Pioneering founder who is unlocking the full potential of the multi-billion pound digital jewellery industry
Podcast transcription - 31st October 2018
Alan Cowley: Welcome to another Invested Investor. This week we're with Dominic Hill. Dominic has a background in jewellery that you'll hear more about in the podcast, currently is CEO of Atelier Technology. So I'll just leave it over to him. Let's hear your background please, Dominic.
Dominic Hill: Sure. Firstly, thanks very much for having me on the Invested Investor. I think it's a great idea.
My background is almost exclusively in the jewellery industry professionally speaking. I came into the industry in 1998, so at the age of 18, by chance. And I worked my way up through a large privately owned wholesale company starting in actually wiring up the desks and then packing jewellery and then doing some grunt administration. At the time, we had telex machines and fax machines and lots of data transcribing. And then I got an opportunity on sales and then did well and eventually, to cut a long story short, I made commercial director by the age of 27 and had a pretty successful period of three or four years there despite very challenging market conditions in 2008 to 2012, just that period.
And the opportunity that really opened the door for me to move into software was the vacuum that opened above me in the company when the managing director left because they'd lost their biggest client overnight. And this was a £60 million client in a £90 million business. So it was terminal pretty much. And then it was 2008 as well, so it was the worst possible time. My remit coming in was, "You need to expand the number of customers we're working with, and we need you to fire half of the company." And I knew the company. I'd been in the company for many, many years. So I knew what I was dealing with. I had advantages from that side of things.
But what became clear to me was that the only way that we could do this was by centralising resource. I had a great merchandiser on one account. I had a great product developer in another area of the business. But these were all little umbrellas underneath a large umbrella, and everybody was running on Excel. And you'd have one great Excel spreadsheet built by somebody on one side of the business that was particular to serving Argos, and then you had another one on the other side of the building that was specific to serving QVC or what have you. And there was no centralisation of any of this, and that was holding us back. I could see that we had bandwidth restrictions. So the only solution in terms of removing those was software. So I blindly jumped into software as a solution to our problem internally, and that effectively was the entry point for me into technology, into disruption, and ultimately brought me to where I am today.
Alan Cowley: So did you create the software in-house then, or when it was you transitioned into your entrepreneur ...?
Dominic Hill: No, no. We built it in-house. So I was fortunate that I had a smart IT guy, really overqualified for his job. He was intellectually unchallenged in that role that he was performing, and he was quite up for the project when I said to him, "Hey, I want to build our own piece of software. How do we do this cheap?" We didn't have any real understanding of how you should build software, right? And this is actually typical across certainly the jewellery industry. I can't really speak to other industries, but this is typical that you get these home-build software’s. They're trying to solve problems, and they just launch into building these software systems. And typically, at that point of time, we're talking about legacy local software. These are C#.net applications for the most part. They've been designed by an engineer. There's no such thing as UI or UX. You're literally just talking about a different era of software really, and we were part of that.
We used an early outsourced platform which today is called Upwork. At the time it was called oDesk. We connected with a couple of engineers in Romania, and in the end a couple of years later, we'd actually brought them over and made them full-time staff. It took us about three or four years to complete this project, but ultimately, we did it on a shoestring budget compared to an external consultancy that had been paid nearly about 100,000 I think when I started the project, and they hadn't even gotten to the point of breaking ground.
But that's a typical problem, which was jewellery companies did not attract top tech talent. If you're a smart engineer, you don't want to go and work for H. Samuel, right? You want to go work for Google or someone much more interesting. And yet, they harbour all of the domain expertise and understanding of a very complex industry. And that's not just me saying it's complex. I can actually prove at the database level that jewellery has extra layers of variants that other industries don't. I have to do that quite frequently actually, provide examples to investors of what do I mean by that, who are the companies, etc., etc.
So these companies are the natural harbour of that market intelligence, that business intelligence. So they're the only people who are really positioned to execute a solution, but they don't know what they're doing with software. We didn't know what we were doing with software. So they build sub-optimal products, and these products are almost always exclusive to the company because it's been built to solve a pressing need or a problem like bandwidth restriction like it was for me. Then extrapolate that out across an industry, and suddenly you've got everybody building software to solve efficiency problems internally. Then the next thing that immediately came to my mind as I finished the first three years of it was, "Well, why don't we just build a portal and then our vendors can just upload directly?" And then everybody thinks like that because it's just common logic. So now, you're in an industry where you've got lots of poorly-designed legacy software intrinsic to a single company that's then being farmed out across large supply chains, very fragmented, segmented supply chains.
Now, if you flip it and you're on the other side of that equation, you're some vendor company, you've got to learn a different piece of software for every different client you work with because they want to exert their influence over you to get you to do the basic administration. You've got a huge problem there, right? It's N multiplied by M, and everybody's got that horrible problem. And if you just put a single piece of neutral software in the middle, then it becomes N plus M.
Alan Cowley: Can you just give listeners - I didn't know this beforehand, before we chatted the first time - kind of an idea of the size of the jewellery market because you're saying this is companies that haven't thought about this really in the past before the last few years, bringing the portal, bringing everything together, and this is a huge market, isn't it?
Dominic Hill: Yeah. I would say that people have been thinking along these lines since the turn of the millennium. I was one of those people. By 2010-11, we'd built our software. We'd invested in our own software. Then by 2015, you realise that it's legacy and you didn't know what you were doing and you should have waited. So I think the trajectory is quite long.
The value of the market is 315 billion at the moment, growing 5% year on year. And that's a top-line figure, which doesn't give you the full story, which is that actually that's jewellery and watches together, which can broadly be cut right down the middle. Watches maybe just slightly edges it. But then within jewellery, which is say a $150 or $160 billion market, you've then got huge segmentation within there. Just the difference between bridal and non-bridal, which means nothing to anyone who's not in jewellery, but that pretty much cuts the market in half right there. Then you've got diamonds and Antwerp and Israel on one side of that equation, and then you've got a completely different industry on the other side of that equation. So it's really quite a patchwork quilt of an industry, and that equates to a very deep moat, a very high wall, which despite a rapidly digitising landscape evolving with software around them in apparel and in fashion and in luxury. The jewellery industry is just this big analogue castle that hasn't been penetrated yet, and I'm amazed by what I find on a day-to-day basis inside huge companies.
Alan Cowley: So you obviously left the company you were in to set up Atelier. What year was this? Tell us your journey to now really.
Dominic Hill: Yeah, sure. It was the worst decision I ever made, which then led to the best possible outcome. I'd made director by the age of 27. I hit 30. This was 2011, 2012-13, and I was beginning to realise that I wasn't learning anymore. I began to feel like I was sitting in a golden cage. I had my sports car. I'd paid for my place in north London on my own. None of my contemporaries had done that. Crouch End in London, a relatively affluent part of north London. I had a parking space in central London, and I actually was turning left on planes. But I was basically taking round these needy buyers, chaperoning them round expensive restaurants and trade shows and doing the same thing year in, year out. I just felt that I was stagnating and I didn't know what I wanted to do, but I knew that this wasn't enough or it wasn't right for me.
Then I was invited to an industry leaders summit held in Austria organised by Swarovski with the International Herald Tribune, and it was a very privileged position for me to be invited to that. We were a quite big client for Swarovski at the time, and I had that invitation. So we went over to Austria, and it was amazing - three days all paid for, Habsburg palaces, black-tie dinners. It was fabulous. And McKenzie had done it with the International Herald Tribune on Swarovski's payroll.
One of the speakers there was a young guy by the name of Chris Morton, who is one of the founders of Lyst. He delivered a 20-minute speech, which I found electrifying. Basically, it was like a big slap around the face that made me think I've been asleep. I've been congratulating myself on what a great job I've been doing and aren't I great, I got my place in front of all my contemporaries, my apartment I mean. And actually, here's somebody whose trajectory has just been completely incomparable to mine. And finding out that he was three years younger than me was even more shocking at that time. So that was the beginning of the moment when I knew something needed to move quickly.
So I basically went to the owners of that company and I said, "Okay. I've given you my twenties. What's on the table for my thirties?" And it turns out there was equity on the table. I asked the question and it was significant equity. But I looked at that company as like the Titanic pulling out of Southampton Harbour. It just seemed destined to fail to me. The company needed to evolve its business model. These traditional wholesalers couldn't have a place in a modern digital economy where transparency was just so much more than it had ever been before. And a company like that needs to completely evolve. It needs to turn around 180. It need to reinvent itself. And I didn't think that there was the appetite for that kind of change within the ownership of the company, so the chairman and his son who sat on the board with us. I just couldn't see it happening. There were too many hands on the steering wheel to really pull a hand break turn. It just wasn't going to happen. So I decided that I had to jump, and so I left.
I took a position as a managing director at a young start-up called My Flash Trash at the time, which was run by a quite famous young lady in England called Amber Atherton, who is extremely intelligent and very successful. The small start-up at the time focused primarily on PR. That's where they were making money, but the vision at that time was to make it into this fashion eCommerce pure play for jewellery, and she needed somebody to build that. And I had the experience and the contacts and the know-how, and she had the connections and the start-up and the funding. So it seemed like a win-win, and I took a contract with equity and a vesting schedule.
Amber's a very dynamic person. She was also very, very young at the time, 22. I've got a lot of respect for her, but ultimately, I realised pretty quickly that maybe she wasn't quite ready to have somebody else drive her car. So within six to eight weeks, maybe even less actually, I think it was maybe four to six weeks after starting, we amicably agreed that this wasn't going to work out. I didn't leave her in the dumps. I kept on for a couple of months with her and enabled her to transition out of that, and we're amicable to this day. So it was a bad situation, but we managed our way out of it.
Then I found myself having completely burned my bridges with this dream position where basically I was the chosen one in this company that had come up from nowhere and really earned my position at the top of it. I had the respect of every single person in the company from top to bottom, right? And then I found that I'd thrown all that away. Somebody else had my job and this start-up that I'd joined completely didn't work out. But I had some pretty transformative experiences along the way, like pitching to Tom Teichman at Spark Ventures on my first day in that role and finding out about it the day before, never having drafted a deck in my life and not even enough time to really properly Google it. That's Amber. But it was also a great eye-opener for me.
Alan Cowley: And experience.
Dominic Hill: Yeah, the company I had left, it was just a series of these unusual things that happened at the same time. The company that I'd left had asked me to work a very long notice period, six months. I think they hoped that I might change my mind. Then they'd ask me to keep it completely confidential, not to tell any customers or any suppliers. And in the end, this dragged on and dragged on, and I said, "Look, I'm going to my last Hong Kong trade show," because we do two trade shows a year in jewellery in Hong Kong and it's the pivotal trade show, and this one was in September. I said, "Look, I'm going to this then I'm finishing after more than a decade with you, 12 years. I'm finishing at the end of September. I've got to tell everybody that I'm leaving. I have to do that for my own personal face apart from anything else."
So at that trade show, I told a couple of people that I was leaving and that it was imminent, and they pretty much refused to let me walk about of the booth without agreeing in some way, shape or form to continue talking to them or working with them even if it seemed that what I was going to end up doing was nothing to do or not relevant for them.
And I had a similar experience with the buyer director at a big German retailer. She said, "Maybe you can just consult with me on my digital strategy." And I said, "But I don't know anything about it. That's why I'm leaving this whole old world of wholesale because I need to learn about eCommerce. I know it's the future and it's the missing string to my bow. That is why I'm taking this whole massive pay cut and all this risk is because I don't know." And she said, "Well, you know more than me."
So that began as just a conversation. She invited me over to Dusseldorf a couple of weeks after Hong Kong, and I simultaneously on the airplane on the way back from that trade show, I remember thinking that these two different people on the supply side and the demand side had askea to see if there was something I could do for them. And I thought could I play them off against each other? And the solution came into perspective.
Then back in England, the next day I went to an eCommerce fulfilment thing and I met a chap that I'd pitched to previously for the company Saatchi & Saatchi years before. He's the founder of Parcel Monkey on Cloud Fulfilment and Kong 365. The guy called Nav Ramiah. And he said, "I recognise you." And I said, "Yeah, I recognise you." And he said, "What are you up to?" And I said, "Oh, I've just jumped from the position where I was and I've taken this start-up. At the time, I think he was potentially interested in investing in the start-up. So he asked to remain in contact and see what we were doing.
So I'm just telling you all that because you have to put that in the context of me going into that new role and very quickly finding that it just wasn't the right fit for me, and so I was cautious about introducing that investor to something that I didn't have total confidence in and feeling like I'd make a massive mistake in terms of leaving my previous position and jumping into the wrong boat. I knew I had to jump out of the Titanic, but I jumped into a boat that was full of holes.
Alan Cowley: Hopefully, quite a lot of our listeners are in this situation where they've worked in companies for a long time. They've got an idea or they're thinking to get out and something, but there's not really that push. It's great to hear you understanding that and having that drive to move into something new.
Dominic Hill: I meet people in that position, and the thing I say to them is until you burn your bridges ... I mean really burn them until you've got no other option, there's no food on the table, it can get pretty rough. Until you do that, you're not actually going to find your fifth gear, that extra something.
I go to a really grimy boxing club in north London in Islington. It's called Islington Amateur Boxing Club. There's paraphernalia all over the wall about boxing and a lot of Muhammad Ali quotes, and one of the ones I looked at I remember every morning at 6:00 a.m., freezing cold, no heating in this place, and it's basically a shed in a park ... And one of things was a Muhammad Ali quote which said, "Champions are not made in gyms. Champions are made of something extra, something special that they find to go an extra mile, to find that extra something when nobody else can deliver it."
And it was something that I remember living by. I used to walk past it every day. And when I thought I'd exhausted everything, all of my resource, all of my capabilities, I had to find to something else. It became a bit of a doctrine for me. But it's absolutely essential to me that if you're going to make a success of something, you can't do it while you're doing a day job. It sounds nice, but it's just not possible. So in a way, I had to make the biggest mistake in my professional life to then transition to what now feels like a future that I could never have imagined for myself.
Alan Cowley: Let's talk about that future and Atelier Tech.
Dominic Hill: So Atelier Technology is the world's first SaaS play in jewellery, so software as a service for jewellery companies. We are a B to B service that is aimed at really SME and above, so we're not really aimed at small independent stores or single persons trading. We're into large retailers, brands, wholesalers and export-grade manufacturers. The SaaS play is really a solution to a chicken-and-egg problem, which is that we want to be the enterprise network in jewellery. But how do you build a network? The inherent problem in a network is how do you get two sides to come at the same time to something that they have no reason to come to until the other side is there? So that's the chicken-and-egg problem.
By providing people with a compelling reason to use your software every day because it saves them having to put pictures in Excels, or it saves them having to migrate data from PDF quotes into their internal system, or enables them to compare two vendors' quotes instantly without having to do any work, then you've given people a reason to log-in to your website. And if you can do that on both sides of the fence simultaneously, then you've got the beginnings of a network, which is what we see with Atelier today.
I can give you the tip on this. We're just about to change the main call to action on our homepage banner to The Enterprise Jewellery Network. Up until now, it's been The Ultimate Product Development Tool. Product development and sourcing. We talk a lot about it like that because we're trying to appeal to the designers and the buyers in these jewellery companies.
Traditional enterprise software was sold via an IT guy, and then the IT guy told the people in the company that they had to use it. If you look at HubSpot or Box or any of the great software plays, SaaS plays that have specifically mostly come out of California, they flip the model. So now you get the users to want your product, and then they basically tell the IT guy that they want this. And the IT guy is just now doing a DD exercise, and he's no longer the gatekeeper that he was before. It's user-driving adoption.
Alan Cowley: Or he's lazy enough just to press install and that's it?
Dominic Hill: Yeah. He's next on the line, so he's got to make sure that it all comes together, and that the software is fit for purpose, and that the infosec is in place, and that it's not going to collapse and all those other things. But he's basically in DD. He's not a decision-maker anymore at that point.
Alan Cowley: So how big is the company now where you're at?
Dominic Hill: Sure. I guess we need to slightly reverse to where I was a moment ago insofar as the original business model, which was that light bulb about how could I play off supply against demand at the same time? I was just thinking at that time as a consultant. I wasn't really thinking about starting a company. That kind of happened to me. I didn't plan to do that. And that original idea, which maybe it was doomed to failure because I started with the wrong thing, which was how could I play them off against each other rather than how do I solve a compounding problem, a real issue?
And that first business model that we raised capital on in 2014 was a first cash in, just enough to start a build, and then in 2015, major seed investment of around 300K. That first business model never got off the ground. We were tinkering and tailoring with it like Cape Canaveral, and it just never got the injection of fuel that we were waiting for. And I'm not talking about capital. Ultimately, it was about contingency issues within a contracted billion-dollar retailer, but they just had this creaking IT division that couldn't get anything through because this is a big old retailer that's trying to modernise and compete with Amazon. That's who they considered as direct competition. And they were trying to centralise their accounting functions. They were trying to centralise. Instead of running eight different eCommerce sites, they were trying to run just one. That was the scale of problem that that had, and we just got gazumped three times. We'd signed off by CEO's. It was all in place. But we just got gazumped and gazumped, and it took a year between gazumps.
I remember one pivotal board meeting in Clerkenwell when I had raging fires all around me. We were burning cash. We were running out of runway. The investors had steam coming out of their ears. And one of my co-founders had just exploded in the kitchen and couldn't take the heat. He had made promises to his family and promises to us that were good as long as the build didn't last longer than 18 months. And when it did, suddenly he had to choose his family over us, so he abandoned us mid-build. It was an absolute nightmare scenario.
And I remember walking into that board meeting and basically saying, "I know it's not ideal timing, but I've got this idea I want to talk to you about." And that was the beginning of what became a 14-month pivot from that moment to the day when we switched off the eCommerce personalised website that we were running and had actually got customer acquisition down lower than the average profit per piece. So technically at that point, we should have just poured money on it. But then you're in a very competitive space, which is eCommerce, and you're going up against Pandora, and Tiffany, and H. Samuel. And it's pays per view and it's a very expensive game to be in that one.
So people talk about pivots as if they're these things that happen quickly, right? It doesn't happen like that. It's very, very slow and gradual. You're not convinced that you should even do it for a long time. I didn't get approval by the way from the board in that meeting. They were like, "No fucking way." But I did it anyway because as the investors listening will know, a true entrepreneur, the guys that ... In my opinion what separates the people who are going to really return for an investor from the people who won't is having the conviction, the courage of your convictions in that moment of extreme doubt and tension and everybody telling you it's the wrong thing and that you can't do it, but somehow having the courage to follow through on what you feel to be your gut instinct. So I just put one engineer on it quietly. And we only had two engineers, so that was half of my resource. So it sounds like it was nothing, but it was massive at the time. And then we got a minimum viable product together, and I quietly started getting traction on it.
And I remember another pivotal moment when one of my board called me and they said, "What are you doing in Italy?" Because he knew that with a pre-pivot model, I shouldn't be in Italy. And I said, "Well, I'm just working on something." Then to cut a long story short, we took an MVP to market. We engaged major companies across different verticals of jewellery manufacturing and we broke our product, fixed it, broke it, fixed it, broke it, fixed it for about a year. And at the same time, it became clear that the gazumping cycle was not going end and that we just couldn't wait any longer for this big contract to suddenly become cash-generative, and the investors had run out of patience.
So at that point, I put my house on the line to get more credit and more runway for the company. So that's when you're not only just burning bridges, you're digging holes under yourself at that point as a founder. To give you an idea of what I mean by it can get rough, I remember cycling everywhere, even from Crouch End to Putney in the rain because I didn't get public transport because the only way I could keep my independence, my ability to work out of the corner of my bedroom - and I used to have a lovely glass office - was to reduce cost massively because that was my office. So I had to stay at that place, but the place had a significant mortgage on it. So effectively, I just reduced cost down to zero, and that was the modus operandi to survive at that time.
Looking at it, we delivered huge amounts of software on a shoestring budget. To this day, one of my investors says he's never seen a team deliver as much software, even if part of it we didn't take to market. He can't believe what we delivered on the money that went into the company.
Alan Cowley: I'm presuming you didn't pay yourself at this point?
Dominic Hill: No, I didn't pay myself for two years.
Alan Cowley: And how many years was this since the sports car and ... ?
Dominic Hill: So I left the sports car in 2013. I sold that when I took the big pay cut that took me from six figures to 40K at the time when I took that MD position with equity. It was 40K and a little bit of equity. But I had a big mortgage because I'd bought so low and it was high loan to value at that time. So I had a certain level of expense that I had to cover. And when I decided that I had to walk from that job because it was just not right, suddenly I'm like, "Okay, so I don't generate any cash. I can go back in to some kind of a corporate career if you like, but I'm a natural-born maverick and my CV is one company for 12 years."
I knew I could go and work for Lynx of London or Monica Vinader. I could go and walk into companies like that, but I just couldn't do that to myself. That was why I left the other company, right? I needed something more dynamic. I needed to learn. I needed to do something very different if I was going to stay in the industry. And ultimately, I got to the position with our board where we were convinced that this new model was right. And it happened over a series of very difficult board meetings, one after the other after the other where I really had a challenge on my hands every board meeting. I wasn't sleeping before. I was having night sweats. It was really, really tough for moments.
But eventually, we had enough of a product that looked interesting enough and I could explain it in a simple way, which managed to convince the board that this was a brighter future for Atelier. And today, we've just reached 20 people. We're just going into a larger office space in London. Actually, now I've just got 6 people in London and we're 15 remote. We are on the threshold this month of becoming revenue-generative. So those companies have agreed to pay and they've chosen invoice method as a payment method, and they've now been served an invoice and there's 30 days' credit on it. And when the money hits the bank, I will open a bottle of champagne because it's been a long journey. And obviously, that's transformative for us in terms of value.
As a company, even though we're pre-revenue, we've nailed enterprise clients already. So we're demonstrating elephant hunter DNA, which if you're in SaaS and you're looking at B to B SaaS, what you want to see is can these guys build software and are they disruptive, but can they also put it into big enterprise? Typically, those two thing might not go together, right? And I think that if you look at our homepage, you can see we make it public. We've signed contracts with QVC and with F. Hinds in the UK. They're both different scale of enterprise clients, but we're helping them to evolve their operations for a digital world. We're helping them to become more dynamic, responsive retailers. And that's very important to them in a world where they're fighting for customers, and they're not fighting anymore on the High Street. The customer journey is starting on Instagram or Facebook, or in China, it's starting on WeChat.
Then you've got a problem of signal to noise ratio. There's just so much noise. So how do you draw out signal? And if you're in retail, that means you've got to have a lot of newness. So Zara is a perfect example that I use. They've got lots of newness all the time and that drives their social media, and it also drives return visits from customers because they know that every time they go, there's something different. And it also drives purchase intent.
Literally, I'm a Zara customer. If I see a pair of trousers and I really like them ... That happened to me recently. I bought it in Hong Kong Airport, and now they won't let me take them back. I bought them but they're the wrong size. But the reason I bought them was because I know that Zara, it's not the same thing in every store and it's not there the next time I go back to Hong Kong. So I'm a perfect example. I put my cash on the table because I knew that it might not be there again. If I was going to a more traditional retailer with a slow window rotation, I could have said, "Oh, it'll still be there when I go back in three months' time." And I wouldn't have left my money in their tills.
So the ability to drive window rotation, to put more new products in the window more frequently, is important for all the reasons above but also just going back to basic economics. Look at any product life cycle on a simple graph with profit on the Y axis and time on the X axis, and it starts high and drops low. LCD TV is a perfect example. When they came out, it was a luxury product. It was branded. You could buy Bang & Olufsen, etc., at high margins. Few people had them. Now, they're completely commoditised. They're basically like computer screens on a wall, and the only people that sell them are the base manufacturers like LG.
So in fashion, that's exactly the same thing that happens. Zara sit in the same front rows of the Milan fashion walks as H&M, but Zara get it onto the shelves within two weeks, and so they're eating up the front piece of that on every product that goes through their business. That's why Inditex is one of the most valuable companies in the world, and they've re-optimised their supply chain to do that. They actually pay more per piece produced if you looked at it on a real apples-with-apples basis compared to, say, H&M, but they make less mistakes and they have structured things in a way that drives much more powerful forces like customer retention, return visits, average transaction per customer that walks in the store. Just look at the P&L.
Alan Cowley: What about prospective entrepreneurs, what advice have you got and tips from your own entrepreneurial journey?
Dominic Hill: Don't do it. Save your marriage. Save your assets. You don't need it. It's an aberration. No. Big warning because ... We were on Google Campus for a while, and the badge of a start-up, when I see that stuff on Macs, the stickers all over MacBooks and stuff like that, I laugh because I'm like, "That's not a badge of a start-up." The badge of a start-up is the chronic fatigue syndrome. The badge of a start-up is the grey hairs on the side of your head. The badge of a start-up is you had a shaky relationship with your better half. Those are the things that come with trying to build a start-up unless you're really fortunate and you just hit on the right idea straightaway and you don't have any problems on the way up, and you're just one of the lucky minority.
Alan Cowley: One of a million or billion or something.
Dominic Hill: Yeah. You can even do everything right, and if it's just the wrong timing, the market is not ready for it, then you've done everything right. You haven't put a foot wrong and you're still going to be screwed. So entrepreneurs should really be cautious.
But the thing that I'd say is as an entrepreneur, don't suck either. Like Travis Kalanick, why didn't he appoint a proper CEO who would build proper culture in the company before he had to implode publicly and damage his own baby.
Like me, I've never scaled a billion-dollar software company, but I have ambitions to. Am I the right person to be the CEO of that company? I'm not sure. If there's somebody better for the company, then as a shareholder, my interest is to put them in that position. And you need to think like that as a founder. First, you're a shareholder. Second, you're a founder. And if you think like that, then you'll always be aligned with your board, and you'll always be a reasonable person to talk to, and you'll always be on the right side of the decision in my opinion. If you start thinking that somehow, you're distinct from your shareholders, you're in dangerous territory.
Alan Cowley: So what's next for Atelier and where do you see the company going in the next 5 years or 10 years if you're still in it? If you're still CEO?
Dominic Hill: Yeah, sure. Well, if I'm not CEO, I'm going to be product manager. I'm definitely in the company. I get out of bed in the morning because I want to change this industry, and I want to see the look in the eye of all the people who told me that it couldn't be done or that it was a waste of time. I want to see that moment in their eyes when they realise that they were wrong. Maybe that's arrogant and I'm hell-bent on it, but it's why I get out of bed. So I'm not going anywhere. And, in fact, I would say that it's the depth of that drive that would lead me to appoint somebody else CEO because I'm so married to a positive outcome that even my own ego will be sacrificed in the pursuit of that positive outcome, that I'm secondary to that. That's the previous point. You've got to be able to think of yourself as a shareholder first and as a founder second in that regard I think.
But the future for Atelier is we want to be a exclusive network. So we want to reach a critical mass of companies inside this old antiquated industry so that when the inevitable entrants scale the walls in a couple of years’ time - because this is a big industry, they're going to come sooner or later - I want them to climb the outside of the wall, look down and see us sitting around the pool with a cocktail in our hands with one finger in the air saying, "Hey, we built the network first. You can integrate with us, sure." We know that we're going to integrate with lots of POMs and sourcing systems that cover multiple categories. But by definition, because they're fit for multiple categories, they're very unlikely going to be able to compete with us within jewellery. So we've got a more fit-for-purpose product, which means that in theory we should be the people to deliver that enterprise network in jewellery.
And that's what we're trying to build and we do it very transparently. I don't hide anything. We think that we've got a world-class product. We've got a unique team. At this particular moment in time, we've got fantastic traction and compound growth, and we're raising capital at the moment for the scale-up period of our company. We've got to the point where the board feels that we've done enough iteration, we've done enough testing, and that the data is there now to really fuel it. It's time to light the fire.
It's going to be a hell of a ride, and things are going to fall off mid-trajectory, but the defining moment for us will be when we pull out of the reach of gravity, escape velocity. Another Peter Thiel concept actually. Not one he talks about in Zero to One, but what I mean by that is there was a certain moment in time when enough of my friends were on Facebook that even if I didn't like Facebook, which I don't, if I want to find a kid that I went to school with or a girlfriend I lost touch with, there is no alternative.
And traditional economic theory says that companies who earn sustained abnormal profits must attract competition and that competition is a good thing. Ultimately, Facebook broke that model and Google breaks that model. Platform economics and category economics are rewriting those rules and saying, "Actually, no. These companies have earned abnormal profits and actually the more abnormal profits they earn and the exclusive network effects that guard them from competition, the more positioned they are to grow that."
Look at AI, right? Who are the people who are really investing in it? It's these big platforms that are now competing against each other - Google, Facebook, Alibaba. They're all big platform players that have now just got huge economies of scale in terms of AI, intelligence, and data, and server infrastructure or what have you that now leverage it to then compete against each other. It's a really interesting time, I think, for all of us. We're living through a revolution that's faster than anything that's ever come before it. The impact will probably be deeper than anything that's ever come before it. And I bounce out of bed every day.
Alan Cowley: No, I completely agree. So one last thing I'd like to talk about which is away from tech and start-ups is a passionate film that you created called Surviving Terminal Cancer. So I was wondering if you were okay with just running through that and letting the listeners know because I've watched it, and I think it's an absolutely incredible film.
Dominic Hill: You've watched it? Okay, great. Thanks. It's not an easy film to watch.
Dominic Hill: It's really targeted at patients ...
Alan Cowley: It targets a lot of people though.
Dominic Hill: Yeah, but it was made for ... The reason I don't mind talking about it publicly is obviously I made a film about it. It was a family tragedy. My sister's husband was diagnosed at the age of 31 with glioblastoma multiforme, which is a terminal form of brain cancer, the most aggressive form. And he was an extremely sharp guy, put through Oxford, aced his PhD without even thinking about it, was working for a big oil company, a really smart guy. But when you get those kind of tumours and multiple tumours in your head, your capacity to evaluate your situation is annihilated. And I recognised that and I just felt that I needed to fight for him. And I come from an intellectual background, so I was used to picking up documents that I wasn't familiar with and reading and trying to learn and trying to master something. And I set about it and over a number of months travelled extensively, built contact networks, etc., but it was too late. I couldn't save him.
And to cut a long story short, I made the film because a couple of years after he died I kept waking up having dreamt of other families being given the news that my family was given and the depths that that plunges you to, and I felt that I had quite a lot of contacts and information that would have been extremely valuable to me were it to have been available to me in a succinct format that I could have shared with my family in the critical window between diagnosis and the beginning of treatment, which can then become preclusive.
And film seemed to be the best way to tell that complex story quickly, and it also seemed to be one that would cross divide. It could cross linguistic divides. That film has been translated into seven languages voluntarily by people who saw it and realised that this could be translated and that it saves ... If you're Brazilian and you don't speak good enough English to get into medical literature ... Because trust me, and my mother tongue's English, getting into medical literature is not easy. Getting your head around it. If you're not a native speaker, it's extremely difficult. And how much medical literature on an orphan disease like glioblastoma is there in Portuguese? Where's your resource?
And so I thought film would be something which could cross those divides quickly and that it could just remain there perennially. And in fact, it's been viewed over 100,000 times and I can guarantee you, very few will be like yourself who has no reason to watch the film other than that maybe you've met me. But most of those views are patients who have been diagnosed and are scrambling on the Internet because they can't believe that their loved one's about to die or that they've got six months to live and they think there must be something, which is what we were doing.
I made the film because I thought that ultimately maybe we could also effect change. Gandhi broke the British Empire because he walked through a thousand Indian villages, and he informed people that change should come. So again, film seemed to be a way that I could inject a lot of complex information into a vehicle that could just sit there and just inform people. And if every patient became as difficult and as unaccepting of the ironically called gold standard treatment that doesn't save your life, then maybe the medical establishment would have to eventually change.
And just to close on that, what I mean is when you're given a terminal diagnosis, or your family is, the immediate assumption is, "Well, we can go outside the box." And the reality that these people are confronted with is, "No, you can't." And the reasons for that are many, and you can watch the film if you're interested. What it is, it's a paralysis that's fruit of economic factors, systemic factors, biological factors - a whole load of things that come together. But it's a terrifying realisation that, "Oh, we'll see how the treatment goes first and then we'll see what happens." But the reality is the treatment they're about to give you is probably going to reduce your white blood cell count to a point where you're then not going to be precluded from the entry parameters of most clinical trials. So it's a nightmare situation. I couldn't believe it when I found it, and I wanted to fight it. It's the contrarian part of my nature that just couldn't accept it basically.
Peter Cowley: Thanks for listening to another Invested Investor podcast. You can subscribe to all future podcasts by our website, investedinvestor.com, or via a number of podcast platforms online. Remember, you can order our book online and be sure to follow us on Twitter, LinkedIn and Facebook to get the most up-to-date, interesting and insightful content from the Invested Investor.
