Nick Telson: How I scaled DesignMyNight into a money printing machine!

HM Ep.18

Apologies for the typos, this is an AI transcription

HM Ep 18

Jay Radia: Today's topic is about exiting your company and also finding your passion.

And basically he scaled that business from literally zero to a large exit, which we'll be talking about. Um, he's also invested in nearly 50 different startups, companies that we've all heard of. At the same time, he also creates his own companies and has own podcasts.

Plus we also talk about how Nick's sale almost fell through in the last couple of hours of the exit.

It's a place called Benny's Burritos, and they do really strong frozen margaritas. So we don't really remember like who came up with the idea or. How it formulated. But for that night out, we saw a website that was promoted around drinks offers, which is bigger in America than it is here. Yeah, we've got happy hours and we were just like, Oh, wouldn't it be good to do something like that in London?

Uh, and that's how the seed came should. That's so

I just went to a be a few weeks weekends ago cuz I'm mourning the loss of like my mid twenties . Yeah. So I'm like, you did, I wanna go and have that fun now. Uh, cuz I, Yeah, we would just head down. Didn't go. Uh, the team were going out on reviews and stuff, but not us two.

Right. You guys ran it so well for 10 years. It felt like it was a very tough journey. Mm-hmm. like could you have done it? When you refer back, how could you have been maybe happier in that journey? Cuz I know you were saying it was really hard on me, Jay.

We didn't hire like superstars cuz we couldn't afford those salaries. So we hired Junior and uh, built them up in the company. Worked very hard on growing them in our mold, which works amazingly cuz then all of our managers had been working with us for years. I think the biggest mistake we made, which would've made us happier, was we were so.

Until the end and our acquirers' access, It's one of the things they said when they acquired us, they were like, Wow, Like you've got a hundred, 120 people and you, you guys are just so involved in everything. Like as, as a negative. They were like, This is not good because you're not gonna be in this business forever.

So the next two years on our earn out, you guys need to like untangle yourself. From the weeds of, of everything. And that was distress. So, you know, we were still looking at customer complaints on the SAS side and the B2C side. We were essentially the project manage, uh, the product managers. And we had three SAS products.

Um, we were managing the team. We didn't have hr. So, you know, with a hundred, 120 people every day there's something. Wow. No hr. No hr. No hr, all it's.

One of them was the head of entrepreneurship at London Business School. Oh right. So he was a big help. Are those guys any

And then we, we met in the wake up guys. Yeah. Like, what are you doing? And we were, man, we were young, but we, I'd worked at L'Oreal. Straight out of uni. Uh, and, and I worked my way up to marketing manager quite quickly there. Right. So I had a team there. Andrew was Accenture, so, you know, he had to sort of know how to conduct himself.

Gotcha. Yeah. Um, so I, I, you know, I think we could have. Been a lot better, but I think we just went in with just respect we part of the team. We almost wanted to be everyone's big brother, which I think was part of the problem, but we were just like, Look, we're there for you. We wanna help you grow. You can tell us anything.

Um, let, let's see what happens. That was sort of our mantra. Yeah. I've

It's pretty cool. Like what was that

Where I'd go, I'd be like, Uh, why don't you look at that site I built? Yeah. And look, when we sold it, it was one in six Londoners a month we're using it, which is crazy. What one in six? Londoners. That's incredible. That's. Be, it became a big, big site. It's still very popular now. Yeah, it's still super popular.

Yeah. From what I get, I'm not involved in it at all now, but yeah. Uh, you know, obviously post covid, it's, it's sort of come back again. Yeah. Um, it was SEO so the beauty of SEO is it sort of never goes away. Yeah. Yeah. So actually the traffic's just constant.

Or we can just, we can

Yeah. And then that created our flywheel with the b2c, creating a viable big business just as a discovery platform that time out. I've tried to figure out. Yeah, it's just not possible. So yeah, you just become this content platform, which just becomes really hard to monetize. Um, so we saw, yeah, like three or four make a lot of noise.

You know, they were the cool kids on the block. We just kept our head down. We were like, We just know they won't last. Yeah. And we became sort of like, The big ugly brother. Um, we weren't, you know, we weren't even trying to be cool, but we were like, we just know we've covered the whole market discipline.

Right. It was just

We know what we need to do. This business is working. It can be extremely profitable. Let's just

Right. It feels like you on the same journey. It was just about head down executing. And I'm curious actually, why didn't time out by you guys couldn't afford

Cause I know we've had chats about it, but Yeah. Why don't you tell us a bit more about like, the experience

So you had a magic number. Had a magic number. Luckily we were both pretty aligned on that. And we just looked at similar multiples in the industry. Um, we were, we were running at like 48% EBITDA margin as well. Oh. So, wow. We were sort of spitting out cash at that stage. That's like a slot machine, a cash machine, atm,

What, what were the nu what was your revenue of that? Uh, we were doing around God, what we were doing, we were doing about, when we sold it, about four, 5 million.

Yeah. So yeah, the software for us, not only was it the recurring revenue that was very scalable, and especially in the uk you've got a lot of groups mm-hmm. . So, you know, you could sign up a Young's pubs Yeah. You know, that's a hundred grand contract. Yeah. And you know, so there was quite a lot of almost enterprise contracts in hospitality.

Uh, so we knew we just had to sort of nail a couple of groups a year plus just sign up loads of smaller ones. So we, we could model design by. Pretty accurately, like it's quite crazy how we forecasted it pretty close. And then we engaged a broker. We spent probably about four months with them doing the Im, It was quite a complicated business.

So the, the booking software was a SAT screen. It's quite big memo then investment memo was quite a big one. Yeah, it was a big one. And because you had design by nights. To the B2C army. Had to explain how that worked and the revenue levers there. We had a booking software, which was just monthly SaaS.

Mm-hmm. . We had a ticketing software, which was a clip on the ticket, and then we had a Vouchering software, which was a percentage fee. So we had all these different revenue models. All growing at different sizes, all at different stages. So trying to get that across in an IM was quite difficult. So, So our broker had to work really closely with us, sort of remodeled the business with us, really understood it, and yeah, went back and forth on the IM for ages.

Got it. Done. Yeah, it's probably about a hundred. Slides in there. Wow.

Right. Um, and we got some nibbles, but nothing concrete. And then he said, Okay, let's, let's, let's do the, the proper, um, Funding now the, the round and go out and spoke to all of our compe, you know, booking.com, OpenTable, TripAdvisor, Eventbrite, et cetera. And we had about three concrete authors on the table.

Oh, excellent. Um, and obviously that process is long. Yeah. So they see the, and they hit your magic. They went over the magic number. Oh wow. Which is good. Uh, we actually rejected our acquirers bid three times and then they came back and said, Look, this is the final bid. Take it or leave it. And it was funny cuz there was too much bigger players who were interested.

One American, one, Japanese actually. And our broker said to us, Look, a deal can fall through at any time. This offer from access, like we know them, they're sort of acquiring monsters, like they will get it done quickly. They won't do lots of. They've got the cash, they're offering more than you want. So do you wanna get greedy and wait for the, the two other players who might offer you quite significantly more, but it might fall through at any time.

So he sort of grounded asked them as like, Look, this is more than you want and the deal will get done quickly. It was a favorable earnout as well. So just take the deal. So the deal got done pretty quickly. Um, Got it done in about four weeks from accepting the offer. It nearly fell through on the last day.

What? Yeah, we were meant to sign at 8:00 AM 9:00 AM and we signed at about six 7:00 PM Um, What, what happened? There was a new EU. Financial regulation that came out. God, Classic government, Classic. Um, and our lawyer phone us out that morning. Uh, I literally remember where I was, sat in my flat when I took that call and he was like, This is in your small flat, right?

This is before the upgrade. Very small flat in Stoke Newington. Um, and they were like, Have you heard of P P D pt, D S P, PTSD or whatever? I don't even know what it's called. I blanked it out. Um, And we were like, No. He was like, Okay, well the acquirers wanna know how you're gonna deal with it. And we were like, Well, we don't even know what it is.

So Stripe handled all our payments at that time, and we were putting hundreds of millions of pounds through Stripe and we were one of their first big customers. So we, they looked after us really well, and yeah, we spoke to our account manager. And he was like, we couldn't tell him we were getting acquired either.

So we were like, Look, we need to get you on a call. This is important,

I'll tell you that . And yeah, he did it. They asked him questions, he replied, put the phone down, didn't hear anything for a few hours, and then the, our lawyer phoned us and said, Okay, it's go time. So can you get to their lawyer's office in the city? And then they had a whole floor for us, which was quite cool.

Like we were in one room. The acquirer's in the other, the lawyers were still Oh, is that the movie scenes? It was pretty cool. Yeah. But the lawyers were still going at each other, so we were like, how is this not done yet? Like, so they were still, they to make some more money,

And obviously in a payout you're not gonna get all the money. So how long did it take until, cause you had, it's probably what, two months? How long is, until the money was wired after signing the deal?

But we had to go back on Monday and do our, our earn out for two years. So actually Andrew and I was sort of elated, but at the same time like, Oh, we need, we're back in the office on Monday to go. So I don't think it really hit us until the end of the actual burnout that we were like fully. So

So everything we were looking to build or invest in, or hire, Mm. Only things that were gonna drive revenue. Gotcha. Um, fortunately for us, um, we integrated with, um, Google bookings, ah, that year and I'd be on them for years. So when you Google a restaurant, it just says book now. Yeah. That was just an apps I cannot tell you.

Like we, so we were doing, I dunno, hundreds of thousands of bookings a year through design by. The first night, so we turned it on at night cuz we were like, well let's just see if it works and doesn't break. Mm. So we, I was up, my CTO was up, Andrew was up, I think that night they did something like 5,000 booking

Wow. Like on change the game. We, and we had to sort of be like, Well shit, because we charge per cover for our, our bars and restaurants, suddenly their bill's gonna be like Yeah, 500 pounds a month to like five grand a month. Yeah. Yeah. So we just had to just think, okay, let's even, let's just reduce that by 80%.

Yeah. Can we slip it in and just slip it in cuz that will get us to our target. Um, rather than them saying, No, I don't wanna take booking suit anymore. Yeah, totally. So it. Too good. And I think Google are gonna own that space. So I, I think in the next five years you won't really have discovery sites. I think it will all be done by Google.

So I think they're gonna own that space. So fast forward

You're now free, right? Mm-hmm. , you're free. You've, um, your bank's looking really healthy. You've got your calendar's now empty technically because you don't have anything. So like in that period, like what were the things. That you decided like, these are the things I want to focus on in this next chapter of my life.

Like, and how'd you like? What was that journey

Started it, designed my night, 10 years nonstop. Succeeded. And I'd never thought on that journey, like what do I actually want in life? Like the whole like icky guy, purpose, happiness. I just thought I was happy and I was happy, but you know, I was just going from day to day trying to win basically. So when you like wake up that day and you're like, I could technically do nothing for the rest of my life and be fine financially.

It was really tough. It was the first sort of depression I felt for like a good week where I was just, I was just really struggled to motivate myself, just asking myself deep questions that maybe I shouldn't have put off. But I was like, Well, what does make me happy? Like, what do I wanna do day to day?

Like, what does bring me purpose? Um, so just sort of reflecting for the first time. On those sort of questions, which I never had done cause I was so business minded. So yeah, that was a really, really tough week.

Right? Yeah. So that's that balance, right? Yeah. So I'm assuming those messages came and like what then did you do then? So what.

Yeah. Through a window. I'm actually. Believe it or not, quite an insular person. So I actually thrived in Covid. Um, I, I'm more than happy to sort of be a hermit. Um, so the guy

Let's just do it now. Mm. Um, which was for us accelerating our angel investing, setting up Horse Bay ventures. Um, we wanted to do a sort of studio model and idea on businesses and build those and build brands. I had my podcast, which you, I could still do during lockdown remotely, so it was sort of throwing myself into those different areas.

But the things we were thinking about when I say we in. And it's not my other half, but me and Andrew, my business, other half, we were like, Well, what do we love doing? And, and actually we love building businesses. Like I, I get a thrill out of building brands and marketing and selling it and revenue coming in.

Um, what didn't we like was building a team, managing a team, managing an office, managing them. Crap that comes with that every day. So we were like, well, you know, if we can do an almost like studio model where we can build the brand, ideate it, throw it out there, bring in a CEO to actually run the day to day and we can do the stuff we like, marketing, brand, product, then that's sort the best of both worlds.

So yeah, we just had a lot of fun throwing around ideas. Trying to see ones that stick and, yeah, Lucky we had a couple, and then we just started building those out during lockdown. I, I wanna ask you two

You can just really hash it out. And the other thing is, um, during that period of depression, low mood or lack of clarity of the the future, I, I wonder how you sort of like whiteboarded that and, and how you actually sort of came to determine what your purpose is. Or maybe it's like an ever flowing, you know, process where your purpose changes from year to year.

Um, so why don't we start off with the, the first one? The

Yeah. Everything. She was like, Everything you spend, even

And then there was a section for like, what big things have you got coming? So you're gonna have a wedding, Do you need to buy a car? Um, all, all things like that. Mm. So a, it makes you think like holistic, Okay, well what do I want and what is a great lifestyle? Um, and putting in property and all of that. Um, and literally summing that all up, uh, within reason.

And then what she did was plotted that from my net wealth and just put that into a chart and was like, Okay, if you're never gonna earn any money, again, this is when it runs out or it doesn't run. So great. Andrew has three kids. Um, so his runs out way quicker. runs out. Um, so and, and then, and then we started putting in, and then she was like, Okay, you know, let's look at diversifying.

Like if you're gonna diversify, are you gonna buy some property? Yes. Okay, let's put some sample property in and see how much money that makes. That's really detail and just like plotting. It was a great exercise. Yeah. What your net wealth looks like. And look, Andrew and I both knew that that wasn't gonna be it anyway.

So even if it never ran out, Andrew and I knew, Well, we were confident in our angel investing. We were confident that we were gonna go again and build something bigger anyway, so we just charted back from that lifestyle. And it did get to actually a similar-ish. Um, That's epic. Which was quite lucky. What, what was their number?

I've never really said how much I took, but let's just say we were like, if we can get anywhere between sort of six and nine. Okay. That's enough to live a love. It's quite the common number, right?

Mm-hmm. . And that will become your income. You wanna buy property, which is gonna be x million. Mm. And you might also wanna have some play money for your investing. And then some you just wanna hide underneath the sofa, right? Yeah. So ten's the classic number that, um,

Yeah. And then never chase money. Yeah. I know that the lifestyle I've got now, I could die happy living. If I can make more and do some really cool stuff with it and, and help family and friends, uh, more than I have done then that's also awesome. Yeah. Um, but I think. A really important mindset not to get in, because then you'll just never be happy if you're just chasing what's, what's about.

Yeah. If you can't

Yeah. It's something I, I feel like I've sort of already figured out myself in terms of I'm fairly frugal and all the rest of it. Mm-hmm. , but I think, you know, it's something to do before you sort of reach those, those goals. So what was that like

Yeah. So I think whenever I'm feeling a bit stressed or anxious, that's how I deal with it. So I have conversations with my, it's quite friendly dialogue. Are you quite aggressive with

So is it like, how's that

Uhhuh. So, Well, I do write a lot. I don't journal or anything, but I write, I've got a notebook with me most of the time and I, I, I like writing down notes rather than on my phone. So I'm, I'm always writing down stuff like ideas, things to do something that pops into my head, but then I do that with my thoughts as well.

Cause I feel like if you just keep it in your head and you're talking to yourself in your. You're not really dealing with it. Yeah, exactly. I totally agree. So I'm like, if I can actually just have a conversation with myself out loud, where even on a walk or in the garden or whatever, it's a good way to, to get my thoughts and feelings out.

So I was doing that a lot. Um, and, and I was just looking at areas like what brings me excitement? What, what would get me out of bed in the morning? Um, what would help me bring joy day to day to my life and to my, like friends and family? How can I help others? So I was like trying to just deal with all these different themes, but at the same time, not I'm, I'm a big believer in not overthinking stuff.

Mm. And I see this in the founder community a lot, and there's a lot of talk around mental health, which is great. Yeah. And we never had that when I started, and it was really important to recognize mental health. But they've almost created their own bubble of. Fuck, this is really difficult. Yeah. Yeah. And then if you just stay in that echo chamber of talking about bad mental health Yeah.

You almost talk yourself into having bad mental health. I think. Um, yeah. It's so funny.

Mm-hmm . Cause they were just this hustle. They believe in themselves and like obviously you're mirror in that. Whereas like there's sometimes this new newer cohort, they're just not that hustle vibe or that drive to execute. There's just missing.

It comes down to you are going to have to work your ass off to succeed. It's just a fact. Like you can't, you can't get around

Um, I'm saying no to a lot more things. And when I am working, because I'm not managing the team, I'm, I can be a lot more effective. So now I, I don't book any meetings before half 10, 11. That's me time, So I'll You do good time. Then we had a chat about a few things. I think we a lot

You like voice notes. Like, they're like, Can I hop on a 20 minute call? I'm like, No, no, I don. See blocks in my diary when I open up my diary. It's not gonna be a 20 minute call either, so why don't you send me a voice note and I'll get back to you when I can and I will get back to you. And then it's, yeah, just, just booking out chunks of my day.

To be really purposeful. And so far with all the different things I'm juggling, I'm like really busy but not stressed and that feels quite good. Yeah. Are you doing less hours of

We both have our fund, we invest, we involve in companies, we have our podcast, and we're both very, very similar. Yeah. And I actually find now. In this new phase of my life, I'm getting even more opportunities, more people coming to me like, so people think, Oh, I made my money, or you know, I've now done my success.

I can chill and relax. But actually the intensity of people come, it's like three, five x more. Yeah. I'm sure you notice that

But I thrive on being busy. So like, I actually enjoy being busy, but I wanna be being busy on my own terms. Yeah, yeah. And not stressed, busy. I allow myself to make that conscious effort where I think before it designed my night, it was just, you never even stopped to think. But yeah, I think it, it is, it's not taking on too much.

So like we've got trumpet, we ideated on another one that we're gonna be a lot less involved in. Well, let's talk about trumpet

first.

I think on average it's 80 emails to close a whole deal. Um, So, and we were like, It just hasn't been digitized. There's not, there's nothing there at all. So I don't think I've, I've said this before, but the idea was originally called Loop and it was for pitch decks. So what they are, they're basically personalized microsites, so no code microsites that you can create.

A beautiful looking per hyper personalized microsite in minutes without any design. So almost like a, a can for sales people. Yeah. Gotcha. And then you can interact with your buyer in the micro site to get the deal done. It's all centralized. Uh, it's all got notifications running through it. It's integrated to your whole sales stack.

But the original idea was, well, sales decks for investment are crap PDFs, you know, for something where you're meant to be like showing off your vision. Yeah. Uh, it's a very. 30 year old tool to to use. So we were like, ah, maybe we could do these micro sites and then you could update your investors in the micro sites every, every month as well.

But then we were just like, Oh, the market probably isn't as big as you'd think it is. You know, when you're in the founder bubble. You think there's loads of startups, bit in the ground screen and think there's not. And then we thought sales, which is obviously a huge, huge space. Um, so that's when we pivoted it to trumpet and the, the sales area.

But Andrew and I said, if we're gonna do another business, it has to be product led growth. Mm-hmm. , it has to be instantly global, instantly scalable and self-serve. Um, Oh, interesting. So those are sort of the tick boxes we want wanted, whereas design by night, Very heavy. It was content. It was three sass.

Hospitality is a pain in the ass. It wasn't very instantly scalable at all. And then when we pivoted the idea from Loop to Trumpet, it was, Yeah. And we were like, Wow, okay. This, this has huge potential. Yeah. That makes so much

Cause I normally go for a class. My methods, normally I get two syllables. Yeah. I combine the, a screen loop. If I was of a, I was very young, I was wearing this by before I was the man and I like the word yield forever. Ahi. Yeah. Yeah. But any whos um,

I think Spotify was after me. So kinda claim that one. Cause. Own trumpet.com, the domain, but you did like get trumpet.com and when you register it, what's the name of the company then? And also now you've got this word trumpet, which you're never gonna win on the seo. Yeah. Like, so yeah.

We wanted to bring a B2C brand element to a B2B brand. Mm-hmm. . So we looked at a lot of B2B brands that we all use and love, but they're all quite boring. The brands are quite dull. So we were like, we really wanted like a fun brand that we could be cheeky with. We were Googling like loud things. Because we were like, the idea of trumpet is you make noise in your prospects inbox, or they're LinkedIn, you know, or you are blowing your own trumpet.

You're making the idea is like, yeah. Making noise. I, I love the idea of

Oh

Oh, you get the cheeky side. It's funny. We do like a lot of that and it, and yeah, it is really resonating. Luckily at the moment, like the, the brand itself is getting recognition, you know, like we made these t-shirts and when we started onboarding everyone slowly and had some like really key users, we sent out the t-shirts with a personalized note.

And I, people have just been posting about it like it's a BT brand, like all over LinkedIn. So yeah, hopefully like that sort of B to C. Brand element Yeah. Is, is starting to filter out and and we need to keep going on that. Yeah. So like when we will be hiring ahead of marketing soon and it's not just gonna be a B2B remit, it's like how can we keep that flare going?

Yeah, yeah, yeah.

And so yeah, I've got my core university group. I've got, uh, three or four friends still from school, um, that we are still super tight and, you know, they're the so important to me that I think when we go out for dinner, it, I, it's the most natural I ever feel and I, to be honest, I thought that that was my lot and I was happy with that.

But I think especially since exiting, I've met people, you know, like yourself and sort of other founders, maybe not successful as yourself, but on the journey that maybe have asked my help, but I've just like clicked with it starts as a different relationship. Um, and, and I do love talking about business and investing and stuff.

So actually when I go out with them for drinks or whatever, Yes, we delve, you know, we go into the more personal stuff, but we're also talking about business a lot. But I actually really thrive off that. Mm. And I actually really enjoy that cuz with sort of my uni and school friends, it's more of just like, Oh, how's trumpet going?

But not knowing like, yeah, the underneath. And I love quizzing them on like what they're up to. What can I learn from them? And you know, digging into what they're up to. So it's sort of a different friendship, but then some of those have evolved. You know, I cast them as good friends. Now that is an important part of, of the happiness part is, um, finding people that you can bounce off with in different aspects of your life.

Yeah.

I'd call myself spiritual, not religious at all, but spiritual. Yes. Um, I question things a lot, but I don't actually delve deep in a reading or podcast point of view on, on like self-help stuff rightly or wrongly. It. Rocket science to know if you are truly happy or. And I don't think it's rocket science to find out what makes you happy.

I think you just need to question that. Yeah. And that's what I never did in my design, my night days. So I feel like if I go, you know, for me I know it's about finding peace and I like, I like my loan time as well, so it's like where can I find that peace and tranquility? Where can I look after my. Um, where can I spend time with my friends and loved ones?

And I, and for me, that's as deep as it needs to get, but it's just making sure I, I take the time to do all of those things. Yeah.

Yeah. And so it's almost like you skipped that sort of process, but there you've gone right to the answer. Yeah. By just listening to yourself and figuring.

I think everyone needs love in their life, wherever that comes from. Um, and everyone needs purpose in their life. So I think. If you just question yourself, How do I get those three things? And it is constantly evolving, of course, then I feel like that puts you on quite a good and look, you've also then gotta accept that life is shit,

Life is hard, what's life is hard. Like you're not always gonna be happy. You're not always gonna be content, You're not always gonna be not stressed, like shit does happen in life, no matter whether you are rich or not, or successful or not. So I think it's just accepting that as well. And then just being able to like bounce back when that shit happens as well.

Yeah, totally.

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