Paul: Welcome to another episode of The App Guy Podcast. I am your host, it's Paul Kemp. This is the show where we get app founders, CEOs, anyone in the mobile business and we really deconstruct their success, their journey so that it helps us with our own app entrepreneurial journeys, and we have many listeners who are listening to this right now who are making a living off the app store. So what I'd like to do is get these great guests on, and I have a terrific guest on today, because he is the founder and CEO of Off3r.com; now don't get confused, it's OFF3R - a nice little play on words there. His name is Lex Deak, and OFF3R - let me just summarize - aggregates deals from leading crowdfunding platforms and uses a swipe-style UI to make it easy to discover deals. So Lex Deak, welcome to The App Guy Podcast!
Lex: Hey Paul, thanks for having me.
Paul: Thanks for coming on. So tell us about OFF3R, what are you actually doing with the app?
Lex: So we live in this world of increasing noise, and if you're an investor or an entrepreneur that wants to stay abreast of investment opportunities and companies that are getting funded, seeking funding, where do you go? There's all sorts of places, there are crowdfunding platforms and angel networks, but it's fragmented, it's distributed. So we built OFF3R to pull together all of those companies and those investment opportunities into a very simple, familiar, sort of Tinder-style interface on your mobile. You're alerted whenever there is a new fundraising opportunity, you can track the deals, you can set notifications and alerts if they reach X% of their funding target... It's just a very simple, very useful tool for staying abreast of early stage investment activity.
Paul: I love this already because a lot of the episodes are focused on the need for curation, and this is almost like curating investment deals. So I'm really interested to know if there's been any deals that you feel money has been raised because of the app?
Lex: Yes, we know that through talking with our base, which now numbers about four and a half thousand active investors. Unfortunately, and this is something that many of your listeners will appreciate, there is work to be done on the transactional piece, and just kind of maintaining transparency of that investment process when somebody goes to a platform to actually invest. So we're working on that technology now, but to date it's just evidenced from our base that, courtesy of discovery on OFF3R, they have gone through and they've backed some great companies, and it's made their life easier. It's the kind of thing that makes it all worthwhile for you as a founder of something like this.
Paul: It does sound great. I mean, funding is definitely one of the big challenges. So how do we get noticed by you? Are you doing any manual curation from all these other platforms, or is it more automated?
Lex: What we're trying to do is not really take a view on the deals themselves. My other business, which is QVentures, is a high-level Super Angel network and in that business we get very meaningfully involved. With OFF3R, the bar to reach is to be a platform that has the relevant permissions, is authorized in the UK by the FCA and follows best practice. If we can be confident of all of that, then we can by extension be fairly confident that the deals are of a certain quality, that due diligence has been done, so we don't have to take a view. But what we will do in an upcoming release is give some insight into what the community is finding really interesting: trending deals, fastest-moving deals, that kind of a thing, so a sort of community-generated curation, rather than us being the ones to do that.
Paul: So we love chats about fintech because there's a lot of money to be made with fintech-style apps, but I'm wondering, the regulation must be quite hard then. Are you actually regulated by the FSA?
Lex: Yes, the FCA. Currently, we're just working through our application. It is an area where you have to be careful, we're all making financial promotions, we're making invitations to invest, although we take advantage of signposting, so we're not recreating any deal data, we're simply reporting what is already out there in the public domain. We're in a slightly grey area, but the landscape is ever-shifting, and we're in consultation with the FCA around where we fit into that, and we want to be a part of... You know, in the UK we're very lucky, the FCA is perhaps the most progressive body in the world for trying to create structures for enterprise and for funding. We're figuring it out as we go, it's a new space which is kind of exciting and challenging and scary and horrible and amazing at the same time.
Paul: We love grey areas, that's where the opportunity is. You'll have to remind me, what's the FCA stand for again? I always thought it was the Financial Services Authority, but it must have changed.
Lex: It was that, yes. It's now the Financial Conduct Authority.
Paul: Alright, okay.
Lex: Yes, it's similar powers really, but just a bit of a spruce up, and a few other areas that they cover.
Paul: Okay, so these 4,500 active investors - that is amazing leverage that you have to attract money to deals. How did you go about getting these users, these investors interested in OFF3R?
Lex: Well, to date we've only done some very low-level marketing. We've leveraged social channels, namely Twitter, and we've worked with platforms to help spread the word. It's in their interest to promote us, as well as us promote them. We've done somewhat fairly low-level, reciprocal marketing for the time being. We've just closed a funding round, so that gives us some firepower to do some other cool stuff as well. We've been lucky enough, I think, that the investor/entrepreneur/startup communities are fairly tightly knit, so you benefit from word of mouth, and ultimately we've done well from that so far.
Paul: Lex, it would be pretty cool if you could tell me that you've funded your own startup with OFF3R.com
Lex: Yes, I'd love to say that. We did consider that, but we ended up through the QVentures network, which is the Super Angel network, closing it with just a small number of high-net-worth there. We've got Tom Singh, who's the founder of New Look as our lead investor, and a number of other senior Citi finance professionals and super angels. We kept it small, but I think for a subsequent round which we're thinking about perhaps in the autumn, we'd love to use the platform. I mean, what a great story, right?
Paul: Yes, actually voting your own platform to get your own funding, that would be pretty cool. You sound like you've been in the game for quite some time and that you've got a number of different things, I'd like to switch gears slightly and ask you about your journey, and whether you feel like the startup world and going through funding and all this sort of stuff - whether it's worth it, to anyone who's listening who may be attracted to the kind of lifestyle that you may have.
Lex: Well, that's a great question. Is it worth it? I guess that's only something that you can say retrospectively. I think over the years, you know, I started my entrepreneurial journey in my late teens, early twenties and at that age you have this beautiful naivety, you don't realize how hard or difficult things will be, you don't have the same appreciation for money as you do when you get older and you may have mortgages to pay and a family to support, car payments to make and all those wonderful realities of life. I've noticed my own perspective shift quite significantly over the past decade in particular. I've been interested in many different things, and my journey has taken me through setting up the first eBay drop-off shop in the UK, and growing that and exiting to GE Capital in my early twenties, to then flying to Marrakech for a weekend to take stock of what happened, and end up buying an old [unintelligible 00:09:22] and converting it into a boutique hotel and living in Marrakech for a year... Then getting a Facebook friend request - this was 10-11 years ago I guess - from my mother, and thinking that this was not the place for family online activity to take place, so I end up building a platform for families, which was a place to share photos and to-do lists and calendars. Then going through the Dragons' Den process, getting my TV exposure as marketing and finding out that some people are perhaps not as straight as they might like to make out, and the value of candor in fundraising... I had some good experiences in raising a fund, and I had a terrible experience in raising a fund, and then involved in the energy industry, in energy performance certificates, and then working with a number of high-level entrepreneurs organizations, namely The Supper Club, and feeding through into setting up an investment club for a really top tier group of entrepreneur-investors to then setting up QVentures in partnership with Quintessentially, which is the world's largest network of high net-worths with offices in about 60 countries, to then eventually getting into OFF3R. Sorry, it's a slightly verbose answer to your question, Paul, but it's not been a straight line, and at each interval you become immersed and absorb yourself in a new industry, and you learn as much as you can, and I think we live in a slightly different age now, especially in technology. You can set something up, you can trial it relatively quickly, relatively cheaply, and I would suggest doing that as often as possible, and just remaining adaptable and flexible. I think you need a certain personality type in order to weather some of the storms, you need some resilience, you need a good sense of humor, I think you need perspective. The best entrepreneurs that I come across tend to tread the line between humility and super-confidence very well. They will listen, but you also have the feeling that they will knock down doors to get what they want. It isn't a journey for everyone, and I guess the other side, the slightly less positive side of the coin is that it's become a very attractive or 'aspirational career' choice for more people now, and I think that I'm seeing some people just simply aren't equipped for the highs and the lows and the twists and the turns and the instability of it, and there's a feeling that if one buys a nice MacBook and has artisan coffee and starts pinging some e-mails around then you're suddenly a startup founder, and I think that there's a risk there in expectations perhaps not being realistic. It is hard to turn something from a concept into a product, it is even harder to turn that product into something that's a business and makes money. Then there's the stage after that, which is making yourself redundant or growing so that the business is a self-contained entity and can either be sold or grown substantially is even harder, and it will take - it should take - five, six, seven years to get there. But anyway, that's my two cents, that's how I'm feeling this morning, Paul; it might be different later in the day, you never know.
Paul: I'm gonna take that as a yes.
Lex: Yes, I think that was a yes. I forget what the question was, but that's a yes. [laughter]
Paul: I love this, this is why I set up this show, it's really inspirational. I think it's one of the best answers. This show is to try and get to the genuineness. There's so much hype out there, isn't there, about people watching Dragons' Den... Tell us, as someone who's been on there - obviously, for all our US listeners, it's the Shark Tank, and we've had quite a few Shark Tank people on here as well - is it worth the hype of getting on there? Does it really open up lots of opportunities?
Lex: Yes, it was great for that, as a marketing exercise I think it's had the highest impact of anything that I've done. I ended up with six or seven minutes of primetime BBC2 exposure, what would one cost that up, hundreds and hundreds of thousands, I'm sure. It generated 20,000 odd new signups overnight, it opened conversations with PhotoBox, Snappy Snaps, Firebox and known, sizeable retailers and interesting partners. So yes, I would suggest it; from a marketing perspective, it was incredibly worthwhile. I don't think the format and the mindset of the Dragons are well-suited to technology ventures, they typically have a different means of valuing business, that always seems to be the sticking point. So I think if you can come out of the experience without undermining yourself, and just stay true to your beliefs and the value that you've set and what needs to be done to make the business successful I think it's incredibly useful.
Paul: I love that as well. I guess I wanted to also pick up on... You talked about your journey and it's not a straight line, and a lot of people that come to me seem to have trouble focusing; I know I've suffered from this in the past. How do you stop pursuing the kind of shiny thing syndrome, where you get a Facebook message from your mom and then you set up your own platform?
Lex: Yes, exactly... I don't know, if you find the answer to that, Paul, do let me know. I think it's one of the hardest things with an entrepreneur because by definition you should be an opportunist as an entrepreneur, and there's different types of entrepreneurs, but that's my particular leaning. I think that the opportunity cost of not pursuing what you deem to be a very interesting opportunity is gonna haunt you, and even if you're not working on it, your subconscious is worrying away and that is expending energy. It's a difficult one. I'm kind of embracing it, rather than trying to hide it or to change it. I was talking with Modwenna, who set up Angel News, and has recently set up The Pluralists Club, which has been created to recognize that many of us now wear different hats and have different interests, and I think that traditional wisdom dictates that you must focus and have a laser-sharp focus in your area in order to be very successful and I can't discount that, of course, but in technology particularly there are so many tools that allow you to organize your time better, to segment and to prioritize, that I think it is possible to do more, to work whilst mobile, to have different interests. I would suggest if you are doing multiple things, they should be under the same sort of umbrella. I have a few different ventures which are all in fintech, and there are synergies between them, so I see it as one bigger businessor one bigger play. If I had a cake shop on the side and a travel business, as well as OFF3R, I think I may find myself slightly stretched. But the other thing is that also if you're involved in more things at the CEO/founder level, I think it allow you, if you've got great people - and this is an absolute must - working with you, for you in those businesses, it allows you to maintain a slightly objective perspective on the business, and you can deal with the stuff that really matters, and that's really important, rather than getting drawn into the minutiae because you just simply do not have time. I think that's working for me, whether it will work in the long term or whether I'll end up going mental and selling [unintelligible 00:17:56] on the beach somewhere in Bali. But that's the theory for now.
Paul: Maybe you've just given yourself the seed of an idea with the cake shop.
Lex: Yes, dammit, cakes! There's so much room for improvement with cakes. [laughter]
Paul: There is, it's a hugely disruptive market. And actually, you've mentioned Firebox as well, I have to say that we had the CEO on this show as well, so if anyone wants to listen, it's episode 395 with Kristian Bromley.
There's two more things we need to do then Lex before we say goodbye. One is that I'm really interested in OFF3R because the data behind it must be immensely valuable, getting to see lots of different trends, what investors are perhaps swiping on, and I wondered if you could share any of those trends that you're seeing there, any particular investor interest in certain areas regarding mobile?
Lex: Yes, there's a huge amount of underlying data. So far, our investors have undertaken about three-quarters of a million interactions on the app - that's a like, or a pass, or a social share, or a video view - and that does give us a great deal of sentiment data and sector data. The clear kind of standout observations would be that deals that are at least 65% funded seem to just naturally draw more attention; as a metric, as a starting point, everyone knows you should start a crowdfunding campaign with a certain amount, but it seems to be 65% plus is the level where things really start to... It's the tipping point. Sector-wise, we've seen FMCG, retail and otherwise consumer propositions do particularly well through crowdfunding platforms. I think that that stands to reason because of the mobilization of a fan base. You know, the classic example of breweries I guess is the one that will be cited for years to come. At one point last year, 18% of deals on CrowdCube had to do with food and drink, with a large leaning towards the brewery side of things, so I think that's really interesting. You're seeing a huge appetite for SEIS deals for crowdfunders, where there are reliefs for them there on capital gains and other income tax liabilities. The deals that are up to 150-250 typically are getting closed more quickly. Again, that stands to reason because it's a smaller amount of money, but the million-pound-plus deals that are B2B perhapsor medtech are not as successful on crowdfunding platform currently, and that may well change in due course. We're seeing a lot more younger people getting into this space. I think a traditional angel would be 45+, them having done well and having some spare liquidity. Now we're seeing most engagement from the 30-40 range, so the tech-savvy, younger, mobile, more engaged or more tech-engaged investor, which is really interesting. There's all sorts of cool stuff, Paul, and, actually, if any of the listeners would want to have a look at some of that data and make meaning of it, I would invite anyone to do so, very happy to share that.
Paul: That's wonderful, yes. You mentioned breweries, and I do remember a chat with the guy who created Orderella, which is the ordering app, and they raised a ton of money. So definitely, the brewery space is... I guess that's a British thing, isn't it Lex? Beer and spirits always seem to do quite well.
Lex: Yes, although there may be a link towards alcoholism and investing, which would be an interesting one - high risk investing and the consumption of alcohol.
Paul: Here you go then, here's a partnership: we had a guy on from Shark Tank, in fact, doing the alcohol test on your iPhone; you have to breathe into that to be able to swipe, to show interest.
Lex: That sounds like the future, I love that.
Paul: Okay, well the final thing then is I wondered, as a very busy entrepreneur, you said that you have lots of tools now to help with our productivity, and really maximize our time. I wondered if you could maybe give us one or two of your most useful resources you use online, whether it's an app or a piece of software that helps with your productivity.
Lex: Sure. Well, firstly everything that I would use would need to be synced across all devices, so essentially device-agnostic; I'm sure that's the same for most of your listeners. Slack is a recent and absolutely stellar success, it works very well, it's cut down internal communications via e-mail for us in both businesses significantly. Note-taking tools, I use GNotes and I use Google Keep, which works really well for capturing any ideas; it's that little detail that you capture that can make all the difference sometimes when you wake up at 4 o'clock in the morning, capturing that, making use of that and sharing that with the team - really important. Dashboards that we have for businesses - we spend a lot of time upfront, figuring out what metrics we need to see, and creating dashboards which again are built on a mobile-responsive website, so out and about it's as easy to view that. I use TickTick as a to-do list tool, and we use Trello Boards as a team for more project management-based work, and then beyond that we use Google Hangouts generally for video conference calling if we're out and about, as a team, on both businesses. Google is I guess the suite that we use for our everyday stuff, for our e-mail and calendars, contacts, and also Google Docs, although I do find Google Docs and Microsoft Office users tend to sit in two camps, and the two play, but they don't play that well together. So I've recently just conceded and we're also using Office from Microsoft as well; that's pretty standard.
Paul: Well, if anyone from Google is listening, they've changed the way you create a hangout from YouTube, which is driving me insane because I do a weekly hangout with a Slack group. For everyone listening, I actually do have a Slack community that I've just started building, you're very welcome Lex to come in and say hello to everyone. It can be found at a link at theappguy.co where it's got Slack. So all your details will be on the show notes, it's episode 440, an easy number to remember. So just go to theappguy.co and you can connect with Lex. In the meantime Lex, how can people reach out and connect with you? What's the best way of getting in touch?
Lex: Head to LinkedIn, I'm a fairly open networker on LinkedIn. You can find me on Twitter @lexdeak. You're welcome to e-mail me also if you want to, firstname.lastname@example.org, and we have a Slack channel and a community that we've created for crowdfunding and alternative finance as well, which you can find in the footer of the OFF3R homepage. So yes, multiple ways... Luckily I have a fairly unique name, so wherever you can find me I'm generally pretty responsive and happy to talk.
Paul: Yes, Slack is amazing. A few years ago Evernote was the most mentioned app, and now it's Slack; it shows you how these things change.
Lex: He's nailed it.
Paul: Yes. Lex, this has been absolutely a terrific chat, I think one of my best. I appreciate your time and all the best with OFF3R.
Lex: Thank you, Paul. I appreciate yours, and lovely talking to you.