Startup secrets with Troy Westley –
“Don’t be scared to make mistakes”
Last years Talent Unleashed winner, CareMonkey CEO Troy Westley, spoke at this years awards on what it takes to turn an idea into a multinational company.
The failures, the successes and everything in between were discussed in his speech:
Tonight I’m going to speak about my journey starting CareMonkey and share some of my insights and some of my mistakes, and I’ve made thousands of them along the way. When I listen to a presentation, I hope to get at least one gold nugget of information, so my goal for all of the founders out there is to give you at least one nugget.
To set the scene let me explain who I am and what CareMonkey is.
First, my name is Troy, I’m 48 years old, I have 7 children, I’ve had 7 wives…sorry bad joke.
I’m the CEO of CareMonkey, we have an electronic health and safety system used by schools, sporting clubs, businesses, scouts, camps, the disability sector and lots of other groups who have a duty of care. We have customers in Australia, NZ, UK, USA, Phillipines…even Kazakhstan.
As an example, here in Victoria, 25% of all Catholic schools use the system. It automates the collection of medical and emergency details from the parents so they don’t have to fill in forms all the time. It automates permission forms for the school so they don’t have to manually chase parents, and it makes the medical and emergency data available to the right teachers on mobile devices so they have instant access to the students they are responsible for and know what to do, who to call or what to tell an ambulance paramedic in an emergency.
I had the idea for CareMonkey in 2011 and now we have 27 employees, are cash flow positive and we’ve won numerous awards including Talent Unleashed. So here’s the story so far…
I finished my computing degree in 1989 and started my IT career the following year as a programmer for Oracle. Within a year I was moved into a technical pre-sales role working with the sales teams to sell Oracle products and two years later I switched to the dark side and became a software sales person.
If you’re good at it, enterprise software sales is a great job and lucrative. I had 8 fantastic years at Oracle. In 2003 I was the first local hire for salesforce.com in Asia Pacific and was their VP Sales for ANZ. I also had a stint at Google after Salesforce.
But when I hit my forties, I started getting really itchy feet, and I had a very strong desire to use all the knowledge I’d gained to create my own company. Every day for 2 years I’d stand in the shower until the hot water ran out trying to come up with a good idea, and I came up with plenty of ideas. The acid test was would I quit my job and go for it knowing I had 9 mouths to feed – and unfortunately the ideas weren’t good enough.
Then one day I reached into my filing cabinet at home and by mistake I pulled out the asthma plan of one of our boys….. It described his symptoms at the top and how to save his life if he couldn’t breath, it was very important information.
I was horrified that this life saving document was in the filing cabinet – totally useless. Why wasn’t it easy to share sensitive live saving information?
It was so easy to post photos on Facebook, tweet on Twitter, and connect on Linkedin.
That’s what gave me the idea to create a social care network where you could share sensitive details with people you trust.
So I quit my job and took up a 6 month contract working 3 days a week in a friend’s business – so I could get my idea off the ground and still pay the bills – but at end of 6 months I’d got nothing done with CareMonkey at all and decided I needed to have the courage, burn all bridges and commit.
I left paid employment completely and bought a wireframing tool for $7 and started designing what the system should do. In about a week it looked pretty good. But I spent about 3 months wasting time on fonts and colours and where things should be on the screen. All that got blown away anyway – I would have been much better spending my time validating if I had an idea that people would need and want to buy.
I then went about building the first version of CareMonkey by outsourcing development to a company overseas where the costs were lower. This first version would enable a family to create what we call ‘care profiles’ for family members containing emergency and medical contacts, allergies, asthma plans, medical conditions, medications and so on. Families would then be able to share these profiles securely with other family members and trusted carers like baby sitters. It would be the Facebook of health and safety.
I spent every day for more than 6 months testing and being a quality assurance person finding and documenting bugs. It almost killed me and I was never sure whether the code was any good because there was nobody on my side to check it. Nobody cared about the quality of the system as much as me, so I needed a tech cofounder since my skills were no longer relevant and I didn’t want to get back into coding.
If you’re going solo trying to build something, my advice is it is too hard and too risky, and further, if you eventually want to seek funding that most providers of capital won’t invest in a team of one.
After going live I got support from organisations like Asthma Australia, who loved the idea of electronic sharing of asthma plans, but it didn’t generate any revenue for my business.
Getting this part of CareMonkey up and running was hard and I hadn’t even started the part of the system that would enable a school or another group to collect care profiles from families and keep their school medical database up to date. This was also the part of the system I could monetise. I really needed a business partner to join me in the company.
I worried though, that after 18 months of effort, and making some progress, how could I share the equity in my company. There are so many stories of partnerships that go wrong. 3 guys get together, ⅓ equity each. Down the track someone loses interest or has to take another job, the other partners aren’t happy and so on.
But I found a solution to this problem in a short book called ’Slicing Pie’ by Mike Moyer. It’s a model to dynamically share equity based on the ingredients you put into the pie. Those ingredients are variable and include the amount of time and cash you contribute. Also the value of IP you contribute.
So when I met my co-founder, Martin Howell, I was able to say to him ‘please read this book’ because this is the way I want to share equity in the company. Marty read it and agreed what a fair model it is. It allows you to bring others in to add to the pie, it allows people to leave the business and still have their ingredients recognised. So when I was on holiday not contributing time, my share of the pie was getting smaller, when Marty had time off my share became larger. We used this model for about a year until we formalised shares in our company and we were both happy.
Image: CareMonkey Co-Founders Martin Howell (left) and Troy Westley (right)
So how did I find Marty? On a meetup.com site called co-founder speed-date. I didn’t go to the event but I looked at all the members online and found that he was looking for a business co-founder and that he was building group management software, and that was exactly the next thing I needed for CareMonkey.
I didn’t realise at the time that Marty had already been very successful with startups already – he was the tech co-founder of realestate.com.au. We talked about how we could work together, shook hands and got to work. He then had one look at my code and said it was some of the worst he’d ever seen and that he’d need to rewrite all of it.
I resisted though. I said let’s sticky tape the two systems together so your group management system can collect the data from my care profile system, then we’ll see if a school wants to buy it and if they do we can rebuild it later.
So in October 2013 I demonstrated CareMonkey to a school principal and two school admins. They loved it. I made up a price, closed the deal on the spot and on the way out I called Martin and said ‘mate, we’re in business, somebody bought the system – we better sign up for an accounting package and work out how to send an invoice’!
From time to time I mentor new startups and I’ll see 2 or 3 co-founders looking for advice. The common problem I see is that they are all tech and no sales. In my mind you’re not in business unless you earn revenue and unless you’re one of those freaky businesses where products sell themselves someone has to go out and sell to get your install base going. So if you don’t have sales skills in your team you really need to go and get them even if your plan is to sell via another channel. It’s unlikely a channel will take you on unless you’ve proven customers will pay to use your system.
By Christmas 2013 we had about a dozen school customers and about 4,000 parents using the system and what happened over the January holidays was awesome. We started getting leads from those parents saying they were the president of the football club, secretary of the swimming club and so on and that they wanted to use CareMonkey too. So we started selling to clubs, then scouts, church and youth groups, camps and businesses…the system was starting to spread organically. Right now, in 2016, we’re in good shape with lots of customers and enough revenue to be cashflow positive.
Because we were and still are self funded, we didn’t have a marketing budget so while Marty was busy rewriting my code, I was selling CareMonkey directly and entering competitions to raise awareness. Along the way we’ve won iAwards, we won Australia’s best startup idea, the $50,000 IT Invention Test, and of course Talent Unleashed. I’m a massive fan of competitions and awards not only because of the credibility it adds to our website, but because it helps you get really good at pitching your product. I’d encourage all founders to enter pitching competitions whenever they can. You learn what works and then you can smash out a good pitch whenever you need it, in a sales environment, when hiring employees, speaking with investors or media and so on.
As well as Talent Unleashed, last year in March I won the Slush pitching competition in Melbourne and the prize was a trip to Helsinki last November to compete in a world wide startup pitching event. 1000 startups applied to that and 100 were selected to pitch including CareMonkey. It was a great opportunity to present our system in Europe and potentially find new customers and partners. At the end of the first day we were in the final 20 and pitched again the following morning to another group of investors. Then we got down to the last 4 and that evening I pitched in front of 7000 people and won 650,000 euros, about $1 million.
What did we do with that money? Nothing. We didn’t take any of it. It came in the form of an investment opportunity in our business and we didn’t think the investors would offer any value in the development of CareMonkey apart from providing cash – I’ve made lots of mistakes but I don’t think that was one of them…and if nothing else we got a lot of great press about the Aussie startup that knocked back $1 million.
This year we’re consolidating our position in Australia but the main focus for me is growing the business in USA and UK and I’m doing that through the help of partners who are already selling to the customers we want to sell to.
I can’t tell you how much credibility it adds to our story when potential partners and customers go to our site. They see quotes from Steve Wozniak and Richard Branson talking about CareMonkey, they see a picture of Sir Richard with me at the Talent Unleashed Awards…I get to tell them the story of when I went to Necker Island and had dinner with Richard at his home. They love it!
By the way it was an incredible experience to spend 4 days on Necker Island. I’m very grateful for the opportunity. I met some amazing people such as Jane Tewson, who’s here tonight, Jane and her Igniting Change team put on an inspiring conference and I’d recommend to all of you to check that out and put it on your bucket list.
So to wrap it up, to all the finalists here tonight, I hope you’ve got one nugget from the CareMonkey story and I hope you leverage the hell out of this achievement. Congratulations to you for making it this far and, good luck!