're able to take a spreadsheet of say 500 business names and URLs, put it into the tools that she's created and come out with perfectly cleansed data. Even down to the level of detail of, you know, when was company founded, who are the directors, where do they live, how many employees do they have. And she did all of that with AI. And then we noticed that, well, actually that information can be very useful.
00:36:01 · Chris Rolls, Mikk
All of our businesses are b to b. That information is pretty useful when it comes to helping the sales teams and other businesses. And so we started doing some work helping them cleanse data and find information for potential customers. And then she started using her skills to help our internal accounting team, reduce the amount of work that they were doing to automate certain processes. And we thought, you know what? Her skills are far more valuable helping everybody else across our portfolio implement artificial intelligence and automation than it is as a business development manager. So we moved her into the role. So we didn't recruit her externally. We... She she, I guess, grew up through the organization and she's doing a great job. It's been incredibly valuable. [00:36:49] S0: We need more people like Shelley. [00:36:51] S1: Absolutely. She's definitely a textbook case of what you can do if you put your mind to it. [00:36:57] S0: Now one thing is automation. What else have you improved when it comes to portcodes? And what has been the feedback from those CEOs of portfolio companies? Because not all of them are like Shelley who are willing to learn new stuff.
00:37:11 · Chris Rolls
[00:37:11] S1: No, they're not. Although, if you've got the right CEOs, then they should be reasonably entrepreneurial and be looking for ways of of doing things better. You know, when it comes to implementing things in our portfolio companies for clarity, our business is run-in in a decentralized manner. So ultimately, the CEO is responsible for what they do. They call the shots. Their job is to generate profits and send us the cash. And so, you know, we largely leave them to do that, but we provide them with the opportunity to get help if they want it from people like Shelley. And so some of them run these programs internally, some of them don't. Some of our businesses are in the technology space. So, you know, those those businesses are often more advanced, you know, when it comes to take up of new technology than some of our others. But it really sort of it it it really depends like the use cases of a a very, you know, wide and and varied. I talked about the the invoicing one that we did in our exercise physiology business. You know, I'll tell you what we have done, which is just... It sounds so basic, but, you know, a deep deep dive courses around how to use AI. And that might sound simple for a lot of people who are, I guess, you know, open to the use of new technology. But if you think about some of these businesses, you might take a business like, say, our strata management business that has 50 or 60 people in it. They've been in the strata management industry most of their lives. It's not an industry that embraces technology. Just showing them how they can, you know, use, for example, artificial intelligence to decode strata management laws. So there's an entire, you know, government act around all of the laws that they have to abide by. It's hundreds of pages long, and it's not always clear how they should act in certain circumstances. And what they used to be doing was getting the act out and scrolling through pages and pages of PDFs trying to find certain sections that says, okay, in this case, here's what you need to do with the act. Now, of course, with AI, you can do that in a fraction of a second if they were using it. But if they're not using it, of course, they don't get the benefit. And so sometimes it's just running them through, did you know about tools like Notebook LM?