Full transcript: Alex Hoye on London Real
0:20 Okay, here we go. This is Silicon Real, the video podcast dedicated to the people of the London technology startup scene. I am Brian Rose. I also host London Real, which is a similar three-person format. We had Bruce Perry from the BB Series Tribe a few weeks ago. We’ve had Tim Ferriss, futurist Jason Silva, and drug smuggler Howard Marks have all been here in studio. Today on Silicon Real, my co-host is entrepreneur Colin Pyle, who comes to London from Toronto. You might have seen him riding motorcycles across China and India and doing all sorts of crazy stuff. Thanks for being here. Thank you. Number 14. Number 14. We’re not playing around, are we? We’re not playing around. It’s Whizzing By. Are we into our second season now? Yeah, we’ve just got picked up for a second season. I would tell people.
1:09 Our new hit series. That’s when the syndication really kicks in. Yeah, I think it’s a hundred episodes. Then it’s just a money train. Let’s get there. Yeah, we’re going to work on it. Our guest today is Mr. Alex Hoy, who is the co-founder and CEO of the Faction Collective, which is a Swiss-based manufacturer of skis, poles, helmets, and soft goods. Previously, you were CEO of Latitude Digital Marketing, which was one of Europe’s largest. You’ve been an active angel investor since, I think, 06. You were also the founder and maybe chairman of the ICE group, which stands for the International Conclave of Entrepreneurs. That’s a story to that. I would say co-founder of that one. Okay, co-founder. We’ve got to hear all about ICE. It sounds very mysterious, definitely. Alex, thanks for being here. Welcome to Silicon Reel. Well, thank you. It’s very cool to be here. It’s hard to know where to start with you, because you’ve been around in this business for so long. I wondered if you could just talk a little bit about digital marketing, because it’s a phrase that we hear a lot about. I always wonder if there’s people making money off digital marketing that don’t know what they’re doing. I always wonder if digital marketing is the Levi Strauss of the 1849 gold rush. Those are the guys making the money while all the big corporates are looking for the gold and don’t know what’s going on. I at least wanted to get
2:29 Your opinion on that before we get into everything else that you do. Sure. Well, digital marketing comes in different forms. If you look at what I think is the coolest and most effective, mostly it’s about whenever brands are able to have a dialogue with consumers, and they are engaging. Engagement is really the evolution of digital marketing and something that you just couldn’t really do before. It was mass media broadcast or something like that. With engagement, it’s about stories. It’s about people. That’s the coolest part of what digital marketing is today, and it’s not that different to PR and talk shows and stuff like that, but just a lot of interaction. People can talk back. People can get involved.
3:15 That’s the coolest thing that’s going on in digital marketing now. With that, what I find is a lot of times corporations are, we’ve got to get us some of that. Let’s hire somebody to do that. Some of that you can’t outsource. You’ve got to be authentic. You’ve got to be involved. That’s totally changing the structure of marketing and the consumer relationship with the brand as well, because then the next step from there is it becomes commerce. It used to be that there was a cascade from the brand to maybe a distributor, to maybe a wholesaler, to shop manager, to buyer. Now it’s a straight shot. The other new thing in digital marketing is called native, where the line between content and commerce starts getting pretty blurred, but in a good way. The old school way to look at that is fashion magazines. The ads are part of the thing you’re buying the magazine for. That’s pretty cool. In the same way, an article might be talking about travel and it just becomes really easy to get off there and catch a video on the place you’re looking at. I think those are the cool areas of digital marketing now. Then there’s where most of the money is, which isn’t there yet. Those are more on the edge. Where most of the money is, people making the money are mostly Mountain View. It’s Google, right?
4:53 Google ads, search ads. When you’ve got somebody with intent, they’ve typed in rental car, berets. You’ve already solved half your problem. You’re not broadcasting. You’re really nailing that. They really got that well. Agencies and individuals who can help do that marketing may be more qualified or less qualified than you might think, but Google just does a pretty good job of getting what’s called direct response. It’s hard to beat that. Most of that flow through because there’s been a lot of competition, because Google does make it easy. The margins have definitely gotten a lot tighter for those agencies. You’ve got to be doing more interesting stuff like retargeting through display ads. You’ve probably clicked on something and then that stuff stocked you for weeks across every website you go to. There it is again. No, I already bought it. Stop. The reason that people do that with the display ads and retargeting with companies like Strap and Criteo or Criteo, however you want to say it, is it works?
6:04 You have to see something like seven or nine times. Isn’t it like 10 touch points or something before you buy it? I don’t know. Is that accurate? Well, the touch points, yeah.
6:13 Does it change now because it’s digital? Yeah. It hasn’t changed. The touch points, when you talk about it that way, it could be I read an article about this new camera. Then I saw it in a display ad. Then I saw it in a blog. Then my friend mentioned it. Then I bought it. That’s the touch point approach.
6:39 The other way you can shortcut that is I went and browsed it. Now it’s following me. It’s like a zombie. It’s on my Facebook. Do you miss that whole side of digital marketing or did you run its course with what you did and you want to now look at other things that you like?
6:56 I love it. The reasons I love it are that it keeps evolving. The other reason is that it’s one of those things that here in London, we can wave the flag. Actually, it is some of the most advanced tech in the world. It’s right here in London, which is pretty cool.
7:16 Part of that is because the UK has some of the most advanced adoption of e-commerce. It’s the highest e-commerce expenditure per capita in the world. By no degree of accident, it’s also the highest amount of digital marketing spend per capita. How far ahead is it? I haven’t looked at it in a couple of years, but it was over Europe.
7:51 Crazy higher, like 2x. Although Germany and stuff are starting to move ahead. Two years ago, it was 2x. Over the US, maybe it’s 10%, 15%. Is that because the UK consumer is more wealthy as well, has more money to spend, or they just get targeted and also spend more online?
8:10 It’s because of the awesome infrastructure of BT. No, the real reason is because it’s, in my opinion, and there are lots of reasons why this could be. It’s a big enough country in population, but it’s small enough in terms of delivery. You can get stuff pretty quick. Then part of it is that as much as BT can be a pain and things like that, it’s pretty wired country. Still slower than it ought to be and stuff like that, but not bad.
8:41 The third reason is that Google did an experiment here where they really subsidized agencies. If you look at the US, brands tend to run their own digital marketing more than they do in the UK. The agencies are the pros, and they just do a really good job of it. London’s always led the world in entertainment, and they’ve always been good at advertising and marketing. It’s nice to see them levering something up from the digital side, like we’re seeing in FinTech as well, as opposed to trying to copy or trying to play second fiddle.
9:16 Something we always talk about on the show, people to complain about the lack of exits and the lack of big public exits, and cash generating exits that creates the next, the PayPal’s that create the next ventures, et cetera, et cetera, here. Do you think marketing and advertising is kind of one way where the UK can compete? It is, and part of the interesting thing there is that you can, here’s why. There are lots of disadvantages to be in London, but there are some advantages. There really should be more exits, and we can talk a little bit more. We were talking a little bit before about some of them, probably why not. Some advantages are, again, going back to the size and shape of the market. London doesn’t have as much media as LA, doesn’t have as much tech as San Francisco, doesn’t have as much finance and advertising as New York, doesn’t have as much government as DC, but it’s all in one place, and that’s powerful. You can create the buzz with the press in London that reaches across all of the UK. It’s still not as free-flowing as it is in the States, but the easiest and best access to intelligent investment is here in London. You can get the quality of technology people out, an investor in a couple of companies that are based in San Francisco or that were, and keeping your tech talent is just a real hassle. Facebook’s vacuuming it up and paying lots, and they’re negotiating over if they want wheat or corn tortillas on their free
11:02 Burritos. It’s hard to compete with them. You got some damn hungry Hungarians and pretty smart Romanians and stuff. They’re pretty stoked to be here. Yeah, that’s a good point. You have that whole talent pool that’s not restricted for visas and all that stuff. Then the last and obvious thing is the language. Companies I’ve been involved in, several of them, be they’re passive or active. They have this sandbox to work in here. It’s not as big as the US, so it doesn’t scale as fast. Nothing like it, but boom, then you get something that’s working. You can roll into the States.
11:36 Language-wise. Have there been many successful UK to US transfers? It’s tricky, right? There have, and there are, but I think a lot of them are work in progress. It’s slow development still, right? Some of the ones that I’m invested in or friends with, you’ve got Skimlinks, where most of the revenues are actually US-based and a lot of their activities, but their home is securely right here on the roundabout. Conversocial, similar. They’re really driving into, they’ve figured out how to structure social media support for enterprises, and now they’re rolling that into the States. Struck, which I mentioned, they’ve got the retargeting going over here, and now they’re rolling into the States. All of these are kind of a B-round kind of plays right now, but they are definitely rolling their revenues into the States side.
12:40 Your accent is very familiar, and we’re all from North America here. It’s interesting, because if you talk to an American, there’s always a story why they’re here, because you can’t just roll up. I don’t think Brits know that or Americans know that, but you can’t just roll up here. You need to work visa and everything to get here. I was wondering, what are you doing here? Second of all, you must travel to the States a lot and go to the Valley and go to the Alley. What do you love and dislike about the London when it comes to the texting? You mentioned a few things before, but first of all, what are you doing here? How did you get here? It’s kind of random. It always is. It was random, and then it wasn’t. I guess the first time I came here, I was in Brazil. I was pretty happy. The real crash, the currency. I had another offer, so I was going to leave McKinsey and go and do something anyway, but I thought that would be a good opportunity to consider other things. This is 1990s. This is 1990. It was actually the end of 1998, so the beginning of 1999. My best buddy from undergrad was a VC here. He said, man, there’s money that’s looking for entrepreneurs, and there just aren’t enough here. Why don’t you come over? Let’s just figure something out. Internet, 99. You could really feel the wave. You knew it was getting pretty ridiculous. I looked at California, and I’d been looking at the Internet since like 1994, 1995. That was my plan. I got kind of distracted
14:10 Into Latin America, which was interesting, but I’d always wanted to plan to get involved deeper with the Internet, and in California, it was just not so. I remember the thing that kind of pushed me over the edge was there was a dot-com startup, true style, and they just couldn’t find enough ways to spend their money fast enough. It was a blimp over a football game in San Francisco, and I’m like, that’s some unknown random startup, and I’m like, really? Have you read the book Burn Rates? I don’t know if you’ve ever read that, but it was like people would brag about their burn rate. If it wasn’t big enough, they couldn’t get the investment, because you won’t spend enough money. Exactly. You’ve got to go all the way. You’ve got to go for it. It was crazy. We did the challenge. We literally showed up. Our idea was to copy paste something from America, but it went through like 450 ideas or business plans or companies that were IPO-ing or whatever, and I just didn’t think they were credible. If I look back, I think we probably overthought some things too. We often didn’t do things because we thought the incumbents would come and kick our ass, and you look at it now, and they still haven’t done some of it. We really should have done easier things. In a lot of ways, we decided to do what we ended up doing, in part because we literally had a speech. It was like, we’re going to do it because it’s hard, and nobody else will do it. It’s like, let’s do it at a place with
15:36 15 languages and seven currencies, and really make it difficult, just because that way nobody else will do it. In retrospect, maybe better to keep it simple. A little overthinking. Just play the game better than then. Or just be faster. I’ll tell you what we ended up doing, which was it’s still the market leading business in what it does, which is industrial asset auctions online. Our idea was think eBay, but bigger. Big ticket items. Some of the things we got to do was driving dump trucks the size of a building, and we’re asking them off online. Cranes, but then also packaging machines, metalworking machines, things like that. Part of the reason was because we thought cars, car auctions, yeah, but that’s just too easy. Somebody else, the incumbents will come and crush us. It was pretty crazy that we ended up building our business up and listed it in 2006, but I was looking in 2008, and they still hadn’t really sorted it for the car business, which is so much easier.
16:49 How did you get to London? Visa-wise and stuff? Or should I not bring that up on the air?
16:57 I did a pretty classic mistake. I got to customs and they said, you know, what are you doing? I was like, just unemployed. Yeah, that didn’t go well. Slam, slam, whoop, whoop, whoop. They talked to me for a couple hours. Finally, it was like reasonably credible that I had enough cash that I wasn’t going to be a burden to society.
17:25 Then I got another passport. The next thing in America, you can get a spare passport. All the markups I did in mine just didn’t do it. I just made sure I was gone. Every few months, it wasn’t like I was being paid. We just did the startup bootstrap, literally lined up on three browsers, credit card applications, and hit them all at once.
17:50 Hopefully, they wouldn’t have the most up-to-date credit history and levered up, put in some personal cash. We put $100,000 behind the business to get it started between me and my business partner. Then we were just working in a friend’s flat in West London. Then we started getting a couple interns. We had another idea. We were like, hey, you’ve done your business school internship at Morgan Stanley or Goldman.
18:24 Now come and see how real business is. We got these great interns. We got seven interns. There were three of us and seven interns. They were awesome. We were just cranking.
18:33 We had whiteboards everywhere and cables. My friend came home two days early. She just said, what the hell is going on here? I was like, you’re not supposed to be here yet. It’s like, this is my house. Look, I’m going to take a walk. I want this place the way it was in 20 minutes.
18:51 We had just heard from this other .com that had been backed by Atlas Venture that they had found some awesome space you could rent by the week in Truman Brewery way out east. We literally didn’t have anything else to do. We loaded up the taxi with all the computers and cables and came out. Then one person staked out the stuff while the other one kind of said, also, is it true? We can get this by the week. Some wacky Israeli that had bought the place.
19:22 That’s right around the corner. This is like 2000? 99. This was July 99. How much was rent for a week? I don’t remember.
19:32 I’m telling you, bathrooms didn’t work. In the winter, I remember people had those gloves with the holes in the fingers because they were freezing and you could see your breath. Was there any tech in the area at all? There were a few of us. There were some trance music guys and kind of an ethnic-oriented modeling agency and two startups.
19:57 One was called Click Mango and ourselves in the building at the time. That was the beginning of that tech hub. I was in the city then. You would never walk up to Shortitch back then. You would never go. I remember sometimes we would send kids to the Rivington to get burgers, but it was not an option to hang out.
20:16 People don’t know. It’s probably less than a mile away, but it was just a neighborhood you wouldn’t go into even though it’s right next to the financial capital. Now, obviously, Shortitch is a tech capital, but you’ve seen it for 14 years evolve. What have you seen happen and where is it going? One of the things you learned is that up and coming is an awesome phrase, but it sometimes takes a lot longer than you think, and then all of a sudden it happens.
20:47 In order to not have a commute, we just found a place right next to it, which was this cool 1724 Georgian house that we had eight people living in. You don’t get that in Millbrae or Mountain View, that’s for sure. What we saw evolve was it went from Spitalfields, which had the little card table market to really high-end, lots of glass and concrete. In some ways, that’s a little sad, but it’s also nice. It’s pretty stylish now.
21:24 I think it’s gone from a theoretically cool place to live, but you had to walk half a mile to get to an ATM, to a really awesome place to live. To me, I left there in 03 and was surprised when I came back in 08 at how much it had evolved. What was missing about London to me was that New York sense of just bumping into people, having different kinds of people, different walks of life in the same space, in a kind of convivial place that you can talk to people, coffee shops, stuff like that.
22:10 I was really thinking about moving back to the States and the evolution of East London being more of a convivial, close-knit place is definitely a lot of what’s made me stay. It’s funny, we’ve heard that before. Density is actually a factor in innovation, right? It’s counterintuitive because with all the social media and all the online meetings and stuff these days, there’s these companies in the States that don’t have a physical address, they’re just collaborations.
22:37 But everyone we’ve spoken to has sat there and says that you need a physical density of people and ideas in order to generate new ideas. You have to be on top of each other and looking at each other. Do you agree with that? I do. I think not every day, not all the time.
22:54 But you have to have that sense of community and that sense of community you initially get by spending time together. Then you can be a bit more spread out and communicate every day, but you can’t beat that human vibe. What do you think we’re going from here? Is it kind of ramping like you said? Is it finally climbing or do you think we’ve got a lot further to go as far as the area build up and stuff?
23:25 I think the building you were in for a long time you said is going to be torn down soon on the roundabout. I’d love it if you even gave us a little brief history of the roundabout because I walked around here for two years and didn’t know what was going on tech-wise, and I felt like a real dork. I remember when I was living here, and here’s the thing that kind of sucks to say, but it’s a really ugly roundabout. Jesus, don’t get me started. And then they built this luxury high-rise next to it, like the Bezier building.
23:55 I looked at one of the flats. I mean, the top penthouses go for probably a million and a half, and it overlooks the probably ugliest roundabout there is. I thought for years I’d just love it if they could just put some turf over it or something. What is in the middle, though? It’s a tube station, really, right?
24:11 You can go in there. But there aren’t plans to redo the whole thing. I hope so. I think there are in like five years and put a theater in there and all those crazy stuff. But anyway, some people, some of my near and dear friends are both part of, we’re part of, or massive critics of Tech City, TCIO.
24:36 But I think one of the best things I can do is really just make it a nice place to live and work. You get the good designers here and the programmers here who just want to be here. And a lot of the government stuff around visas and taxes have kind of let a lot of the natural factors after that do its work. So give them the wheat tortilla option. I mean, things do need to be nice around here.
25:00 You need to have decent facilities to attract people. Yeah, I’m telling you. Like you look in San Francisco now, and the valley, which is where so much was developed, it’s really boring. And everybody wants to be in the city now, on Market Street, Mission and things like that. And similarly, that’s where here.
25:18 It’s just, it’s got a vibe. It stays alive. It’s kind of interesting. So I think that’s cool. But yeah, the building is pretty cool because there’s a little history there and that is where this whole kind of silicon roundabout came about, which was- When was that term coined?
25:33 I think it was 09 and I think it was a telegraph article, something like that. Okay, so reset. There was moo.com and Last FM, and about three or four, and it was a handful, like maybe six, eight, nine, if you really stretched companies. But those are probably two of the best known ones that were right around there. And somebody in the press kind of coined it that, and everybody hated it.
25:59 Really? You’re just copying the valley. Why do you have to be like that? And why do you have to be like that? And who cares what the pundits say.
26:08 People used it. People like it. Works. And then Tech City, the government tried to rebrand it. It’s Tech City.
26:14 It’s not the roundabout. It’s too small. I’m screwed. It’s the roundabout. Because Tech City is like a greater area, is what they’re trying to do with that.
26:20 Okay. So you worked at that building as well. I did. So it was pretty cool because I’m lucky enough to be chairman of a company called Skimlinks, which Alicia Navarro and Joe Stepniewski started. And I was literally looking at the contract, and I said, well, this is really great, but there’s a decimal area here.
26:40 It’s like two pounds, 50 a square foot. And Latitude at the time was in Soho, paying about 55 or something. And they said, no, that’s it. Well, that’s the intro rate. It doubles in six months.
26:52 I literally stepped out of the board meeting at the end of that, called the agent, and moved in within two weeks. And because of the thing is that Mu was there under threat of being kicked out when they would level the building for six years, when they finally moved out. And, you know, we were there for like three years. You know, if you can do with the uncertainty of being shifted out, then it’s great. And it’s a great startup maneuver, I think.
27:22 But the effects, and you’re seeing it here, are that the startups and the artists that were finding these kind of cheap flats and stuff like that, there were a whole bunch of them. And then Edit did move next door, and C can’t move next door. And, you know, a lot of these places, you know, you really start building that hub. And then you started bumping into, you know, Mike Butcher, Tech Crunch, or Robin Klein, who’s, you know, awesome investor, my hero. All these people.
27:50 And you just bump into them, and you start talking business and pleasure, and you build these relationships. And it was because of it, it was pretty cheap and pretty easy to get to. But now, they’re leveling it, and they’re going to put a big expensive building there, and shortage rents have gone up, and so things are moving. Most of it’s moving east, but some of it’s actually moving, you know, back kind of clock and well. I like what’s going on at Warner Yard now, too.
28:15 Yeah, there’s a bunch of seed places that are moving kind of back the other way. And so, do you think this area’s going to get priced out eventually? I mean, do you think all the mountain view companies are going to be here with, like, their headquarters, or do you still think it’s going to keep, you know, that kind of homegrown vibe? I think it’s already happening, right? But hopefully, the companies are scaling to it, too.
28:37 And, you know, so, you know, Google put in there a bit over in King’s Cross, but, you know, if you’re Cisco, or, you know, I mean, these companies, I know, actually, I remember I was talking to the guys with Zendesk and Yammer, because, you know, the friends from the States, you know, where should we be? You know, East, they looked around, you know, it looks like crap, right? So they put it over in Soho. We can’t get good salespeople if we’re over there. Boom.
29:05 You know, a year later, they moved over here, because it’s got the momentum, right? But when the Yammers come in, bankrolled by Microsoft, then it pushes the start-up guys out to, you know, Hackney or Hackney Wick, or which is, like, the really funky stuff, or, you know, it’s a natural process. Yeah. And then we’ve been over to the level 39, and, like, that’s kind of like the extreme area there, but there’s so much more room to grow kind of East. Now, you’ve been angel investing for a long time, and I was just wondering, I don’t know how that’s gone, how you kind of manage your portfolio.
29:40 Are you still looking for investments, and is it harder today than it used to be? Cool. Lots of questions there. You know, first off, I really am thrilled, because I got lucky. So with Go Industry, this 1.0.com, we managed to raise our cash just after the crash, a big slug of cash, and then we were able to be sensible, not listen to the prevailing theory that the faster you burn, the better you are.
30:12 You know, we used the money to kind of buy some companies, build up, and then we ultimately listed it all in aim in 2006. So that gave me a little bit of time, thought about what I’d do, thought about moving back to the States, go to India, go to China, and decided that, you know, there’s a great community here, but it was nascent, there was lots of learnings, but, you know, lots of good assets, and it was just one of the nicest things you asked me earlier when I go back and forth to the States. What do I miss? What do I like?
30:46 You know, I used to beat myself up a lot, because, you know, hey, companies are bigger and they grow faster there. It’s a true fact. Yeah. But when you are working in the web in San Francisco, you know, you and whose army, right? I mean, big deal.
31:01 You know, there’s not that community feel. Whereas here, people aren’t really trying to help each other out. It is a community. You feel, you know, it’s like the old American TV show, Cheers, you know, you go in, everybody knows your name, it’s nice, you know, it’s friendly. And there’s something to that.
31:16 And yet there’s still some opportunity, and there are companies like Spotify that, you know, London borrows from Sweden and stuff like that, but that are building up and making names. But back in 07, it was still kind of potential, and I thought, well, wouldn’t it be fun if I could be a very small part of that? And Saul Klein, just at the time, had started moving from these kind of weekly coffees to the idea of having an accelerator, a seed fund. And so I invested in that and got very heavily involved and was on the initial board there.
31:54 And that gave me, you know, great opportunity, worked with Rushma, who was the CEO there, and got to see hundreds and hundreds of startups. Okay. What was the company? It’s called Seed Camp. Oh, Seed Camp, yeah, of course.
32:06 Yeah, yeah. We’ve got one of the guys coming up in a few weeks, and Carlos is coming on. Yeah. And that, you know, for somebody who was new to the game, you know, you get the important thing, I think, is you get pattern recognition. You see hundreds of these companies.
32:20 You start seeing, you know, founders and things that kind of work. And in that initial batch, I invested in Ed Spiegel. And again, you know, it’s names, it’s people. You know, the concept changed twice. It was collaborative consumption idea back in 08 that just never had a chance.
32:37 So he just pivoted a couple of times and got something that was getting people in the flats. And he sold it. We couldn’t get any VCs to put money in. So with 200,000 pounds of investment in it, we just had to live on, oh, revenues. And he made it work and sold it for 10 million.
32:56 And when you only put 200 grand into something, that’s a nice exit. But it’s not the 200 million one that’s going to fuel the roundabout, right? Yeah. And then he moved to the States. But other ones in that batch, you know, Ryan Knotts with my builder and that one kind of built up.
33:17 And then through some of the seed camp pieces, I invested in 10 companies in total. One of them mines and nine, not mine. And only one blew up. So some of them are still, you know, they need to make their way. But, you know, I would say the main thing is you learned that it’s about people.
33:39 And keep hearing that over and over again. It’s our tagline. Yeah. That’s funny. It’s our tagline.
33:45 And like, I’ve asked people like when you, you know, how much is the product and how much is the person, you know, when you go to invest in a company or hear a pitch. And I might as well ask you, like, what’s the percentage breakdown? Or I guess you just kind of answered it. I mean, what do you look for when someone comes and pitches you? Is it really just a job interview in disguise?
34:02 It depends on the phase, for sure. I think when you’re talking super early stage, and for me, you know, my, my quantum’s of capital are pretty small. So the only way I’m going to, you know, get any interesting return is to go pretty early where you’re hopefully getting some pretty solid standout returns. And at a very early phase, you know, things could change a lot, you know, and you need people that you’re trusting to be able to adapt and evolve. The later stage you get, the more that you’re looking at traction, you’re looking at client base, you’re looking at, you know, that product.
34:40 And the product’s ultimately a result of the people. And did you ever want to get more involved in, like, later stages? Have you ever thought I want to be a VC guy? Or it’s funny, we had, like, Raj Ramanandi on here, and he’s like, once it gets above 20 people, he gets bored. You know, once it gets to where you have a marketing plan or whatever, he gets bored.
35:01 Is that you, too? I love it. I love seeing the evolution. And, you know, let’s make no mistake. I’d love some of the anything I invest in to be Facebook sized or Google sized.
35:15 I remember looking at Facebook back in 089, looking at the team as they were moving into Europe, and I’m like, man, I must kind of suck to be, you know, the appendage of, you know, an American company. And then you look at how monstrous they became and the guys that were, you know, the people that were there early, and, yeah, they’re pretty happy. So, you know, being part of something much bigger, I think it can be awesome as long as it’s a cool situation.
35:42 But it is exciting in that early stage, and that’s where a lot of my strength is. You know, I’d say it’s between, you know, companies I’ve built, I guess where I’m lucky is, you know, built from scratch, a couple companies, and scaled up to, you know, 300 or so employees, run the latter two, it was like 150 or something like that. So I’m happy with that initial stage, and I can have, I’ve got a decent amount of experience trying to help people get, you know, fundraising and stuff like that, not like that.
36:13 Then it’s about HR and hiring, and then it’s about, you know, going to market, getting that next round of financing, ideally it’s revenues, sales, and then it’s about structure and global expansion. All those phases are exciting. So I can’t say that I don’t wish, you know, some of them grew to 26,000 people. Right. It could be kind of fun.
36:39 What am I missing, Colin? Yeah, well, I guess, you know, it’d be great, we talk about the people, and I don’t really know the story of ICE or how that got going, and obviously you felt a need to sort of put some great people together and make, you know, see what happens, so maybe you could tell that story a little bit. Yeah, that’s awesome. To be honest, it’s not like it was a plan. That’s a really, you know, intriguing organic story that really came from a lot of people, and when you get a lot of great entrepreneurs together, things happen, right?
37:12 You know, you don’t have to kind of plot it all out. You get evolution and people chipping in. But back in 2009, I was trying to decide, do I want to go back and do another startup, or did I want to just kind of stay on the investment side? And it organized a ski weekend of a bunch of investors up in Verbier. Love Verbier.
37:34 Yeah, it’s beautiful. We had a ski trip every year when I was at ICAP. So five years in a row, I just went to Verbier for the weekend, and that’s all I ever saw. Come on back. I’ve never compared it to other places, but it’s up there, right?
37:49 Yeah, it’s some of the best skiing in the world, and then on a more superficial basis, it’s south facing, sun shining in the afternoon. It’s great. Yeah, and a good vibe in the town, right? Yeah, it’s a walkable town. It’s a Swiss village.
38:03 It’s cute. Yeah, sorry. You were saying. But anyway, you know, and it was a nice weekend with a bunch of investors. And then, you know, I was chatting with a real new kid on the block in town who was at Josh March, and he said, well, hey, you know, can you help?
38:19 I’d love to organize a weekend for entrepreneurs. And, you know, he chipped in, and the two of us were like, what are we going to call it? He’s like, well, you know, it’s in Verbier, and it would be kind of fun to make it something cheeky. Well, let’s call it Vice. But then we have to figure out what the acronym means.
38:37 So we came up with International Conclave of Entrepreneurs. Vice. And it’s evolved to be ICE today, which is… The V was Verbier. The V was Verbier.
38:49 And it was 29 entrepreneurs. And most of us kind of knew each other, but not amazingly well. And what we found almost immediately was that there was, you know, and most of us had to be torn away from our work because we were all doing startups of various shapes and sizes, but mostly between kind of Bootstrap and maybe Series A. But it was super cheap because most people just crashed in my chalet and then we got one next door. But what people found right away was, holy cow, I’m spending all my days, you know, bottling up so much stress because I got to pretend to the staff that everything’s just fine and try to be mature on the job and grow on the job and do a good job as the boss.
39:41 But then I got to talk to the investors, and I’m going to make them think everything’s just fine. And then I go home and see my partner, and I can’t always bitch about work all the time, so I got to bottle that up too. And then all of a sudden you have to pretend at home that everything’s just fine. And say fake it till you make it. Yeah, totally.
40:02 This is the greatest breakdown of an entrepreneur you’ve ever had on the show. This is what you get to do. And the great thing was everybody first thought, you know, nothing like some Jaeger bombs to really get the show on the road. And then second, people just really being able to be honest and just, you know, this sucks. This crisis and this challenge, and then people, oh yeah, I had that problem.
40:26 Here’s an idea. Hey, you know, have you talked to these guys? Have you tried this software? And on the ski lift or whatever, you get a little bit of away time. You’re forced out of your natural environment.
40:40 And, you know, really sadly, but quite vividly, there was a tragedy. One of the guys actually, you know, crashed and died at the end of the trip. You know, a lot of us were already gone. And it was horrible. Just like a tree or into someone else?
40:58 The visibility went to zero, and they just got lost. It wasn’t like an active crash, right? But they got lost. And then it’s a longer story. But, you know, that really brought everyone very tightly together.
41:16 And, you know, you think about, you know, a year later, we’re all dealing with our day-to-day stress. We’re still pretty freaked out about that. And somebody said, yeah, you know, it would be great if you can do it again. And I was like, are you kidding me? And they’re like, no, man.
41:35 It’s like the last thing you think you’d want to do. Yeah. And I was like, you know, first off, we’re all just crazy busy. And second, you know, how do we deal with the process? What happened?
41:48 They said, you know, and it was Guy Simon Proctor actually, he said, well, I can help organize a lot if you want to do it. Sent out an email. And within half an hour, you know, everybody, not quite everybody, but like 20-odd people were already back on the program. And, you know, from there, I went up to kind of 55 people, and it became really tight. And, you know, we really miss Rob, who died, but on the other hand, part of that was a catalyst to bringing us all really tightly together.
42:27 And it’s been unmatchable. I mean, we had weddings and kids, without weddings, and, you know, lots of, you know, great friendships and companies that have come together and companies that have busted up, and, you know, it’s almost like, you know, having people, you know, people in your community get divorced and you work through it, and everybody’s okay. And you see the evolution. And back then, like I say, it was pretty scrappy. But now you’ve got, you know, amongst them were, you know, Michael Acton-Smith, who was on his last, you know, chunk of cash, turning to his investors and saying, I got this new idea.
43:07 Which turned out to be Mushy Monsters, and you have, you know, Andy from Huddle, who also had, you know, pretty challenging situations that year that now it’s become a, you know, great business. And Ali was there, actually, as well. You know, folks have, you really get a nice set of perspective. And some of the people’s businesses haven’t worked out, but, you know, they just pick them back up and they keep charging. And the big piece of it is everybody helping each other out, and everybody caring about each other as people, as well as their business.
43:42 It’s not, you know, your card is part of it, but it’s only part of it, right? Yeah, you said that, I think, you said it’s important for everybody to get to know one another and then be there for each other over time. And you stress, like, physical contact, don’t you? Like, let’s really get together. Yeah, and that’s part of the, you know, one of the problems is that we feel, sometimes maybe it sounds like a, there are about 150 people in the group now, and it’s mostly founders, but also some VCs and other kind of ecosystem supporters and journalists, you know, David Rowan from Wired’s pretty, you know, very helpful and interested.
44:24 But, you know, the Dunbar number concept, have you heard of that one? Yeah, well, if you could explain it really quickly, Yeah, it’s a vague number, nobody knows what it is, but it’s the point in an organization when everybody’s part of a community versus being part of silos of different communities, right? And, you know, he estimates it’s between 100 and 155 people. I don’t know how he comes up with the number, but we’ve kind of stuck with it. Because, you know, first off, you have to go on a trip to get to know each other, but then when that email comes through and says, hey, you know, I got visa problems in New York, anybody got any ideas?
45:04 I’ve got this, you know, this term sheet term, sounds a little wacky, any experience with that? You jump and you help them because you’re part of that community. So, you know, we do try to phase some of the folks out that are less active and keep making room for more. And the application process isn’t like, oh my God, you know, you’ve raised 20 million, you’ve done this. It’s also very much, I think it can be most helpful for people who are just getting started.
45:33 Because you’re suddenly in there with a lot of access to experience and knowledge, you know, and whether the companies have become multi-hundred million plays or not, the people in that group have built up some experience and love to share it. And you always have this annual ski trip that’s like the minimum event or do you have other times where people get together? It must still be hard getting guys together for a ski trip in Switzerland. Not anymore. Not anymore, okay.
45:57 So, the last ski trip was 80 people. So that was pretty cool. And we decided to kind of do some things in the summer. And we went to kind of, you know, Croatia and Sicily. And then last year, just had this idea, wait, what if we go somewhere where there’s people on the other side?
46:20 In tech. And so we went to Israel. And it was amazing. I mean, they rolled out the red carpet, you know, they were great technologists. Yossi Vardy was awesome, you know, meet the president of the country.
46:35 One of the entrepreneurs that really made it decided, yes, I think you should see Israel by helicopter. So it was like, yeah, but there’s 45 of us. Okay, a sortie of helicopters then. So it’s definitely kind of expanded at scale. But again, what we do is we really work to make it cheap so that the bootstrappers can make it as well as the people that are doing all right.
46:58 And the next one, we’re going to Africa. And we’ve also really been pushing to a new initiative, you know, inspired a little bit by, like, Scott Harrison from Charity Water and a few others say, you know, we’ve got all this energy and ideas and experience. How can we make that something that’s impacting, you know, impact organizations? So we’re going to Africa the 15th to the 24th of November. Okay.
47:23 Do you do something with Scott with Charity Water? Or are you just kind of looking at his model? Looking at the model, some of the people, some, and the power of ICE is actually the individuals all just doing their bits. And so Pete Ward from Wayne and Rick Rosenblum from part of my dog are putting together a bash, Thursday actually, tomorrow. But for Charity Water, and we’ll hopefully meet some of them down in Africa, but nothing, you know, super formal.
47:51 Okay, and if people want to become a member of ICE, how do they do it? Got to just, because it’s a people network, get to know a couple of folks that are in it. The website is iceless.eu. You know, tell us a little bit about yourself in there, and then you got to come on a trip. Okay.
48:12 I’m going to hit you with our advice question. We ask everyone that comes on here. So, so here you go. If you could make a phone call to the 20-year-old Alex Hoy, and why would you have been at Stanford at the time, right? I think you were at the 29 or something.
48:26 Stay there! Stay there! Before the internet existed. That’s Steve Jobs? He knows what he’s talking about.
48:31 Find next. Yeah, and give him some advice. What would you tell that guy? That’s really interesting. I think, you know, a few things.
48:41 One other thing that’s, I’m a little bit contrary to a lot of the prevailing attitudes right now, which are, you know, the idea is, year 16, 17, 18, 20, 21, 22, drop out, start your company, you know, go right away. And I was, I’m, everybody always filters everything from what they’ve done, and I’m doing that, so you can just ignore it if you want, but I’m like, ridiculously blue chip, you know, McKinsey, Harvard, Stanford, whatever. I think the values of those entities has changed, and maybe it’s more Google, or, you know, like in Huddle, or something like that, but I think it is good for people to go and work at another company and learn from what good, learn what good looks like from somebody else.
49:34 And so I did that in a lot of ways, and I’m pretty happy with that. As in, like, thousand plus employee good? I don’t think it has to be a size of employee good, but, you know, we were talking about it a little bit before the show, and I think, you know, some of these institutions between, they harden you up, they challenge you, you know, everything’s not, oh yeah, all ideas are good, and sometimes it’s bad, and you just need to be beaten up a little bit, right? So, one thing I would say is that I wouldn’t change, you know, building a base.
50:07 I would have probably said, yeah, I was looking at the internet in 94, and, but I decided, well, I’d go to the east coast first, and then come back, and then I ended up in Latin America, and then in Europe, and, you know, it’s been a great trip, I don’t know, I think you got to experience it all. Yeah. It’s hard to… Just look through it. Yeah, I mean, it’s interesting, you can give that guy advice, but, you know, the guy giving him advice is the guy that lived through all that stuff.
50:44 Yeah, I missed a lot of that. Yeah, the failures too. On that same note, what’s the best advice you’ve ever received? You know, I mentioned them earlier, but my favorite person in terms of companies and stuff is Robert Klein, or Robin Klein, and, you know, the advice he tends to have is all about, you know, really focusing on building something that will be unique and grow and invest in getting the right people. So, that’s nothing near exciting, it’s just hard to do sometimes.
51:29 Is that like, don’t focus on the numbers as much and focus on something that really adds value? I think, you know, I was definitely a victim of it too and probably focused on, you know, in Europe, a little too often we do focus on the revenue to prove them all. And sometimes you do have to just get the numbers up to make it relevant, you know, I think, if I look at what I would do differently, you know, make something that can be big, you know, it doesn’t matter if it, you know, ideally it doesn’t cost insane amounts of money so that you don’t have to, you know, sell your soul and all your equity to get there.
52:09 But, you know, make something that’s going to make a difference. Be bold. I really do look at folks that have done things I haven’t done for sure and, you know, like, like Daniel Eck. I remember when he came and talked to me in 2009 and said, you know, we’ll just do this, you know, break into the music business. Wow.
52:30 Good luck with that man. And, you know, look what he’s done. He was bold. You don’t do something bold, you know, you don’t, you don’t try, you don’t win. You’ve already kind of given the last part of that question is the advice to the 20 year old listening and you’ve given a bit of it.
52:44 And it’s weird because like we do this show and we feature all these successful people, don’t we? And so like anyone watching is like, yeah, yeah, I’m going to move to the shortage and start my company and quit school and all that stuff. You kind of say, go ahead and get that Ivy League education or get that three year degree here in the UK and then go ahead and work for a corporation for a few years. I mean, is that kind of advice you give or not such a bad option, that advice?
53:10 You know, look, if you’re Bill Gates, you know, you’re an idiot to stay in school, but most people are. So many of those stories though, right? Zuckerberg. As a percentage, they’re so small. So it’s like, yeah, unless you’re super genius, who’s got something, like go, go work for someone.
53:30 Yeah. And I, for me, it’s not necessarily a thousand person, but it’s just have the boss. Yeah. First step. Okay.
53:39 Yeah. Yeah. Sure. Sure. But even just being told what to do, because a lot of founders and younger kids, they just, they’ve never been told what to do maybe other than by their parents.
53:51 So they go try to start up a company and maybe, you know, they leave the office at four one day. Well, and if you work for someone who really rode you, you know that, that’s not, that’s not going to work. That’s not, that’s not what’s going to get you to where you want to be. Yeah. I think, you know, I think get the university education, but there’s nothing that says you can’t do some side projects, man.
54:14 You know, I started a couple of businesses in school and university and, you know, I learned a lot from that, but never confused that with, you know, the fact that I, that wasn’t my, my primary objective. And then, you know, get that experience with some people that, that are, that you, you respect. I mean, I ended up, my first job, I had gone to a speech that Jeffrey Katzenberg was giving. And it was just, you know, he’s a hard ass and he was, you know, really bright and changed the way, you know, Hollywood worked in a lot of ways.
54:52 And I pursued every angle. I slipped my CV under the door of the, the interviewing people that were on campus that day because I’d missed the deadline and that, because I didn’t think I really was interested in Disney. And then I found out, well, actually these guys are pretty inspiring and tasted. And that’s, and I learned a lot from these guys. So, but what I would say, you know, and I was just asked the other day, would, you know, MBA, no MBA, you know.
55:19 I think if you know you want to go to, you know, an MBA is a great place to hatch your next, you know, a project. And that is a good place to build a business, but then just recognize you’re probably going to have some debt. So you might be better off to just, you know, go straight. But I would work with another company for a little while and get some experience. They say Harvard Business School is all about the network.
55:39 Totally. Yeah. Is that totally true? Not only. That’s short changing it a little bit.
55:45 I’ll be honest. I went because I thought it would be a lot of fun. And it was. But I learned more than I expected to. And a lot of it has to do with articulating.
55:55 You know, you’re forced every day for 200 days, over two years, to synthesize what a problem is, identify prospective solutions, and then discuss it. And that’s good practice. But, you know, the opportunity cost of, you know, it used to be that you had to go through that filtering process to get a job at a company that then you could work your way up to the Fortune 50. And now, you don’t have to. You can build your own business.
56:26 And so, I loved my MBA, right? And I made some of the best friends of my life, and I learned a lot. But I wouldn’t say it’s a necessity at this point. Did you do your MBA with a bit of a gap? So did you sort of do your undergrad, then work for a bit, and then do your MBA?
56:46 Yeah. And I definitely recommend that. Yeah, because you actually learn more, I think, if you’ve been out there for four or five years or whatever, rather than just jump from education to education. Yeah, definitely. Alex, we’ll start.
56:59 Yeah, go ahead, go ahead. And I guess in terms of the advice thing, it is a little challenging. What I tell myself when I was 20, it probably has more to do with girls than business. You can share that too. It’s all good.
57:11 Stay away from them. Don’t marry them. Yeah. But in terms of the, you know, Europe and how do we break out of the cycle of sub-scale companies and slow-growing companies? And I think part of it, you have to ask yourself and realize, and we look when we’re entrepreneurs and staring ourselves in the eyes, recognize one thing, man.
57:33 It’s hard. You know, it is really hard. You are constantly facing running out of money. You, in order to get scale, you have to start paying people and then they’re dependent on you. And, you know, it makes you grow up early.
57:48 And, you know, I look around and I’m working in a co-working space now. And it bums me out a little bit to see everybody gone. It’s like 6.30. Well, you know, I’m not. And I think you’ve got to recognize that it’s cool.
58:03 But there’s a lot of hard work and a hard slog to really make an impact. And, you know, it’s not just hard work. You also need to be, you know, work smarter, not harder. But you need to work harder too. Do you see that?
58:17 Is that like, if you fly to Silicon Valley and hang out in Mountain View and all that stuff, is that something that you notice right away? That people seem to be pushing in an extra gear or driving a little harder? There is a bit more, driving a little bit harder. I do think that there are countervailing benefits here. But I would love to see some of the work ethic just click up a notch here.
58:37 But that’s one reason that people with our accents tend to do well over here. No, I’m really glad you articulated that. You know, I think it needs to be said. We’ve heard different people say different things, you know. Two weeks ago, we had someone who said he leaves by example.
58:52 That was Steph the Hacker. And I understand where he’s coming from. Is that, you know, there’s a right and wrong way as a founder to drive your people and to expect them to have your work ethic isn’t always the best thing. But at the same, at the same point, you’ve seen a lot of different companies. So, that’s good about it.
59:07 Kind of like creative working, I think is really, you know, you put in the hours, it’s, you know, you’re not 9 to 9, maybe you’re 9 to 5 and hit the gym for 2 hours, grab a plate of tea, and then, you know, crank out a few more hours with a fresh mind. I think that’s sort of working smarter, not necessarily harder. I also believe in weekends, you know, and I didn’t take enough when I was doing my 1.0.com. But, you know, one of the, it is kind of nice in Europe that you can be harder working and yet you’re still taking more holiday than you are in the States and stuff like that.
59:37 And I think it does keep you refreshed. You can burn out pretty easy. And Branson said, you know, he said, what would you do differently? He was like, you know, hit the gym more. I think there’s something to fit body, fit mind, right?
59:50 Definitely. Alex, what’s next for you for the next, you know, next year? Is Faction keep you very busy? Are you looking at new investments always? Ice months take some of your time?
59:59 What’s next on your schedule? So, three things. One is, with Faction, you know, I built it with my co-founder, Tony, out of, you know, I was really passionate about the product initially and what I’m thrilled about. And the reason I stepped up in full time last year was because, you know, that changed in the way brands relate with people and e-commerce is totally changing all retail and this is no exception. So, building that with a lot more global, great marketing, great execution, is taking a lot of my time right now.
1:00:38 But it’s quite exciting. And, you know, we’ve got a long ways to go but we just shipped 20,000, you know, 20 tons of skis in the past three weeks globally. And, and yet, you know, we’ve got a long ways to go and it’s mostly about activating people digitally. So, that’s exciting. Ice is definitely important in that what I want to do is make it more valuable to the members and then start getting some of that knowledge shared out to the community and be part more, a little bit more impactful with the community.
1:01:14 So, so that’s a big goal. And then when it comes to investments, you know, I’ve been starting to get the flow back of a few and that’s been great. And, but I also realize that my, the difficult thing is my personal bandwidth. You can only do so many things. And, I, so, in exceptional cases, I am putting, you know, bits to work, but I’m definitely not looking for it.
1:01:39 Yeah, no, I mean, you read, you kind of read your background and it’s like, Jesus, there’s a lot going on there. And we all only have so much bandwidth. All right, there’s a, there’s a point I should have said is, yeah, let’s focus. I used to think I was great at multitasking. And I saw this quote that I really like.
1:01:57 It’s like, you’re not multitasking. You’re just doing a lot of things really badly. Jack of all trades, master of none, right? Yes. My last question is, do you watch the hit show Breaking Bad?
1:02:07 You know what? I saw the first episode. Okay. I’m the worst TV watcher ever. Okay.
1:02:14 So I just don’t watch it. Do you watch it? Yes. He’s Hank, Walter White’s brother-in-law. Much younger Hank.
1:02:20 Yeah. I’m telling you, it is, it’s you, you’re a character in there. Unfortunately, he was killed a couple of weeks ago. Spoiler alert. Oh, sorry.
1:02:30 Did I just spoil it for you? No, a lot of people. Are you from the Southwest or somewhere? I grew up between Idaho and South Carolina. So I used to talk a little bit more like this.
1:02:42 Okay. But then I lived in California for about seven years. So it’s kind of mixed around, probably like Southwest, kind of, to take all those places. I lived in LA three years. Hell yeah.
1:02:51 You’re a dead ringer for Hank on the show. So I was bothering me for the first few minutes and then I got it. You got it. Anyways, it’s a compliment. Alex, thanks so much for coming on.
1:03:01 Are you a Twitter guy? Or what’s the best way for them to contact you? Yeah, I used to be a Twitter guy. And I go 9 and 10. I was doing it initially to stay in touch with my family because it was kind of cool.
1:03:12 It was like, you could do it for free texts and stuff. And then I got into it and was running the agency. But part of my focus scheme, you know, it was a little bit, you said Tim Ferriss was there, but, you know, like trying to cut my information flow out and I just haven’t gotten back on that saddle much. But obviously, you can DM me and I get that. And so that’s…
1:03:33 If you follow them. If you follow them. Yeah. So people, they can’t really just DM me. No, then you’re right.
1:03:41 That’s what celebrities say. They’re like, just DM me. And then they realize that Jay-Z is next to me. I just got played. It’s like get the wrong phone number when you get home.
1:03:48 That’s true. That’s true. That’s all. You know, there is actually a phone number that you can, the girls can give out or people can give out. I heard this.
1:03:57 Where you call and say, hello, you’ve just been dissed. Exactly. I’ve just saved you a while ago. There’s nothing quite like that feeling when you get the phone number. It’s like something a woman will never understand.
1:04:11 That voice though, they should give you something in return to make you feel better. But if you stay online and complete the survey, we’ll give you a voucher. Sorry. It’s $50 off. You just did it.
1:04:20 But just Alex at hoy.org. H-O-Y-E dot org. You can do that. Awesome. Thanks so much.
1:04:28 Really good perspective. And thanks for being honest about that whole work thing. You know, it’s good to have someone say it, right? Honesty is key. It’s the best.
1:04:36 Awesome. It’s about the people here, Silicon Real. We would love some suggestions, right, when it comes to guests and future guests, things like that. Everything. Guests, suggestions.
1:04:46 Like I mentioned, we’re getting this episode 14. We need help. Yeah. So if you’re interested in what we’re doing and getting involved, reach out to us. Yeah.
1:04:55 We’re full-time. And yeah, just expanding our brand, getting a few more sponsors and that kind of thing. So, but until then, we’re going to keep doing this. If you’re listening to us on iTunes, you can check us out on YouTube channel, Silicon Real. And yeah, hit us up on Twitter is the best way to get into contact with us, right?
1:05:11 Yeah. That’s Silicon Real. Awesome. Alex. And I will follow you so you can be endless.
1:05:17 Ah, there we go. All right. Cool. Alex, best of luck. It was just a great perspective.
1:05:22 So thanks for coming on. Good times. We’re going to get the word out. Yeah. More and more.
1:05:27 It’s fun too. So, all right, take care guys. Thanks.
