How I Became An Angel Investor
My journey with Haystack started at Brian’s PwC leaving party in 2013, where I ran into Ran (no pun intended) while waiting for Brian’s big entrance. Ran explained me that he’d also left PwC, bought an ice cream shop and was developing an app to replace business cards. I must admit, I had no idea what he was talking about, couldn’t understand how the app would work and more importantly, how it would make any money. We chatted for a while and that was the end of it, for a while…
Shortly before the party I had been made redundant and was enjoying the forced freedom of increased social networking, which included regular catch ups with friends, colleagues and business associates (Brian being all of these). On one of the catch ups Brian mentioned this exciting new app that Ran was working on called Haystack and although I was interested, I still didn’t quite understand the whole concept. By the end of our conversation Brian invited me, Jeff, and Brendon to join him and Ran for a ‘show and tell’ in the CBD. As we turned up I looked around the room and wondered how I managed to get a ‘Guernsey’ with this crowd (Australian for ‘awesome group’), as I was the only one who was unemployed! Either Brian was throwing me a sympathy invitation or he’d seriously dropped his standards, either way I was impressed to be included in such a group.
The presentation was compelling and the enthusiasm was infectious. The fact that I had a long history with Brian and Ran (I was their client whilst I was an executive with BHP Billiton) meant that I already had a profound respect for them professionally and trusted their capability and judgment. By the end of the meeting I was sold and ultimately inspired to join the team and get involved. I was ready to commit and signed up then and there as an investor. This would be where my journey from observer to investor began.
The group they had put together was well constructed – outside of Ran and Brian whom I knew, we had two extremely talented technical founders who would actually put vision into reality. We also had a great investment team with experience in large IPOs, investment, and M&A. Everyone in the group knew each other from previous dealings that involved charities, beer, football, family gatherings, Scottish heritage and adjacent business interests. It was a confidence booster to know that such intelligent and like-minded people shared my views of what we were essentially investing in – a motivated and capable team with an idea that was becoming clearer.
As I had started a new job in Botswana (the things you do), my first challenge as an investor was trying to transfer money to Haystack while waiting for my flight to Johannesburg. Now some might say that coming up with the cash is the most important part of investing, but with temperamental internet connection and bank limitations on daily transfers, this certainly wasn’t the easiest (a startup that can fix that may be my second investment). To add to the fun of this mission, I somehow got the calculation wrong and missed a whole payment! Suffice to say that my first attempt at being an investor wasn’t the glamorous, rewarding experience I had envisioned, but a fairly embarrassing attempt to complete a simple task such as transferring funds. Luckily the Haystack team could find the humour in my dilemma and I trundled off to Botswana for five months while they started working on taking the concept through to a launchable product.
On my return from Botswana we had one of our first investor meetings (in an ice cream factory), where we had one of our first decisions to make: Should we launch for both iPhone and android? (more expensive) or stage one before the other. Based on a very sophisticated study, which involved Ran walking through the Virgin lounge at Brisbane airport, we decided to launch with the expensive option (a decision for which users of BlackBerry still haven’t forgiven us).
When it came to the second round of investment, we extended options to friends and family. Not one for a sales pitch I hit them with the truth… we could potentially lose all of our money or multiply it by a lot, and I couldn’t guarantee which way it would go. Somehow this approach worked and we had another bunch of new investors.
The next few months were where the journey became a bit more real and further investment was required as changes were happening at a fast pace, with lots of spirited discussion around marketing strategies, technical fixes, functionality and general views on how Haystack should work as a business. This is where the role of investor is very different from operator (which was the bulk of my own work experience). You have to understand the business plan, buy into the vision, believe in the team and provide your support to make the business a success in any way you can. This is like driving a rally car without being able to have your hands on the steering wheel. Not easy – but absolutely exhilarating!