This is an AI Transcription. It’s pretty good, but please forgive any errors.
[00:00:00] Jonathan: Welcome to the Difference Engine, the show for tech founders, investors, and innovators.
Today's special guest is a man who will be familiar to those who have worked in the European and global software industries in recent decades. Phil Robinson is an experienced and accomplished chairman, CEO, and non executive board member, and a man who I've had the distinct pleasure of working with in the past.
He's held senior positions at some of the great tech category creators and leaders, including Oracle, Sybase, Siebel, and Salesforce, and he was CEO of Velesix, Iris, and Exact. In 2022, Phil founded BoardWave, a networking platform for European software CEOs. Non execs, chairpeople and their investors.
BoardWave's goal is to bring brilliant leaders together to help turbocharge the growth and success of the software industry in Europe. As if this alone doesn't make Phil remarkable. In 2017, he was diagnosed with Young Alzheimer's. onset Parkinson's disease. And in May, 2021 was appointed the first chair of the development board at Cure Parkinson's.
Phil Robinson, welcome to the Difference Engine.
So sadly, as Paul and I constantly bang on about, Europe still struggles to create the type of global category dominating technology companies that we're seeing emerge over the last 20 years from the US. Today. In the UK, there's only one software company in the top 100 publicly listed firms, and it's not getting any better.
And as we've said many times, Europe has really only managed to create one bona fide long time category leader, and that's SAP. So, Phil, do you think that's a fair reflection of the state of tech innovation in Europe?
[00:01:55] Phil: Unfortunately, I think it probably is. If you look at the, um, that's the most successful software companies in Europe.
Very few of them get past about 100 million of turnover. Most of them stop before that. The founders get fatigued, they run out of energy. They can't get funding, they lose the skills that they needed and they plateau and subsequently get bought by often American firms, but generally for the generation of software entrepreneurs and companies that just haven't made the grade.
[00:02:19] Jonathan: Yeah, we seem to be obsessed in Europe with promoting startups, but it seems to me it's the scale ups that need the help, given what you've just said, if they're going to reach any form of global scale and not be sold in their journey.
[00:02:32] Phil: Yeah, it's true. Right. So, um, If you look at what the UK government does and other governments around Europe in the last 10 years, they're focused on trying to create these sort of innovation hubs.
So what is London, there's not one Berlin, Paris. And as a consequence of that was about a trillion dollars worth of value created in startups in the UK. And there's about 500. Billion in Germany, something roughly around the number and 300 in France. So they're worth a lot of money, but unfortunately, all that help and support and nurturing goes away as they get a little larger.
So when they get to maybe 10 million of turnover, when they're becoming a scale up, and they're really beginning to grow into being a more mature business. the support falls away, the help falls away, they're on their own, they're considerably successful. And it's the first time most of them have ever been a scale up CEO.
So on that basis, they're doing this for the first time, they're not getting any help from anybody. And that's one of the challenges for all of them, which is they're in new territory, but there's no, there's none of this as well. They've had for the last few years, it just sort of fades away. That's why you came up with the idea of BoardWave.
It's one of the reasons. Yeah. I mean, I'm, I'm, I'm,
I've lived in California twice, I've seen how Silicon Valley works, and, um, unfortunately, we've had a whole generation of really under, real underperformance, and it's reflected in the economic performance of Europe, right, so technology and innovation is a growth driver. If you go back to, like, 2008, at the time of the financial crisis, I think the GDP for the US is 14.
8 trillion dollars. If you put UK, Europe, Norway, and Switzerland together as a trading block, it was 17. 3 trillion. So the GDP of Europe was bigger than the US. Right now, the US is 28 trillion and we're 23. They've grown substantially quicker through innovation and taking hold of the opportunities afforded by technology and software, which we just haven't done.
And so you've got organizations like Amazon that spend as much in R& D every year as the entire UK economy. That's a sad reflection of the state of the situation. Um, Broadway was an idea which was born out of the analysis, if you like, trying to find out all the reasons why we weren't successful. People will talk about access to capital, they'll talk about a fragmented European market, they'll talk about access to talent.
But there's a new narrative, which is, well, what are all the things that stopped us in the past? What can we do differently in the future? And one of the things that the The Californians do really well is they work together, they help and support each other. They share ideas and best practice, and they recycle not only capital from one startup to another, but they recycle experience.
The guys that built PayPal, there were 19 guys at the beginning of the company. A couple of went on to build LinkedIn, a couple of went on to build YouTube, some went and built Tesla. And so you've got this founder factory mentality, where one big super successful company is the place where people get together, Build the next company and the next and the next.
And so if you do that multiple times, you end up with an industry, which is super successful, which is recycling capital and experience the whole time. You end up with what we've got in Silicon Valley. We just haven't had that.
[00:05:24] Jonathan: No, you just said Silicon Valley and you know, that there's the rub. You've got this monolingual, highly, highly compact, uh, area in one country.
With, uh, a constant supply of some of the world's best brains immigrating into that area, yet in Europe, you've got multilingual, very diverse, massively different legislative structures, and so on. Is that something that's too big to surmount? Probably 10
[00:05:55] Phil: If you come to Europe, as you say, this is a big geography as a software CEO, you can't touch and feel and see the other software CEOs around you.
In actual fact, we've got quite a decent talent pool of leaders that have been developed over the last 25, 30 years, but they're super fragmented and isolated by geography, distance, language, culture, size, and scale portfolio of investor. All these different reasons why. Across 3000 miles of Europe, these innovators, these leaders don't talk to each other.
And so if you're sitting in, I was in Delft running a software company in the Netherlands most recently, and if you're sitting in Delft, you're the only person sitting in Delft running a software company and you try and make decisions on your own without referring to other people, you're probably going to get it wrong.
Wouldn't it be great if you had the same access, if you're like in proximity to all those founders that own California. And so Broadway was born to try and sort that problem out, which is to create a venue or a place. Community where people can get together, the best and the brightest minds in Europe, all other software leaders in an organization that allows them to communicate, convene, meet, share ideas and best practice and nurture each other and mentor and support one another.
[00:07:03] Jonathan: That idea hit home very successfully, very quickly.
[00:07:06] Phil: And I thought it was a retirement project for me. It's turned into a lot more than that. I'm full time on it now, and there's a group of 10 people in the office in Marlebone working on it too. I think we've got 1, 650 members right now. Each one runs a software company of some form or some size or scale.
And everyone's saying they're getting immense value from being part of it. We've launched in Germany, France, Netherlands, Italy, and Spain's next month. And launch sounds like a very grand thing, but it's essentially a relatively small group of 25 or 30 founders that get together for the first meeting.
And hopefully from there, they're encouraged to bring their network into the community over time.
[00:07:44] Paul: BoardWave, is this an idea that, whose time has come, do you think? Because we've just come out of the zero Interest rate where it was mad first time out startups, some of which flourished, a lot of which, as you say, got sold to the US, given that that's gone away as an opportunity is BoardWave an idea whose time has come because the focus is now on scaling of what's already there, rather than planting a million seeds and seeing what grows and what doesn't.
[00:08:07] Phil: It turns out that we're actually quite good at building startups these days. With rounds below 5 million, which attracts as much venture money in Europe as they do in the U S today. So parity just, that just falls away, falls away at the time, right? So as they scale that, that falls dramatically away. So you've actually got this cohort over the last five, 10 years.
It's cohorts of companies that are growing and growing and growing, and they're getting to a place where they're now need some more support at scale ups. And if we don't do something to support them, that trillion dollars of value that's in the UK, or 500 billion in Germany, or 300 billion in France, is going to just be owned by somebody else.
It's not going to be part of the European economy. They're going to go somewhere else and do something with other people, unless we can help them, support them to grow and meet their true potential.
[00:08:52] Jonathan: I mean, what's interesting about this film, particularly, is that there are various networks around Europe where relatively young executives can be mentored by people that have been around for decades.
What is it that makes BoardWave different to some of those existing structures? There's
[00:09:11] Phil: a couple of things. One is it's European. Most of them are national. So if you are a Software CEO in Paris with a, let's make it up, right? 10 million ARR software business selling HR software. You might be the only one in Paris, but I've got 36 in Broadway that you could talk to across Europe.
So by having a greater scale across the geography, you've got more chance to communicate with like minded people that you wouldn't have in the country. Same is true of portfolios of venture capital companies. You have a VC that's got 50 CEOs in their portfolio. I mean, you might be the only HR software CEO, so you can have meetings and off sites and value creation days with the portfolio team and the portfolio CEOs, but ultimately you're the only one.
I can give you lots of other people to talk to across Europe.
[00:10:00] Jonathan: And you've also actually got VCs and angels.
[00:10:04] Phil: Yeah. And that sort of talks to the second part of why it's unique. So we set it up as a social enterprise at the very beginning. It's not designed to make money at all. It's mission driven. And that gives us a unique position, which is completely autonomous, independent and, and, uh, and fair and reasonable.
And you know, we take a position and people sort of go along with that because we've got known. Yeah. We want no vested interest. The thing that's also unique about it is it's free to join. So if you're a software CEO, you can join this community for free. And they have to be nominated. So there's a quality control, but it's free.
And so somebody that's running a software company where they may be running out of funding because they can't get the next round away in the current environment can join and get advice or somebody that's bootstrapped hasn't got a lot of money. Uh, it's running from, from cashflow can get advice and help and support.
So it doesn't matter what your financial situation is. You can get. be part of BoardWave and sit around the table with other people that have got more experience than you or are like minded. The social enterprise component of it and being free for users or members is important. It's funded by what is now a consortium of 90 Believe in the mission, believe in what we're trying to do.
We want to grow the European software industry more successfully. And they fund the program. Each of them provides some of the funding for the program.
[00:11:21] Paul: Amazing. And you know, the other thing that strikes me from what you just said is, you know, if I'm one of five, I think you said 30 HR tech, and there's a lot of HR tech out there.
Presumably I would be Suffering in Delft or wherever I am on my own, uh, if it was time to make a strategic move like a trade sale, that could be helped out by meeting like minded people who I might want to get together with and merge my business with rather than wait for somebody to suggest that from the investment community.
[00:11:49] Phil: So you can take guidance and have better connections and better relation networking relationships than you'd have on your own. If you were trying to Get grips with how you sell your company. You're gonna wait for professional advice at the right moment, but actually you can have a dialogue with whole series of people, whether they're software people or advisors who are partners from the consortium to help you along the journey.
It's like a, a Sandhill Road coffee shop. Yeah, well, that's what it is. I, I was still in the channel channels was Co CO, worked there for a few years. And he's Spanish, he lives in London, but he was working in California. And he said that like, this was a bit three months ago, it was like, I was in Palo Alto last week.
I was sitting in the coffee shop, the CEO of Databricks and the CEO of Adobe were there in different corners. And I realized that all three of us at the same time. So I dragged him together and we had a coffee together. That doesn't happen here, right? It just doesn't happen. This is it. As you say, this is effectively the Sand Hill Road coffee shop.
[00:12:43] Jonathan: I hear from talking to some of your members that, um, it's not just a question of if you've been in the software business for a long time, you just turn up and you're accepted. You have to have have to do a little exam. You have to fill up a series of questionnaires before you get in that.
[00:13:00] Phil: It's a questionnaire effectively asking them a lot of questions about who they are, what they've done, where they've been, what their skill set is, what were they doing before they were a CEO, um, what their issues and concerns are and what their business is doing right now.
So you get this sort of rich understanding of an individual. Person and then you multiply that by 1650 members and you've got a really good understanding of where all the hotspots are in terms of skills and experience and background that all the individuals and you need that to orchestrate and curate the connections.
corrective database, which all the members have access to. So you can go and have a look in the database to find people that are more like minded or might be able to help them, might be useful to them or maybe mentor them. So that question is really powerful.
[00:13:45] Jonathan: For those people listening who, who might like to join BoardWave, do they just go to the BoardWave website and they'll find those questions?
How would they apply?
[00:13:53] Phil: So they need to be nominated. So you need to find a partner. of which there are 80 and they're all listed on the homepage or an existing member that they already know will nominate them. And then they go to the homepage, click the apply button for the questionnaire and it takes about 15 minutes.
The other value exchange is when they fill that questionnaire and we ask them one particularly important question, which is, will you mentor somebody else? And you can pledge time in blocks of 10 hours. So 10, 20, 30, 40 hours a year. And so about half of the people, so 800 of them, Pledge time to be mentors of 800 mentors in the community too.
And we have to try and marry them up with people that want to be mentored by them. So it combines the data that we've got with the willingness to participate by
[00:14:35] Jonathan: the mentors to give people help and support. There's a bit of an elephant in the room question I wanted to ask you. And it sort of relates to the point you made earlier, which is about almost parity in the amount of investment that's going in across Europe to the States.
Can Europe in the next few years, cut it when. Everything in software and the money to back it at the moment is about AI and the leaders in AI appear already to be the big techs on the West Coast, the Googles, the Metas, the Microsofts, they've got massive distribution capabilities already, and we might start slipping behind, particularly in the LLM space.
Do you think there's any chance of history repeating itself here?
[00:15:16] Phil: If we don't do something about it quickly, there is a great chance of this repeating itself, but it's a moment in time and an opportunity as well. So if you think about the birth of the internet to where it is today, you've gone from dial up and you just put your phone in the cradle and you'd hear the noise, right?
To, to fiber optic today. We are in AI, we're still at the dialogue phase, right? So it's a very, very, very beginning. And so, yeah, there'll be some companies that are successful that are here today. There are many companies that will be successful that don't exist yet. And there's no reason why they can't be European.
You know, we can block the trend and we can actually own our own destiny and actually become leaders. We talked about this at BoardWave's conference last year, and the premise was, imagine it's 2033. Imagine it's 10 years from now and European software leads the world. If that were the case in 10 years time, what would we have to do in the meantime to get there?
And so we sort of fill in the blanks between 2033 and back to 2023 last year. And one of them is to basically take advantage of a dislocation and the opportunity to actually take hold of it and do something meaningful with it. There's definitely a desire of these big tech companies to consolidate their power.
They've got huge cash reserves and huge valuations. So they've got the firepower to do it. Ultimately. New stuff always comes through in dislocation. So just as open AI is a disrupter to Google, Google was, was, was disrupting other businesses in its business model from before in terms of advertising. So, um, there's an opportunity here, but we have to do better.
Be, be quick. We have to be nimble. We have to be orchestrated and organized. And then if we do that, I think we can, we can, we can lead just the way that they have in the last 20 years.
[00:17:06] Jonathan: Why not? Yeah. Why not? As usual with BoardWave, you are actually doing something about it. Haven't you got a whole series of masterclasses in AI going on so that leaders can embed AI in what they're doing?
[00:17:17] Phil: One of the things we do, we do today is we were doing a campaign called show me, don't tell me. So show me, don't tell me is like. Actually, let me show you how this works. Let me show you what this technology can do versus tell you all about it and the massive potential. You walk away and don't do anything about it.
I want to show you actually what's going on. And so we've got a partnership with another organization called Mindstone. They do AI meetups, which are in, they're not like the fabulous dinners that we run. They're in a church in the East end with hundreds of people, but it's basically come one, come all for free.
And basically in that, in that room, obviously CEOs and techies and everything in between. And I'll sit for two hours and hear one technical demo, one presentation from a business person on a panel debate. They do it every month and it's just about trying to. Explain to people and show them how to do this stuff because actually it turns out just having dinners with Marty and, and, and Satchin isn't enough.
You've got to actually inspire them to do something around it.
[00:18:28] Jonathan: We love to hear from people that have played their part in building category leaders. Phil Robinson is no exception, except perhaps he's held leadership positions in a series of companies that became category leaders and shape the world we live in today, including Oracle, Sybase, And Salesforce, one thing that stands out for me is that three of these four examples has powerful, energetic, and high profile individual leaders in Larry Ellison, Tom Siebel, and Mark Benioff at their helm, real forces of natures.
Founders who stayed the course in contrast, sidebases, lower profile leader, Mark Hoffman dominated the supply of Unix relational database engines to the finance sector. But the company declined after a series of products and financial missteps. Ultimately. To be managed by a series of CEOs before being acquired by ERP category, the SAP.
So Phil Ellison, Siebel, Benioff, what was it like working around these industry legends? I'd like to say it was always inspiring and fun
[00:19:27] Phil: and, uh, And lightning and an amazing experience. It wasn't always some of them could be quite difficult and challenging at times. Um, but I think what I learned was that the influence of the CEO has a massive, a massive influence on the culture of the company.
So the companies were a reflection of the. CEO. So we had Tom, who was a control, real control freak, wanted to be involved in everything, sign off everything, and was really strict and difficult to work for overall, I would say, but he was super successful and he still is, um, with his own, you know, version of running a software company.
Mark was very different. He, you know, he would. Dog would come to the office and he'd be in his shorts and a white shirt, and he was, uh, gregarious and entertaining, but still, you know, underneath all that, a very challenging guy to work for, particularly if you're a CMO, because he was a marketeer. Um, so I think that, um, very different companies and all basically made in the image of CEOs, I think.
So you've got to realize if you're a CEO, you're a role model for everybody in the company. And what they see you do is what they all
[00:20:42] Jonathan: do. To what extent do you think such force of Even different character is required to deliver the vision that ultimately will result in category leadership. They all
[00:20:53] Phil: have this desire to do something meaningful, to build something they could be proud of, to not be diverted by the wealth or the money associated with building the company, because a lot of companies and founders in Europe Get to a certain place.
It gets a bit tricky and difficult. It's taking longer than they think. And also every year that goes by, they're occupying more risk in terms of the capital they've invested. So the place at which the, so the first offer comes along and they go, you know what, it's a half decent offer, I'll take it. The opportunity and the potential of companies gone away, they're not on the journey for the long run to build something of value and meaningful and something to be proud of, something of consequence.
[00:21:34] Paul: Many of the people in California are coming from you that statement about holding out and just, you know, there's a season when it's bad and then you sort of get back on the horse and the determination of these long term winners coming from you. I think that means a lot. It's really, it's really important.
And I think that we
[00:21:48] Phil: see that in, in BoardWave where there's a lot of members. There's a very small number of them that are actually truly mission driven, truly want to build a global category leader. Lots of them think they might, but actually when it comes down to it and things get a bit tough,
[00:22:04] Jonathan: they probably won't stay in the journey.
It's also shows in M and a, which is, you know, I spend a lot of my time doing where you get, um, European leaders who, as you say, do get that offer are often tempted by, they often sell their company sub optimally, certainly in terms of its, its growth, its profitability, um, and so on. But the problem often is once you think the company is salable, you sort of lose heart in it.
you don't retain the drive that you need to take it to, you know, to full fruition. So, yeah, I mean, I think that you need
[00:22:37] Phil: to grow these companies more rapidly as well. If it takes 15 years in Europe to get 200 million of ARR and 10 years in California, then the journey is a longer journey. And if the journey is a longer journey in Europe, it's got more risk on it.
So if you could scale more rapidly at the same sorts of rates as the Americans, you'd attract better talent, more skills, you'd get better capital and better better terms, we need to find people that want to take that risk and go on that journey to building category leaders and scale through that 100 million barrier, which it seems to be the place at which they've got terminal velocity to become something of a global leader.
[00:23:12] Jonathan: Yeah, I think it's also important that we can scale as quickly because if we don't, then by the time we're getting to optimize our size, then the Americans have moved on to a new wave and Very, very quickly, we can become all but irrelevant. Um, but just just going back a little bit, Phil, you know, from your point of view, when you were, you know, ascending to the great heights you are now at, you're working in product, marketing and operations.
Um, and you ultimately had global responsibility for those aspects of running a tech firm. I mean, how did you align that work to An implicit or explicit category journey. Um, was it very clear that the marching orders came right from the top?
[00:24:00] Phil: It is very clear for American companies. So if you're working in Europe for an American software company, the chances are the plan, the strategy.
Uh, and the people that are involved in that are based in California and they'll have a model that they deploy and they'll deploy that model in the U. S. and then they'll deploy it into Europe and other regions around the world. And your job in Europe is to execute the model. If the model doesn't work, it's your fault.
Not that the model's wrong. So even though you might know more about Europe than anybody else does. If it doesn't work out, then it's your fault, not the model's fault.
[00:24:32] Jonathan: In your time working at the sort of big four category creators that you've worked with, do you think they made any significant missteps?
And if so, how did they recover from them, or not recover from them?
[00:24:45] Phil: I
[00:24:45] Jonathan: think,
[00:24:45] Phil: um, well with Thomas Siebel. He was super successful, right? We went from, we were, there was like six or seven of us in an office over a shopping winter when we started in Europe. We hired up to 2000 people at the peak, and it was a 2 billion revenue business.
He'd done really, really well, but every decision had to go through Tom, ultimately. And that's not scalable forever. And so there's a place where And this was when cloud was just beginning, the beginning to see competition from others like Salesforce for the first time, that things started to slow down in terms of growth.
Cost structures were high because we were trying to grow, see if we become less profitable. Things get a bit sticky and Tom sort of ran out of ideas of what to do, turned to the management team and said, what do you think I should do? You know, you're the management team, what, what should we do here? And it was like everyone was in a straitjacket because they hadn't ever been asked that before.
I've been there seven years. No one ever asked me what I thought we should do. So you're just, you know, you're in your straitjacket without an answer. And he, um, he sent everybody a copy of a book, which was called Who Moved My Cheese. I don't know if you've seen it. It's a management book. Terrible book.
It's a terrible world. But it's basically a message, which is everything's changed. You need to change as well. Over the course of the next two or three years was sort of the place where the company began to decline. He sold the business to Oracle. Given
[00:26:13] Jonathan: this and other experiences you've had, what were the three key lessons you You talk with you when it became your turn to be the CEO.
There's
[00:26:23] Phil: a few things that you get from working for American software companies that you don't get in Europe so much. And they all, they all have this, these characteristics. One is velocity. Do things quickly, don't prevaricate, just get on and execute. Mark used to say, tactics dictate strategy. So you might have a strategy, but if it's not working, change it.
And if the tactics that you're using are more successful, use that to redefine the strategy, tactics dictate strategy, and that's all about. Speed of execution and velocity in everything that you do, because there's an opportunity in the, in the moment in the market. Now you need to take advantage of it before somebody else does.
So don't put off till tomorrow. You can do today. A second one would be when you're building a team or organization. What's the right team today may not be the right team tomorrow. And so we saw that when we built out. I would say C Plan Salesforce, to be honest, if you hire a country leader in France or Germany or some other market, the person that gets you started and builds the company in the first few employees successfully may not be the person that then scales that business for the first 10 million or 50 million of revenue and won't be the person that scales it.
beyond that. And so you making decisions on hiring people when you're growing that quickly, rapidly taking decisions, let them go hire somebody else because, you know, you need somebody else for the next stage of development of the company. And so it's quite a ruthless thing to do and say,
[00:27:59] Paul: yeah, it's not something that I think the average French company leader is going to sign on with those guys tend to stick around.
Like it's a very American view. And I wonder if, um, the EU is of the European markets ready for that. even today. Yeah, that's true. When there's,
[00:28:15] Phil: there's another story when they had some layoffs towards the end of their journey and we had to lay off people in France and there was a consultation period which lasts up to a year.
So they couldn't understand why they'd said the headcount goes from A to B and we still had A because the C was still there almost a year later. By the time we got to B after the consultation period, They've gone through a whole year of change in California because they, they're, they're higher at will culture and they were ready for another layoff.
And so then you go through the whole process again in France for the next round of layoffs. It was just terrible, but nevertheless, this idea of when you're growing and you're successful, you need to recognize the team you've got today may not be the team that gets you to the final destination. And the third one would be.
They call growth mindset, which is even when things are going wrong, there's something you can learn from it. You can have a growth mindset about anything, even in the worst situation. What is it that when it went wrong, what do we learn from that? And how do we take ourselves forward? Always having a positive attitude and a growth mindset.
So those are three things we'd probably run common across. All those American companies, very American in style and approach. But actually I think I took those three things into my second half of my career, which is as a software CEO.
[00:29:43] Jonathan: You know what, this really grinds my gears. So we've come to the point in the show where we ask our guest what's really annoying them grinding their gears, we say, in the tech industry. So, Phil, what's been grinding your gears recently?
[00:30:01] Phil: Unicorns. Valuations of software companies worth a billion dollars.
It's just ridiculous. It's like, it's a valuation, not a destination. It's not like, Why do you celebrate being a unicorn? This is not making your business any more successful than it was the day before or the day after.
[00:30:15] Jonathan: Why is it everybody from politicians to investors and entrepreneurs has become obsessed?
[00:30:20] Phil: The venture world started this thing. It was a marketing tool or an idea to show the valuation companies. and their future potential. And everybody's latched onto it, including the politicians. The Conservative Party over the last couple of years were talking about how many unicorns UK. It means absolutely nothing.
Absolutely nothing. It's not an all star metric, is it? It's not when you set the company up, you didn't say, oh, I'm going to set this software company up to build a unicorn. He's trying to solve a business problem and build a meaningful business. So it's like, it's not a validation of what you've done today.
It's a value, it's a valuation of what you're worth in the future. And we've already said that most of these companies never make it given the current environment or the historical environment. So they don't ever arrive at the potential that they've got. So it's just not, not real. Give me an example. In 2021, the average SAS multiple was 15 times revenue.
So you need to 66 million, even at that rate, you need 66 million of dollars of revenue, ARR or ARR, to get to VR Unicore. In 2024, It's 5. 8. So now you need 172 million. So some of the people that were unicorns in 2021 aren't unicorns anymore, but they're not shouting about it, are they? The business doesn't matter.
It's not any different. It's the same business now and then it is tomorrow. It's like the market changes and valuations change. 2021 unicorn valuations were 30. Some of them were 34 times revenue, which means it sounds like it's a big company, but it's not a big company is with 34 times is. 29 million of revenue.
It's not a big company.
[00:31:57] Paul: Maybe it could be a devil's advocate here for a bit. One of the things that's become trendy recently is secondaries, right? So you let employees get out because somebody wants to buy their shares before there's been a proper liquidity event. Uh, we've seen this recently. It's driven at unicorn valuations at Revolut and a bunch of other places.
Is there some benefit Phil to being called a unicorn when in fact, um, you're not. May never be, but it gives liquidity to folks you desperately need to, to keep. And therefore it's sort of, it's an internal comms metric. It's a stretch, isn't it? I think possibly could
[00:32:31] Phil: say that it's fine, right? For the person that manages to get their shares sold at that very moment in time, but the employee that's arrived more recently and can't sell his shares till next year, it can be really pissed off because it might not be unicorn anymore.
I guess for me, it's more about. What is the North Star metric we should be using to say we're creating something valuable and meaningful? For me, it's more, I would say, it's 100 million of ARR or 100 million of revenue. So it's the revenue contribution, not the valuation that's important. It has to be something that involves turnover, profitability, growth, or even market share.
But how does the government get bought into this? How
[00:33:10] Jonathan: does, how does the government sit there saying we're going to make 40 more unicorns next year? I think we're probably all three of us agree that the term unicorn should be, uh, consigned to the knackers yard and never, never, ever be heard of again, except as stuffed animals in your kid's toy baskets.
This week, we want to talk about why authenticity matters. If you want to be different, as we know, the basis of category leadership is about difference, and that can apply to people as much as it can apply to companies. So given. The things that you might've learned in, in your career, I suspect there's a lot you can teach us.
And certainly something which most of your board waivers will appreciate. That is that being a CEO is often a very lonely place. Um, everybody from junior employees to the investors expect you to have. All the answers and we all know that in reality, we don't, not, not just because of the rate of change in, in innovation.
Um, the game changes constantly in tech. Um, but the stress of maintaining a strong and calm front while trying to work out what to do is often just based on gut feel and that stress can be immense.
[00:34:31] Phil: Yeah, it can be. And I think, um, there's definitely this Loneliness of being a CEO, you've got something that's particularly challenging.
You, your employees expect you to, to lead and know the answer on where we're going, what we're doing. And you don't feel like you want to take it to your board members because often they're also your investors and they expect you to be able to solve this problem on your own or with your team. And so, um, this idea that, you know, the CEO has to be infallible or invincible or, or, or, or what have you makes you.
Unapproachable. You put yourself on a pedestal where you're absolutely on your own and make it a more lonely place because people look up to you, but you're not human anymore. You're not actually relatable. And that turns out to be a problem. And lots of CEOs are like that, right? So they feel like they need to be the person that everybody turns to.
And unfortunately by doing that, the very nature of doing that makes them unrelatable and unapproachable. And I learned this. I guess later in my career than I would have liked. Um, I learned this at Xact, which is a software company in the Netherlands, which I ran. As I was joining the company in 2017, I was super excited about the opportunity of going to work in the Netherlands and run this company.
Concurrently, I had a diagnosis of Parkinson's. And so, I'm sitting there in that summer with my wife saying, well, I don't even know if I can go to the Netherlands, let alone, you know, run this company. What should we do? And talking to the neurologist, he said, well, look, you know, why not? Why can't you do it?
What's, what's stopping you right now? It's only the beginning of your Parkinson's journey, and actually for many years to come, you may be perfectly capable of doing it. So we took the plunge and did it, but we didn't tell anybody. I didn't tell anybody I had Parkinson's. I kept it to myself. I, because I felt like I had to be strong for the company, strong for their investors that had put their faith in me as the new CEO for this company that had actually had a few challenges and lent into being this courageous, invincible leader.
Um, for the first So I was going to work every day with a challenge that I wasn't sharing with anybody. And so you're not bringing your whole self to work, you're not bringing your entire personality and you're not giving your best because you're checking the part of you that's being checked at the door.
I kept it to myself because I was worried that the investors would want to change the CEO again. That would be. Not great for me, but also not great for the company in terms of disruption it would cause. I felt like, because Parkinson's has got a certain reputation, people keep it quiet because they're worried that they're going to get, not get a promotion or, you know, going to get undermined or they're going to get fired even, uh, from the job that they're in, because people are going to think they're not capable of doing it.
And so I had that same fear. And so I didn't say anything until two and a half years later we were selling the business. And I had to find a way to signal that. Maybe with the new owner, I wouldn't be there forever answer as the CEO and basically didn't quite tell the truth. I said, I want to go back to the UK.
I'm from the Netherlands. So I'm not going to be, you know, CEO forever. I'll do it in transition for you, but not forever. Subsequently, after the transaction happened to go back to KKR and say, I said I was going back to the UK at some point in the future. So, you know, soon I'll do this in transition. But the real reason is I've got Parkinson's.
And that was a huge relief for me because, Once I told them, I could tell the management team, once I told the management team, I told the employees. We had 2000 employees and we'd have a quarterly, uh, town hall meeting in the main office in Delft and filled with videoconferencing from all the offices around the world.
And I wasn't, I wanted to tell them to be transparent, honest with what was going on with me. Um, but I didn't know if I'd be able to do it on stage without, you know, breaking down at all. I didn't know how they were going to react. I didn't know what they were going to say or what they were going to do.
And so I made a little light. Three minute explainer video, and I basically in this meeting, so look, you know, I've got something to tell you. It's personal to me. I don't think I can say it right now myself. So I'm going to just show you this video of this, this thing. And so. Play the video and, you know, sitting there on stage thinking, I don't know what's happening next, but let's see and at the end of it There's just this firstly quiet and then a huge round of applause Everybody was like super supportive and It was an amazing experience, an amazing moment, and actually, it was a moment that my career changed because now, for the first time, I was being honest about who I really was and what was wrong with me and what was going on.
And doing that, I mean, the Dutch are very direct anyway, but doing that was an opportunity to be relatable. Be authentic and bring everything to work and maybe a much stronger leader.
[00:39:39] Paul: Did you feel a reset moment for your career goals post that exit? Yeah, I mean, I
[00:39:45] Phil: wasn't, I knew I had to UK and I couldn't be a CEO forever.
So, because it's a stressful role and that's not helpful for Parkinson's. So, yeah, it did, but I just still was there another. I think 18 months or so, and that 18 months was the best 18 months of my career because people would just come up to me and talk to me. And I got so much from that in terms of being able to properly talk to people no matter where they were from in the company.
And I think it made. A difference to the culture of the business throughout a period of time. I think it's a hugely valuable lesson. It's unfortunate though that he also got Parkinson's. But it's a lesson about being authentic and being vulnerable and being relatable. And that's a much more powerful place to be than this CEO that's on a pedestal and is unrelatable because you don't share what's going on.
So it made a huge difference.
[00:40:42] Paul: Thank you for listening. If you want to learn more about Phil Robinson and BoardWave, Go to board wave.com or for Cure Parkinson's, go to cure parkinson's dot org.uk. Read
[00:40:54] Jonathan: our blog posts on this and the world of tech categories@becategorical.com. Of course, if you're a tech business and you want to explore how you can become a category leader, then we can help get in touch with us via the show notes or@wwwbecategorical.com.