Powering data growth
Podcast transcription - 24th July
Alan Cowley: Welcome to the Invested Investor. I'm sat opposite Raymond Luk. Raymond and I just met at the ACA Summit 2019, and I actually heard about you from a business investor. Once I heard about the business, I wanted to have a chat to you, and get to know you, because you're an investor, a seasoned investor. You're an entrepreneur, a serial entrepreneur. You're currently the founder of Hockeystick, which is an open database of start-ups and investors. I just want to kind of hear how it all began. Did you always want to be an entrepreneur?
Raymond Luk: You know, I've thought about that a lot because as you get older you kind of look back and you try to find the seeds of your current life, maybe in your childhood or something, and I did grow up in an entrepreneurial family. Both my parents were immigrants, and so along the immigrant journey, you do the different things you need to, to survive, and they tried out different businesses.
Growing up, I remember in high school there was a government programme where you could take out a loan to start a business. Crazy programme I am sure has had terrible returns for the government, but I ended up taking out a loan and starting a DJ company and running these kind of hormone filled teen dances in like, church basements and terrible, terrible things.
Alan Cowley: How old were you at this stage?
Raymond Luk: I was maybe, I'm going to say 14.
Alan Cowley: And how much did they give you?
Raymond Luk: Three thousand Canadian dollars. A princely sum. The amazing thing is, after the end of the summer, I returned it, had a lot of fun along the way, but I didn't really stick with entrepreneurship until after university, and I actually studied classical music so I was a musician, was my first love. I played piano. I was a composer. Still love music. I went to McGill to study composition, piano performance, but I think I was always a generalist. And while I was studying piano, I was also studying computer science, and hanging out in the computer lab all day.
The day after graduation I started a software company, and I think I made that jump because I realised I loved software as much as I love music, so it wasn't a real conscious choice. I just decided, "Oh, music's great. I love something else more," and took the plunge.
Alan Cowley: Okay. So after university, what was that first company that you founded?
Raymond Luk: It was a company with the very memorable name, Hard Boiled Egg. A multimedia company. Think of it like, back in '97 was when we started, it was an early stage internet development consultancy, web development, software development company. It was a very interesting time to be doing that because you had to build your company, and kind of invent who you are as a company, but the internet, the protocols were being invented.
I started that company right after Netscape released their first browser, the Javascript was in beta, java was in alpha, so it was a bit of a frontier time when everything was broken. Nothing worked, but nothing worked for anybody. So if you could be 5% more functional than the next person, then it was a miracle because everything was crashing. Your computer, literally, would just crash. That Mac reboot, you know, that ding, I probably heard that 100 times a day.
So, I think that was a really, fun time to start a business because of that feeling that, I think for entrepreneurs it’s important that you feel your breaking things and no entrepreneur starts a company to be part of club. You become an entrepreneur because you feel you don't belong, and at that time when the internet was emerging, there were no clubs. There was no blogs. There was no established norms, and I think those are fertile conditions for entrepreneurs.
Alan Cowley: So, it was an excellent time, obviously. What happened to Hard Boiled Egg?
Raymond Luk: I always recommended people, because I didn't have any business training at the time, and I always recommend to entrepreneurs, "If you want a fast and really great way to train yourself, don't do an MBA." I did an MBA later for fun, but run a service company, or some company that's powered purely cashflow. I had no credit card, no loan, no investments, so we literally lived hand to mouth, payroll to payroll, and built quite a large company. At the end of it, just purely based on trial and error, or I like to call it error and trial.
So, we just started doing contracts, building software, and kind of rode the wave of the whole dot-com explosion, and then we actually spun out another company called Opendesk. We really caught the bug. It was my first lesson in tech cycles as we were getting approached by VC's. Everyone was quitting jobs. Lawyers were quitting jobs and starting companies.
So, we had this idea for, almost like a Google Docs kind of things. Or Google Apps, but 15 years before Google Apps. We were approached by some investors and said, "If you spin this idea out, we'll invest in it," and so we did that. That was in, I think, '99. That company was a real lesson, because ultimately, that company failed. It wasn't able to raise money after the dot-com crash.
Alan Cowley: Did you close HBE down to then spin out Opendesk?
Raymond Luk: No, we didn't close it down. I found a different CEO to run HBE, because it was a profitable company. That kind of became its own thing. Then I transitioned to running this other company full time.
Many lessons were learned. One which is, because for a period of time, I was a CEO of two companies, and so I learned not to do that because it's really bad on the business, first of all. And it's obviously bad on your lifestyle. So I transitioned to running this other company, Opendesk, and the lesson I learned, again, I'm really grateful now. At the time it was very stressful, but really grateful to have learned those lessons of, when you capitalise a business with one business plan and you raise money early, you're really committed to one path. And it's very difficult to change the path. You can change the path. You can change the business, but if it's been capitalised as high growth, go for it, moon shot, and with a certain timeline, of you turned around and said, "Oh, but I think we can turn this into a profitable cashflow kind of business," it doesn't work.
Alan Cowley: So, you exited to another company.
Raymond Luk: Yeah.
Alan Cowley: Can you tell us a bit about that? Kind of the process of it, and were you approach? Did you approach them?
Raymond Luk: In that case, because capital was drying up, and the whole market was drying up, so we actively worked with a board, and sought out a buyer. Sometimes you have to do that. You ideally want to just be getting multiple bids, and driving up the price, but the market was not that, at the time. Companies were just going under business, going bankrupt, employees were showing up at their door with a pink slip, and really wanted to avoid that. We had more of a process. It wasn't an exit that made all, of our investor’s huge returns, but their expectation, I mean, what’s interesting is that, a lot of funds ended up closing as well. Their distressed portfolios were being sold to other companies, other funds.
It was a very tough time. It was a tough time for everybody. All those lawyers who had quit their law firms to join start-ups ended up going back and working at a law firm. But I think what happened after that was really interesting that in a kind of recession, and all the people who were not serious leave, and you're left with people who are really serious about starting companies. Some of the greatest companies have been created in a recession.
So, after that initial experience, I ended up working, the one time in my career where I worked for somebody else. I was an investor in a CTO, in a pharmaceutical software company, and then we grew that. It went public, actually. It was a perfect little one and a half to two year kind of period where I was thinking about my next project. I love working. I get excited by projects. I had known the founders, and they said, "Can you come in and help us with product, and help grow this company? We want to take it public."
So, I did that, and had a great experience, but I always knew there was a time limit, that I'm not sure I'm so employable by other people. I consider myself a nice person. Maybe it's because I'm Canadian.
Alan Cowley: When did you transition, and start Angel investing?
Raymond Luk: It was right after I exited that company, I started Flow Ventures, which is a consulting company. Really, a lot of entrepreneurs do this, when you don't know what to do, you start a consulting company, because people start calling you and saying, "Can you do this? Can you do that?" What you really want to do is take a holiday, but that never happens. I don't think I actually want to do that. That's more me than anybody else.
So, I started to think about investing at that time, and it was maybe a year or so after, that I connected with my first Angel group. This is in Montreal. They are one of the largest Angel groups in Canada now, called Anges Quebec, or Quebec Angels. I had done some of my own investing, but I joined this group because I had never been in a room full of other investors before. What I liked, and still like, about Angel investing is that, every Angel has a background, so they're all crazy entrepreneurs, build businesses, or successful people from all walks of life. So not the typical banker, or finance person. People show up on their motorcycles, and their leather jackets, and their suits and ties. I really like that.
So, I started catching the bug of investing, and I like to spend time with entrepreneurs. That's probably the most fun things in my job, is just being surrounded by entrepreneurs. There's always sunny optimism, never a recession, and you're constantly flooded by new ideas, which makes it difficult, as an Angel, because you get so excited by so many ideas, and you don't always have the time or enough free capital in your bank account to invest in every company you want to.
Alan Cowley: How do you think your entrepreneurial ventures then impacted your Angel investing?
Raymond Luk: First thing is, it gave me access to tremendous deal flow because if you decide to put a sign saying, "I'm an investor," but you don't come from that world, you won't know anybody. And as any early stage investor will tell you, if you don't have deal flow you don't have anything. Again, that's a reason why people Angel groups, is to get access to deal flow.
But all, of my friends and connections were entrepreneurs. I had, by that time, started organising meetups, conferences, started blogging about entrepreneurship, so I was an organiser in the community, as well. That gave me access to a lot of interesting companies.
My approach was always to like to sit down with entrepreneurs and just talk. It didn't always lead to me writing a check, but I like to get to know them. I like to help, so I was very generous with time and advice, whatever that was worth, because I knew, having been on the other side of the table, I knew that when an entrepreneur reaches out and said, "I really need help with something," they really need help with it. It's life or death.
I've been in situations where I've been brought in to help shut down companies. There was one company I was advising, just as a friend, as a volunteer, and the CEO really needed help laying off half the staff, and I was there when we made the announcement. We ended up, to save money, hiring a construction company to build, it was quite a big office, and we built a wall to divide the office in two, to save money, so that the company would remain afloat.
And so, I had a passion for entrepreneurship. Not all of those led to investments, but I think I always took the attitude of, try to give first, and then you'll figure out what happens later.
Alan Cowley: What do you think your biggest takeaways and lessons learned from being an Angel have been?
Raymond Luk: I think that being an Angel, there are different stages of it, but I think that at the beginning, the big lesson that I learned was that, my journey, and my story was only one story. I learned so much from other Angels, in particular, who made money outside of tech. My entire community was tech, so everyone made money through selling a company, or running a consulting company. The lucky ones are going public, but I also met lots of other people from manufacturing, and retail, and real estate. Very successful, very smart people, that I learned from.
So, I think that just broadening my own perspective, because Angel investing doesn't mean just investing in tech. It means investing in anything crazy that gets you excited. I think I also learned that, even though, it's kind of independent kind of cowboy kind of thing, there is a discipline to it. You do have to do your due diligence, whatever that means to you as an individual. You do have to dot the Is and cross the Ts with your legal documents. For me, in hindsight, when I look back, the entrepreneurs who were able to communicate with me as an investor who respected the fact that I had written a check into that company, they were kind of better at communicating with me and more transparent about their business. Those were the ones that were more successful. I started to look for that and then, you know, ... years later, it kind of led to starting Hockeystick as a data based kind of company, trying to encourage everybody in the market to be more transparent.
Going back to the day, I remember one investment I made in an education, Ed-Tech Company and the beginning, it was pretty good, but by the end, the transparency and the information flow was so bad that I didn't know that they had closed the company until 18 months later. I got something from the tax authorities saying, "Oh, do you want to declare a loss on this?" I said, "Well, why would I do that?" It's like, "Oh, this company, they closed down," and I had to call the CEO and find out. I really thought that's a bad way to invest. That started the whole journey of well maybe there's a company, maybe there's an idea here, because if I'm feeling like, why should I be an angel investor? I could just take that money, buy an ETF, get a rental property, and that's great. There's structures and information flows that already support that, but that's not what I wanted to do. I thought there's got to be a need for something better. '
Alan Cowley: I'd just like to touch on something that was said at a talk on the first day here by Carla Harris on founders' fatigue. You said that you don't need to take holidays, but how do you feel about that from an investor point of view and your entrepreneur hat on?
Raymond Luk: My attitude about that's totally changed. I think that there is more, there's more awareness of kind of the mental health effects on entrepreneurship, the negative effects. There is this kind of, and I was part of this too when I was younger, kind of bragging about not taking vacations for seven years, which is true back in the day, but you know all that stuff, burning the candle at both ends, insert analogy, now I have a very different opinion about that. Up to a certain point, you do need to be willing to do anything but doing anything 24 hours a day is not going to help your business and it's going to hurt the returns because the first thing you lose is focus. Effort only gets you so far. Focus is ultimately what builds your business. Now I think that I'm more aware and I look for this and other people that you need to do something for yourself. You need to get your focus.
It's not just about work life balance. I hate that term because what does that mean? But it's about having your own personal happiness will make you a better entrepreneur. It'll make you a better manager and your own ability to focus depends on ... I mean Steve jobs would just go for walks. Bill Gates and Warren Buffet, there's a great story about they're being interviewed and I'm not comparing myself to those people by the way, but a journalist looked at their day book and it was empty and they said, well, if I fill it full of meetings and everything, when do I have time to think and react? For me it's podcasts, audio books on the subway. I walk a lot, I meditate. That's something I learned later in life is that's given me so much crisper a focus on what I'm doing instead of just running around and when in doubt just grind more. That really doesn't get you anywhere.
Alan Cowley: Yeah, no, I completely agree. I think there's resilience and there's pushing through it, but there's also being able to understand do you need to have that break [inaudible 00:03:56].
Raymond Luk: Yeah. I think resilience means resilience over 10 years, 20 years. I think when you're young you don't think about that. But resilience is resilience for the marathon, not for the sprint. I think I would say the same thing on both sides of the table. When you're an investor, understanding that being an angel investor or early stage investor means holding your positions for over a decade on average. That's what the data tells us. I think that people, investors probably think that things will happen faster.
Of course, I want things to happen faster too. But just having that stamina to say, you know what, I'm going to be in it for the long haul. You need that as an angel. You need that as an entrepreneur.
Alan Cowley: Let's just touch on another part of your jigsaw puzzle here. You've got Year One Labs. Can you just got through a bit of what you do with year one labs?
Raymond Luk: Yeah. Year One Labs is something that I started with a few entrepreneur buddies. We were sitting around as entrepreneurs often do. You're already busy, you're already volunteering, blogging, running a company, but when you get together you think, oh let's just start something else. It's ill-advised strategy for that work-life balance I was talking about, but we thought how do we build great companies, how do we take the knowledge that we have and some of the money from people we know and how do we create that very first step, which is the reason we call it year one labs. How do we juice that first year of a start-up's existence?
We decided let's just try to iterate on this model instead of starting a fund or running kind of a ... at the time Tech Stars and, and YC were like the big accelerators, and we had this idea of a pre-idea accelerator because we thought half the time when entrepreneurs come in to pitch, their ideas are really crappy and they'll find out when they try to do it and they have to pivot and our ideas are crappy, their ideas are crappy. What if we went before the idea and look for other characteristics? We actually hackathons and ran events. We ran the first Google hackathon outside of Mountain View. They came and co-ran that with us in a basement of a building in Montreal. We would bring in mostly coders at the time. We'd do these hackathons and you know, 48 hours build an app.
Then we kind of look at those entrepreneurs and we didn't care about the app they built or the idea, we'd say, this person and this person and you guys are really, interesting. We like the hustle, the characteristics that you have and we're going to give you $50,000. If you don't have an idea, we're going to give you a pool of ideas. That was our thesis, is we can put them all in the room. We all sat in the room with them for a year and open doors. We had the idea of 100% bet on the jockey. We brought in a number of different teams from all over. I think our first was from San Diego, a couple of entrepreneurs and Toronto and Ottawa. We had no idea whether it was going to work, but we had raised a fund to invest in these companies and then we did it. Four of us were kind of like GPs, just running it.
It was a tremendous amount of fun because we got to be entrepreneurs and investors at the same time. We would literally cold call and just very, very hands on. It was a great journey. The first company we kind of built was actually a company that we also came up with the idea for this business, but we gave the idea to the entrepreneur because we said the idea doesn't matter, it's the people. They ended up launching at South by Southwest. There was a mobile location based kind of Q and A platform called Local Mind. They did really well at South by Southwest, ended up moving to San Francisco and I think 18 months after they graduated, we sold that company to Airbnb and they ended up becoming key people at Airbnb for that company's mobile push. One of them just left actually.
At the time when we were negotiating, we just said, we just want shares in the company, we don't want cash. Going back to what I was saying about stamina is that we're still holding those shares. Eight years later I'm still on paper the Managing Director of that fund only because we're waiting for that exit. I thought the exit would happen much earlier, but there was that trend of staying private, raising billion dollar late rounds, and so when that IPO happens, it'll return the fund many times over. I still see some of the LPs from time to time and we kind of joke about it now that hopefully we'll get out at the 10 year anniversary. Looking at the date, actually 10 is actually probably the average now.
Because it was an entrepreneurial venture, we were about to raise another, a bigger version, go bigger, and then we all quit and said we just like being entrepreneurs. We all started companies and ended up being a funny name because we didn't think we'd name it Year One Labs because it was only going to exist for one year. But it ended up doing that.
After that journey, you know, several things happen in my life. I met my now wife and she was living in Toronto, I was living in Montreal. I used to drive six hours to Toronto every weekend where I fell in love with audio books and podcasting, by the way. But you know, usually there's only two reasons you ever move anywhere is love or work. I moved for love. I've been in Toronto ever since and my mother passed away at that time too. It was a lot of things, kind of said it's time to leave. Where I considered Montreal home, it was time to leave Montreal and find a new home, so that was a big change.
I moved right when a new eco-system was emerging that's since really skyrocketed, so it was a really, fun time for me.
Alan Cowley: So, you've moved to Toronto. What gave you the idea for Hockeystick?
Raymond Luk: The seed was planted originally when I was kind of unhappy with the amount of visibility I was getting. I always felt kind of annoyed and, a little bit miffed at the idea that ... let me get this straight. I'm going to write a big check from my personal bank account. It's highly risky, it's illiquid and you have no track record. I get that. But on the other side then I'm going to get no data, no visibility, no nothing, so it seems like what's in it for me? That was the seed that was planted.
After I moved back to Toronto, I forgot to mention I started an accounting software company and we sold that.
Alan Cowley: What number is that on the founder list?
Raymond Luk: I don't remember. It was called Scalability. I don't know if that's just me, my level of craziness or other people's, but I can't sit still. Ideas always come to me. I thought, well accounting and like small business accounting and bookkeeping is a lot of data. I'm really interested in that space because as an entrepreneur you always do your own accounting up to a certain point. We started this ... built this almost like an ERP business for small accounting firms to be able to scale because it's not a scalable business.
We built that, had a really great piece of software and then some VC friends of mine said, "You know, we're really struggling with data collection and we have such crap data about our portfolio. Even after we write the check." I said, "Hey, wait a minute, I had this idea when I was living in Montreal." We over beers started talking about it and then they said, "We'll be your first customer, we'll write a check. We'll prepay a year in advance, it's quite a large fund and please go build that." I said, "Wait a minute," remembering rule number one is don't be a CEO of two companies. I just said, do I really believe in this to go all in? And the answer was absolutely yes. We sold that company to actually an accounting firm who was interested in kind of running with that as their own platform and maybe building it as a product.
Maybe if I was younger, I would try to do both and do this and do that, but I just said, if I'm going to have focus, I'm just going to jump right into Hockeystick. We had customers already, from day one and that started that journey of scratching an itch that I had the market saying, we have this problem. That's just the beginning of course. Just because you have customers and a need ... you're done. It really just is the start line, but it was a start line that I knew a lot about because I was an investor myself. I think that if you start companies, you have to have some competitive advantage. Mine was that, I knew the market, I had a lot of connections in the angel world and in the venture world and in the entrepreneurial world, so it was easier for me to not make those mistakes. I'd go make other more creative mistakes.
Alan Cowley: For international listeners, why is it called Hockeystick?
Raymond Luk: Ah, that's a great question. The Canadian answer is we're a hockey mad country, so we find any and all reasons to insert hockey into everything. It's not just Canadian, because I'm sure if you had listeners in the Nordic countries and Russia, which hockey is ... other great nations as well. But you know, Hockeystick is this kind of J curve, this idea of exponential growth. You may be at the blade of the stick and you're kind of growing linearly, 10%, 20% a year, but when ... hit an inflexion point, you really start to rocket up that curve. You want this as an entrepreneur, and you also want this as an investor. But it is an aspirational curve, right? Not everyone achieves it, but we wanted a name that captured this aspiration. Every entrepreneur in the world wants to achieve Hockeystick growth. For us, the downside of naming yourself Hockeystick is that every single day of your life, people are asking, "So have you achieved Hockeystick growth yet?" So if you haven't yet, you're really-
Alan Cowley: Oh, yeah.
Raymond Luk: Just forget about that for now, but part of being an entrepreneur is putting yourself out there, which I like. Is you're saying, "My name is Raymond Luk. I've started this company. It's going to be huge."
Alan Cowley: Yeah.
Raymond Luk: Then your friends, your family, everyone says, "Is it huge yet? Have I read about you in the front page of The New York Times?" "No." But that's something that you have to have the resilience to ... For me, I have a good sense of humour about it. But other people, it can ... You have to find your own way to deal with that because until you're a success by whatever measure you want to have, every day that you're not a success you're not a failure, but you can feel like you are.
Alan Cowley: Yeah.
Raymond Luk: Because whatever you have, you know that you want something bigger and better. That's partly why we called the company Hockeystick is this feeling. I always believe that name your company something provocative and creative, not accurate, because you're going to change. Nobody will remember your accurate name. Everyone remembers Hockeystick. We've got these lovely Hockeystick pens now which I really believe maybe that's the more successful business. People would just go crazy for these pens. I'll give you a pen. Any of your listeners who want a pen can shoot me an email.
Alan Cowley: So why do you feel that Hockeystick is so necessary for the start-up and investor ecosystem?
Raymond Luk: You know, Hockeystick exists because there's a huge problem that still has not been solved which is in the private markets, let's call them, it's just as large globally as the public market. But the public market has reams and reams of data because it's regulated. Depending on what country you're in, there's different levels of transparency, the U.K. being on the leading edge of that, so a real kudos to the U.K. regulators. But there's a problem here which is there's a lot of money going into the private market, but there's not the fundamental protections that good data will provide you. Even knowing what are people investing in. Is it growing, is it shrinking? Just basic fundamental things that you get in any public exchange.
There's this idea that most economies in the world are investing in innovation and they love the idea of building unicorns in their backyard. This kind of idea of building small business into big business is job growth, economic prosperity. We all want that. We want to make money as investors as well. But there's no data underpinning this. The data that exists is bad. It's consistent. So that's our goal is we want to fill in that gap. We want to have not only the best data, but we want to build the infrastructure around that data so that if you're a U.K. investor and you want to come to Chicago and invest, you or your fund wants to invest for diversification reasons in private companies here, it's next to impossible to do that right now.
But with good data and technology around it, you should be able to do that. Maybe not at the level of buying and selling shares on the stock market because the regulations don't allow you to do that, but using data to manage your risk, finding new opportunities and being a better investor, that's what we're trying to do. That benefits everybody. It benefits definitely the entrepreneurs because fundraising is still very difficult. There's a lot of friction in fundraising which is not beneficial. It's having to personally go travel around, do a road show, pitch people with PowerPoint tech. It's kind of a rite of passage, but there's no data that says that's the best way to raise money. Not at all. Just the opposite.
We're trying to solve that problem to create more sources of capital, which I believe will create better companies who have easier access to the right capital, and then to be able to build on top of that. We haven't even talked about other things that the public markets do like algorithmic trading, applying AI to arbitrage opportunities, all these things that people have been doing for decades in the public market because the data exists. We'd like to get there as well actually using technology to drive higher returns and newer opportunities than private market. We're not there yet. We're still at the level of, who are the companies?
I was at a session, a breakfast session today, and we were just asking how difficult it is as angels in the early state even to know the company exited. We haven't solved that problem yet, but that's our big vision. That's kind of our goal.
Alan Cowley: No, no. Myself and the listeners would all be watching out for Hockeystick. It's going to be a hugely important aspect of the start-up ecosystem for investors and entrepreneurs in the future.
We've heard a lot about successes. Over the last 20 odd years. Can you just tell us about a failure you've had and what you've learned from it?
Raymond Luk: Yeah. I mean one of the early experiences I had was a failure. I was saying earlier that I had this sort of concentrated MBA of ... The first part of it was how to build a business purely on cash flow when I didn't know what a balance sheet was. I didn't know what anything was. I've never seen a legal contract before when I started. So the first half of it was learning. I remember every two weeks being completely frightened about just making payroll. So you have these little failures along the way of you hire your friends, not necessarily the best people to hire. As a manager and a founder, maybe you focus too much on being well liked, especially you're young, they're the same age as you, and you hang out. I'm still friends with, of course, everybody in my team, but at the beginning, too focused on how come they don't like me? Then it's very difficult.
Raymond Luk: They're the kind of day to day failures that I got very accustomed to. My ego was very healthily humbled because you just had to survive. I mean survival is not very glamorous, but then when we spun out into this venture backed company, seeing the kind of sky falling around me and not being able to kind of do the things that I wanted to do, not having the capital, and really thinking, "Oh, but how can I pivot?" But not being able to pivot because all of my investors, they had to get out of their positions. I think that the failure of that business, it taught me one thing that I'll say that I don't hear a lot of people talk about, which is how to behave when your company is failing. Because I tried to be very upfront, even tempers were kind of ... Nerves were fraying with my board and investors and employees. In the end, we laid off all of the employees.
But I kind of learned that I really needed to focus on how I was going to behave. I couldn't deliver the outcome that I wanted to deliver in that company, but I could control whether I was a good person. I had integrity. I had kind of vowed that the employees were my number one concern. I was not going to have them show up, I'm gone, they see a letter from the lawyers. So I said, "We're going to wind things down in a way that is respectful to the employees. Get them lots of notice." Then I was going to be the last person there to turn the lights off.
The same with the board and when we ended up selling to another company, I wasn't getting paid a salary anymore because there's no money in the company. However long it takes, I'm going to see this through. So I treated everybody with the maximum respect. I remained friends with most of the people that invested in this company to this day. Some of them have reinvested in my businesses. I think that taught me a lesson about you can't always control whether your ventures succeeds or fails, but you can definitely control how you behave. Your reputation is much longer than your financial success.
20 years later, nobody really remembers, "Oh, did I make money?" They don't really remember, but they remember how I behaved, that I'm proud of that. Nobody's proud of their failures, but I'm proud of the fact that I don't have to avoid them in the supermarket kind of thing.
That began the journey of, "Oh, I can survive that failure. That built my resilience." Now I can tell other people, "Don't worry about it. If your company fails, it's not the end of the world." In fact, fail faster is what I tell people. If your idea's not working, you have a much better idea inside of you. You've got the skillset and now you've got the benefit of this experience that you can take that failure and go do something else. There's so many opportunities.
I'm an optimistic person in my nature. Not to say when you're failing it feels good, because it doesn't feel good, but you always have to think about the next thing.
Alan Cowley: Yeah. That's a hugely important lesson for entrepreneurs whether or not it's your first venture or whatever it's your third or fourth, just to know that fail elegantly.
Raymond, yo’ve had about so many different ventures over the last 20 years. What does the future hold?
Raymond Luk: Well, for us, we're starting to realise our namesake, so the company's really growing. One big thing we're doing now is really expanding internationally. We started in Canada. We're really quite dominant there. We've got a lot of support from our community there and partnerships like with the Angle Capital Association in America and others. All around the world, people are reaching out to us and saying, "That thing you've done that we keep hearing about, we have that same problem in our country or in our region or our industry." It's something that we knew in our gut that it wasn't just a North American issue, but now we're really excited by this growth because we really saw Hockeystick as a way to be the world's best source of data about private companies and to be a real platform that globally if you're interested in investing in private companies or building a private company, in some way you want to be involved with Hockeystick.
I think the big thing for us is international growth and also really starting to apply more and more advanced technology to the data that we have. We have a really long term vision about how do we take the data, which is really only the first step, and create new opportunities that people aren't even aware of? Everything from, people talk about blockchain a lot and trading securities. Being more like a stock exchange for private securities, helping in fund formation and using data to drive what are the right funds to form, to invest in, whether you're an LP, GP, angel, sidecar fund.
People always forget that the securities market is always evolving too. There's new forms of digital securities that are being invented in places like Singapore and the U.K. and all around the world. So we're just at the beginning, I believe. We're still in the blade of the Hockeystick curve as a whole industry. We're really excited. We love industries where there's infinite growth, we believe, and yeah, we're really excited by this kind of growth. There's nothing more gratifying than seeing a vision kind of realised. We hope to be doing this for a long time. We're very long term thinkers. We think, "Geez. I wonder what's going to happen in 20 years." That gets us up every morning.
Alan Cowley: Yeah. I doubt this is your last entrepreneurial venture either.
Raymond Luk: Don't get me started. If I start another company, I'm going to blame you.
Alan Cowley: Yeah. Raymond, it's been just fascinating and thank you for being so open and honest about your business journey. I know the listeners will absolutely love it. Thank you.
Raymond Luk: My pleasure. Thank you.
Peter Cowley: Thanks for listening to another Invested Investor podcast. You can subscribe to all future podcasts via 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.
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