Tony:
So welcome to podcastmybusiness.com.au and the podcast channel. And today we have Fred Schebesta from finder.com.au and finder.com. How are you Fred?
Fred Schebesta:
I’m great. Thanks everyone for listening as well.
Tony:
Great. Excellent. And I probably mispronounced your surname, but what can I say?
Fred Schebesta:
It’s like the best star, like Schebesta.
Tony:
Schebesta. So you are the best star. You are the star. Fantastic, that’s what I like to hear. All right. So today what I wanted to have a chat about, because what people don’t realize is how much you are in the venture capitalist space. And that’s one of the things you list on LinkedIn, is being an entrepreneur. And let’s face it, we are in interesting times. I don’t really like to talk about it too much, but we are where we are in relation to COVID and whatever. And what sort of opportunities do you see at the moment for people starting off, trying to raise VC capital and so forth?
Fred Schebesta:
Yeah. I think there are a number of new opportunities that have been created because we’ve all gone through some, I guess, new adoptions of technology. And I think that the past plans and business ideas, which potentially were a little bit ahead of their time are now much more, I’d say, in the wheelhouse of what’s possible. So I think the adoption curve, I’d say for say, cryptocurrency has been fast forwarded because everyone’s comfortable with digital payments and they don’t want to use cash as much anymore. I think the adoption of things in the video space. In particular, I think potentially VR and AR could potentially be fast forward due to everyone using video calls and obviously distancing and working from home, and they want to get a more realistic picture of an experience with other people.
Fred Schebesta:
I think, again, things like digital banks, digital payments where you’re not going into your bank anymore, you’re just operating and dealing with them remotely or via digital means. Again, I think it’ll be fast-forwarded. So I think a lot of different enterprises, particularly in the tech space, have been upturned. And potentially where there was less investment, now venture capital is looking to add to their portfolios and to rebalance for the new economy that’s being established.
Tony:
Mm-hmm (affirmative). So I guess it poses two perspectives. One is from the venture capitalist firms how to, I guess, pick a winner just for ease of use, if we were to say pick a winner, and wanting to be that winner that gets picked. So how does a VC at the moment try and pick a winner?
Fred Schebesta:
Well, I think we’re all kind of staring at the future, and we’re all making and placing bets on what that next set of innovations will be. Now, I think right now it’s very unclear. So I think people are spreading their bets quite wide. I think there are businesses which there are themes of businesses where VCs were probably looking at deals, and now they’re re-looking at those deals. So things like I think the e-commerce space has been reopened. And at least the logistics it leads to all sorts of different down the line businesses, I think, in the past were potentially looked at as flooded and there’s not enough space due to existing competitors. But I think now there’s a whole Cambrian explosion of different and new things potentially, and experiences that people want to have with e-commerce.
Fred Schebesta:
I think getting from … So I think there’s two things. One is existing themes, which were picked before but now are even stronger. And then there’s sort of your losers as well that you’re trying to move away from, things that are relatively close to the travel space, things which are … I’m not sure if outdoor advertising is doing terribly well right now.
Tony:
No it’s actually not, yeah. That’s one of the things I saw the other day. The results pretty bad for them. Yeah.
Fred Schebesta:
So things like that, I think. And then I think these new themes, so work from home software for business in general. So your Slacks, your Zooms, your Team, Google and things like that, sure. But people are like, “Okay, that’s great, but I want more. And I want some different use cases.” So they do really well in certain edge cases, and then there’s other edge cases around it that are now become big markets that weren’t necessarily markets before. I think people are looking for new and different ways of doing that. I don’t think it’s a winner take all market in particular I think. MSN Messenger and Skype were around for 10 years plus, and then Slack came along. And Discord, I think, is a very interesting technology. I think obviously Facebook with its rooms is trying to move a little bit towards that. I think there is new and exciting ground that can be opened up here.
Fred Schebesta:
So I guess in terms of being picked, so maybe switching to your other topic there, Tony, I think, if your business is playing into those themes and where sort of the market’s going, I think it’s an easier time for a VC to pick you. Whereas if you’re coming in relatively hot in some theme or something which maybe was from the past, but is still very strong, that is of interest. But I think there are definitely new ads that people are trying to look for right now and pick up early companies that are very aligned to the new opportunities that exist in the market. And I think coming in with a view about what’s going to happen in the future, and here’s our thesis and you should invest in us for that reason. I think that’s sort of the thinking I think would be strong right now. 
Tony:
Mm-hmm (affirmative). Okay. So this is not a pitch, but as an example. So Podcast My Business I started in March, and it’s designed around helping businesses build and start doing podcasting, because it’s great for content marketing. So you get the podcast, you can convert it to text and go to Facebook and Instagram and Twitter and all those sort of things. And we started off with online software such as we’re using now as well. So how would, and again, I’m just using it as an example, this is not a pitch. How would that be translated into a pitch for a VC?
Fred Schebesta:
I guess in terms, are you saying how would your use of technology and your adoption? Well I’ve heard similar stories to quite a few podcasts right now. Podcasting seems to be another thing which is really exploding, because everyone’s sort of listen to all the music that they like and now they want something new and they got a lot of time and they want to hear something else. So I think podcasting kind of has always been that slow background burn. It’s been there and it’s been chugging along, but now I feel that there is that theme of deeper and more interesting content that you can carry around with you because digitally you’re looking for something just more than a song. And you’re trying to learn something, right?
Fred Schebesta:
I think the technologies, the picks and the shovels, if you look at that from that perspective, what are the contributing software and technologies into podcasting? Yes, there’s the recording stuff. There’s the hardware. I think there’s some quite neat little setups that are out there right now, and I think they’re quite good. But I think a lot of it has been kind of commoditized. I think it’s a lot about distribution and advertising. That’s not really that easy, and that’s probably where a lot of the opportunity lies. And I feel like the hardware and the software is kind of, yeah, I think it’s kind of been done okay. I don’t think there’s a major problem that exists there. It’s the access to find podcasts, I find that challenging. There’s one or two key channels. But I think Spotify are moving into that, I think that’s a very interesting trend. And I think if you can start to aggregate some of these audiences, I think you can start to really build …
Fred Schebesta:
If you go back in time, there was very strong radio shows. People would tune in for the radio show in the same way. I feel that’s kind of been rebooted. And I think the advertising and distribution part of it’s probably the weaker side.
Tony:
Mm-hmm (affirmative). Yeah, absolutely. Okay. So what advice would you have for someone starting off now? And let’s look … It’s a difficult thing because we’ve got Melbourne in lockdown and we’ve got various places around the world in other stages of lockdown and so forth. Would this be a good time to start a business and start pitching? Or would you suggest wait a little while? What’s your thoughts around that? 
Fred Schebesta:
So I think now is a great time. And that sounds counterintuitive, but I think a lot of people are, and a lot of people and a lot of businesses are just a little bit, “Whoa, what’s happening?” And if you can show that, “Hey, in this chaos, we’ve got a plan. We’re executing, we’re doing this. This is up. This is where we’re going. This is what we’re up to”, you’re going to capture a lot of market share. You’re going to get a lot of stuff done, because I think people are a little bit right now because they are trying … You don’t have as much face to face contact. Everything’s very video. It’s kind of like being structured and channeled to that way, and you have a lot less serendipity. There’s a lot less events going on. And so it’s the speed of things has slowed down a bit. I think everyone’s sort of adapting to that. They’re a bit deer in the headlights.
Fred Schebesta:
So I think if you’ve got a plan and you’ve really got a team together and you started working on something and it’s starting to really work right now and you were adapted to the current market, I think it’s probably one of the greatest times ever to start pitching, because I think you’re showing that you can deal with chaos and major disruptions.
Tony:
Mm-hmm (affirmative). Absolutely, and go forward. So you could be a bigger fish in the pond rather than the smaller fish in the pond because there’s less fish then.
Fred Schebesta:
Definitely. Definitely. I just think there’s less pitching because it’s … obviously there are companies that are screaming out for capital to stay alive, but a lot of VCs don’t want to fish out a sinking ship. I think there are other businesses, but where there’s probably just some time when it, yeah, it’ll take time to come back, but they’re very strong businesses. But they’re definitely going to be weakened. And so as a VC, I’m sure that you’re balancing up, I guess, that risk and reward ratio. And should you take upon a new player who has less overheads, more focused and innovative business model or an angle or whatever have you, and go from there?
Tony:
Excellent. Okay. So as also you’re running a business at the moment, and I always like to get some tips, what would be some tips for businesses to focus on at the moment to get through the pandemic?
Fred Schebesta:
I think one of the key parts that as, I guess, an entrepreneur in the business, is your reason for being there is to grow the company, to adapt it. Right now that’s what most companies need. They need that adaption. They need that change. And I think getting everyone very comfortable right now that change needs to happen. Because for a lot of people, change is not the funnest thing to do. But right now I think culturally making sure everyone’s aware and comfortable with change. That’s the first thing.
Fred Schebesta:
And I’d say even for the next 12 months change is going to be just the normal going concern. That’s just going to be everyday business. Every day is going to be something slightly different and adapting and changing. I think everyone needs to just be comfortable with that. So agility and speed and adaption right now I think are going to be at a premium. Whereas consistency and efficiency I don’t think are as valued right now. 
Tony:
Yeah. Yeah. So I think it’s just head down, ass up. Just get the job done, cope with the change, and just be ready for the next change that comes along, because it’s going to be so many more to come.
Fred Schebesta:
Definitely. And that adaption, I think, is particularly when you’re talking about opportunities, right? So right now you want to be the fastest to adapt. That’s where you’re going to get the wins.
Tony:
Mm-hmm (affirmative). Yeah, because I mean let’s face it, retail’s the one that’s being hit the hardest. But if we look back to the beginning of the year, retail were destined to be the hardest hit even before the pandemic.
Fred Schebesta:
Definitely. Yeah. It’s a tough business to be in. Well I guess if you’re in e-commerce retail, you’re doing really well. And I think retail just needs to adapt where their stores become places where they’re logistics places. They’re not actually places where they sell things, you just pick up stuff from there. So click and collect I think will be eventually what all retail shops will become.
Tony:
Yeah. Well, and my other business, my digital marketing business, one of my clients is in the e-commerce space, and their revenue has skyrocketed like insanely. And they sell remote control cars. So everyone’s stuck at home. Kids are stuck at home. What do we get? What do we play with? “Dad, I need something. I need something.” So that’s a good little market opportunity right there.
Fred Schebesta:
That’s brilliant. Yeah. Great niche.
Tony:
Mm-hmm (affirmative). Yeah. So again, okay. And before we finish up. So talking about niches, and I think that’s where we need … Do we need to look at getting more niche-y in the future?
Fred Schebesta:
It’s interesting going wide or focusing in. I think that’s what you’re talking about. I think if you’re on something that’s going to be working right now, yeah, you want to focus in and really niche up and create a user base and a customer base and build from there. But if you are not, then you might want to start spreading a little bit wider and start picking up some new opportunities where you can focus. I think it’s kind of you’re in that moment in time right now where those decisions need to be made.
Tony:
Yeah. And so we touched on about businesses needing to focus on change. So is there enough bandwidth for businesses to focus on opportunities as well as change?
Fred Schebesta:
That’s interesting. Yeah. So I think that’s break down that change. I don’t think that change is just taking up opportunities. It’s sometimes closing them down. And I think there’s got to be a lot of hard decisions made right now about where is that focus, and creating that space, like you’re talking about, to take up opportunities. Yeah. You need to stop doing … You can’t just add. There’s only a certain amount of time everyone’s got and a certain resource pool. I think it’s about making some hard calls right now as well. And going through and saying, “Hey, we’ve we stuck at this for 18, 12 months, whatever have you, we just don’t see a future in it. Let’s close that down.” And some of those things might be not that much revenue. Some of them might be actually a little bit of revenue, and some of them might be quite a bit. And then you have to make a hard call about where’s the future of the company going.
Tony:
Cool. All right. So is there anything else you’d like to add?
Fred Schebesta:
I think, I guess, the last thing I’d suggest for people who are building a business right now is persist, carry on. Because things will change again. And they’ll change back slowly. And people will remember the companies that exist now. And when the upswing happens, a lot of those companies will do really, really well.
Tony:
Absolutely. Okay. All right. So that’s Fred at finder.com. And of course [inaudible 00:19:39] finder.com.au. Thanks so much for your time.
Fred Schebesta:
Thanks
