Geo George from Mayfly Ventures on co-building disruptive AI ventures with industry leaders.

[00:00:00] Hi, it's Michael Kerr here presenting Small Business Banter. Welcome to the Small Business Banter podcast. I'm Michael Kerr, your host, and I'm also the founder of Kerr Capital, where I work day to day with business owners.

[00:00:20] The Small Business Banter podcast is built just for business owners and will be especially relevant if you're an owner looking to sell, if you've been unexpectedly approached by a potential buyer, or if you're an aspiring owner about to buy a new business. There's a lot on the line personally and financially. It's stressful, it's emotional, and it's usually new territory.

[00:00:45] So to help, each episode of Small Business Banter is a discussion between me and another business owner or an experienced small business advisor. We talk about their experiences. So what you'll get is practical, real-life advice, different takes on everyday problems, and a renewed confidence to tackle your own business challenges.

[00:01:28] A big welcome in to edition 149 of Small Business Banter. Geo George from Mayfly Ventures is in the house today, Geo. Thanks so much for coming in. Thanks, Michael. Great to be here. All right. Let's talk about what you do at Mayfly Ventures, what you've done personally.

[00:01:51] I guess what we're really wanting to tap into today is your model for partnering, investing in businesses, both new and existing, and the particular approach you take to doing that. I found it deeply interesting. One of the things I pulled off of your website was we're aiming to do things 2% better, but thousands of times.

[00:02:21] So that as a philosophy for me is wonderful. So anyway, tell us about Geo George and Mayfly Ventures. Yeah, absolutely. So look, at the heart of who we are and what we do is this intersection of strategy, creativity, and technology.

[00:02:44] So we're a venture studio that takes ideas to market, and we specifically focus on vertical SaaS and AI. So building really incredible experiences and products that aim to transform industries that it operate in. Prior to this, I worked in a venture fund, which had sort of a venture studio attached to it. And even before that, I've worked in government running a COVID operation.

[00:03:14] I was consulting for a bit. I've worked in a startup. I had my own startup. So I think this is one of those things where you can't quite connect the dots looking forward. But sometimes when you look at all the experiences that you've had, it's an interesting way how everything just seems to align,

[00:03:39] even though it on face value seems really disparate and a bit of a dog's breakfast in terms of all the different things that I've done. But you've been – can I just – you've been on a Coddywomple. I found this really cool new word, which I'm about to put into my newsletter, and it's basically taking purposeful steps towards an unknown destination or something. Oh, it's okay. It sounds a bit like that.

[00:04:05] So, you know, you'll get somewhere good, and you take first steps. So – Coddywomple. Pardon? Yeah, it's a – Coddywomple. Coddywomple, I think. Look, you know, it's so brand new. I can't even – I probably – I'd be 90% confident I could spell it, but I got the – I got what it was about, and it's, you know, it's a new word to me anyway. So – but, you know, that – what you talk about is bringing a whole lot of experiences to something,

[00:04:34] and, you know, all owners of startups of existing businesses all struggle with, you know, a whole lot of things, including, you know, where do I go to get some help or do I actually need help? So, you know, bringing all that breadth of experience to a situation is – can be incredibly helpful. Yeah. Look, I mean, at the heart of it, we're solving really interesting problems, and, you know,

[00:05:01] the mayfly is an extension of my general philosophy of, you know, there's many problems out there to be solved, and someone's got to do it, right? Like, that's how you make progress forward. Yeah. And that's the 2% thing, and, you know, it's easy to put off something that looks like if I don't get 100% of it done, I might as well not start. Yeah.

[00:05:29] So, come back to – but just to put things into the frame a little bit, you – there's a couple of things, correct me if I'm wrong, as a venture studio, you do invest your money, but you also invest in other ways in businesses through services. Is that – so, you know, if somebody's got a really interesting venture, you could be an investor in a couple of different ways.

[00:05:56] And also, it sounds like you work with newer ventures, but it hasn't stopped you anything in the past from working with existing ventures who perhaps, you know, want to carve out something or just totally re-engineer their business. So, it's not like it's just totally about a new startup. It's about a business with a need. Correct. Yeah.

[00:06:23] So, you've actually kind of defined the two parts of our business pretty well. So, the first part is, you know, working on those like Greenfield new ventures. And for that, you know, depending on the circumstances, we might invest in the venture ourselves. It might be a joint venture or we might be building out a venture on contract, right?

[00:06:52] And what we're really bringing to the table is the experience of having launched multiple SaaS and AI products. So, we can roll out the playbook in a fairly repeatable way of combining venture strategy with the design, the development, and the execution piece.

[00:07:16] So, on average, ventures that start off with a venture studio have a 30% higher chance of success, right? As compared to… As compared to… DIY. …go in on their own. Yeah.

[00:07:46] …go in on their own. So, we've identified a burning platform problem. And more importantly, they have access to the customers who would pay for a solution to that problem. We partner with them to execute on the product itself, the technology solution.

[00:08:04] We're either investing our own capital and or bringing in investors in our network to fund the venture. You know, and the idea there is… That's how we get, you know, the best alignment possible between the founders, the investors, and the venture partner, which is us. Yeah.

[00:08:34] The second part of the business is more along those contract venture building. So, we're partnering with sort of bigger established businesses who want to launch a new product into the market but either don't have the capability or it could be a capacity thing as well.

[00:08:55] So, they would partner with someone like us to understand the problem, design the solution, develop it, and then take that to market. And then we can help them scale the venture through our partners, hiring the right talent and setting up the right structures and the processes to build sustainable growth over time for that venture. So, get to market quickly.

[00:09:23] And it's part of it about the minimum viable product kind of philosophy, which is about not waiting for perfect. Yeah. Getting there, iterating, learning, remodeling, redesigning, but being there. Is that a major part of it? 100%.

[00:09:49] So, it all comes down to having an intimate understanding of the core root of a problem that you're trying to solve. Oftentimes, you build a product and then you release that to the market. And, you know, it's very unlikely that you've hit the problem on the head and identified that right solution.

[00:10:17] It's about engineering your venture in such a way that you maximize your chance of getting to that problem solution fit by taking in rapid feedback, being able to iterate on your product or service, and then executing on that. And then repeating that over how many cycles it takes to eventually get to that what we call product market fit. Yeah. Yeah. Is it?

[00:10:41] And is that like a cultural thing potentially maybe in bigger organizations, but even in smaller where, you know, we don't do something until we're really sure it's going to work? Like, you helping to shift the thinking that, you know, if you've got a big enough problem, you know, to wait for perfect, it could be years. Someone else could come in and take you, eat your lunch. Yeah.

[00:11:09] So, do you have to work on that psychology or that philosophy about getting away from being absolutely 100% sure this is going to work to we're going to get in there and iterate? Yeah. Look, it's a human thing, right? Humans are deeply discomforted by uncertainty, right? Right.

[00:11:35] And, um, uh, Reid Hoffman has a good saying around this, which is if you're not embarrassed by the first version of your product, you've launched too late. Right. And it goes to the heart of, you can never engineer out the uncertainty in launching a new venture. Right. Um, if you can, it's probably, uh, you know, not an exciting enough problem and it's probably not a problem worth solving.

[00:12:02] Um, and ultimately the startup mindset is that you have to be deeply familiar with uncertainty and it's about navigating that uncertainty in real time, um, and make progress towards solving a real problem. Um, and that doesn't happen in an abstract conceptual sense.

[00:12:29] It happens by getting direct feedback from the market. Um, and, you know, put simply like doing more of what works and less of what doesn't, um, oftentimes, you know, and, and we do work with sort of larger businesses. And there is a bit more of an education curve around this approach of, um, making the risk profile work for you.

[00:12:55] So we can never completely eliminate the risk of a new venture, but we can certainly help manage that. Um, and the reason why these businesses come to us is, um, often the risk profile of established businesses, uh, is very different to how, you know, someone, um, starting from scratch, uh, would, would view the opportunity. Yeah. Yeah.

[00:13:22] I think it is part of what you're saying there, the bigger organizations, um, need to keep, they got more to lose in some ways. So they need to keep, um, trying new, new ways to tap into their customers more deeply or to, you know, so is that a part of it? They're almost like a bit of a portfolio investor.

[00:13:48] So they got this nice core business, but yeah, if it's nice core business, someone's going to be looking at it going, I want a bit of that. So they can have, you know, various different new innovations to, to kind of rebirth the business. Yeah. Renew it. I think it's interesting, right?

[00:14:08] Because we're in a really, really sort of, uh, meaningful state of transition, right? Um, there's this concept, um, that came out of RMRT recently, um, called, uh, the state of super transitions.

[00:14:29] So it's this intersection of a number of different technology paradigm shifts that are happening, including AI, including, you know, blockchain, um, um, zero base, zero knowledge proofs. Like that's almost forcing this tecnotic shift in how business is getting done.

[00:14:52] And I think a lot of these existing businesses will have to reconcile with the fact that, uh, you're either moving forward or you're dying. Um, and look, sometimes that the death of that business takes a longer period of time. Sometimes it happens a lot more quickly.

[00:15:13] Um, but I think the role of innovation in that sense, the role of taking risk is, you know, so you're born again and again, right? The existing parts of your businesses might die, but entirely new product lines and new, um, ways of solving customer pain points arrive.

[00:15:34] And, and businesses who can recognize that, but still hold a common narrative across that innovation cycle, whether that's been a deep connection to a particular industry or, you know, a common customer base, whatever that might look like. I think those businesses will, will strive, um, in, in this age of really fast software, AI, um, you know, changing labor dynamics. Yeah.

[00:16:04] It's a really interesting time. Yeah. It's, it, it, it, it's deeply fascinating. Do you want to talk about your take on, uh, it seems, you know, AI hasn't been, it, it seems like it's come from nowhere. It's been in all sorts of different iterations itself for, for a fairly long time, but it's certainly in terms of general business discussions. Now you can't have one without having some reference to AI and what it can do for you.

[00:16:33] So what, what's your take on that? What, what possibilities is it creating, especially for smaller businesses who are tapped out with all the things they need to do day to day? Um, how can it help them as well? Yeah. I do think a lot of people are looking at AI in a, in a bit of a strange way. Like they're looking at it as a threat.

[00:17:00] They're looking at it in terms of like, uh, how could I extract more value? Um, you know, like how, like how do we stay ahead of the curve? Like that, that kind of themes. But the reality is like that AI is this horizontal enablement layer, right?

[00:17:21] Where there's, uh, the, the, the heart of business, the IP around it is the proprietary set of workflows, knowledge, and capabilities that gets deployed on a day-to-day basis, right?

[00:17:36] What AI, uh, has the ability to do, at least, you know, this, this wave of, um, generative, almost agentic, uh, AI is it either, uh, it enables improvements in how business is getting done currently, uh, currently. Either by ways of efficiency or efficacy, right?

[00:18:01] So in that sense, it's not just enough to think about AI in very isolated sense. It's about how can we leverage this, uh, suite of new capabilities, right? Across every aspect of the business and fundamentally re-engineer our processes so that you can, um, you can, I guess.

[00:18:28] It's, the word isn't not get left behind, but it's how do you, um, drive greater progress towards the outcomes, uh, that you're seeking to get to, right? Because there's going to be a rift between businesses who could do this, uh, horizontal enablement integration really well. And those, uh, that can't do that.

[00:18:55] Um, and in, in that age, it's almost like, um, you know, there's, there's like a, um, like everyone's been driving a five speed manual. And then, uh, you know, all of a sudden you get like the sixth gear that, you know, some people have access to and others don't. You're just going to go, you know, faster. You're going to perform better.

[00:19:19] Um, and then that's going to cause a big rift in the value that these companies that understand AI very well can provide. And the other companies, um, you know, who, you don't quite understand AI and who haven't been able to think through that deep integration of AI into their business. Um, you know, they're, they're probably likely to get left behind. Yeah. And this is, I think that's a really significant turning point.

[00:19:48] It's, it's, it's unquestioned. There's going to disrupt change, put businesses out of business, create new ones. But for the, for a lot of, a lot of founders and owners out there, it, I think one of the things that I like about what you do with your, with Mayfly is that you can be that for them. So you must embrace, you must understand and embrace AI.

[00:20:18] You don't necessarily, the way you invest in businesses is to become a partner with them. And so you, someone's scratching their head going, I know I've got to do something about this AI, you know, but you don't have to, you know, you don't have to, um, it's not like it or leave it. It's, you got to deal to it.

[00:20:41] Get a partner, get some, you know, try some, do a 2% thing, get, get somebody to get you going with a little bit of R and D yourself. But if there's a fundamentally important opportunity or restructuring of your business needed, think about somebody coming in as a, as a partner in some way to do all that for you. Cause that's what you do day in, day out. Absolutely.

[00:21:07] And I look, and you know, from our experience, what ends up happening is you gain deeper insights into your own business. Cause a lot of, um, the, the success around integrating AI into your business is going to come around to how well do you know your business, right? Like what are the key value drivers? What are those catalysts that, uh, convert inputs into outputs in an asymmetrical way?

[00:21:37] Like, so. That can be scary for, that can be scary because there are sort of, even for owners who have got really good businesses, it can be unspoken or on. And it's, they think of it just as the way they do things. It's, it can actually be quite unique or quite complex, but they, they, it's just how they do things. So it doesn't seem special sometimes to them or doesn't seem worth documenting or.

[00:22:06] Yeah. Which, yeah, I mean, look, I, I get that because, you know, we're like Mayfly is a small business as well. So we have our own kind of, you know, processes and systems that, um, you know, like there's the stuff that gets recorded and documented. And then there's the stuff that just happened, right? So it's almost like the, the systems and processes versus the culture, um, element.

[00:22:34] So, uh, that's always going to be, yeah, I wouldn't be surprised if it's a confronting process, but I also think it's a, it's, it's a very, it's a beneficial, um, process as well. Yeah. Yeah. And it's one, I think that needs, um, context to, to, to drive somebody to think about it. And, and the context could be, I'm not making enough money. I, maybe I'm wanting to think about selling.

[00:23:04] Maybe I've been approached. Maybe I'm spending just way too much time there and I'm done with that. I think particularly this kind, this time of the year, the, uh, a lot of, a lot of founders and owners, uh, we've had maybe hopefully had a bit of a break in the coming back going really, do I want to, what am I going to do differently this year to make it easier, more profitable, less time, less stress.

[00:23:31] And so that, that's, I think that's the context and that is so vital to, to prompting somebody. And in fact, motivating them to, to actually take a 2% step and say, all right, I'm going to, I'm going to do something new and different. I'm going to, I'm going to make a change. That's right.

[00:23:51] And, you know, and that 2% thing could just be, um, you know, having a bit more of a structured approach in understanding, uh, how your business operates. Right. So creating some documentation or, or, or even having a think about like, what are those low hanging fruits in, in which we can make a meaningful difference in terms of efficiency or efficacy?

[00:24:20] Um, yeah. Yeah. And, and, and, you know, these, uh, it's, it's, it's a good time of the, it's a good time of the year to, to have that reflective, uh, time to, you know, if you do want to, if there's something down the line that you know about, it knows coming or that it's your time to perhaps move on or it's time to really capitalize. Um, it's a good time.

[00:24:45] What a, just practically, what, what a, I mean, we, we talked about the minimum viable product approach, which is a brilliant book. I can't, I can't remember that. Is it Eric? Yeah. The Lean Startup. The Lean Startup. Yeah. I mean, look, you've got a, it's a great book to read. It's, it's really kind of encouraging you to be brave and just get it out there. But, um, as a, there's so many reasons not to do something. Yeah.

[00:25:15] That is a, that is a brilliant, you know, read and a brilliant, um, approach. But, um, but practically the, the sort of, the AI tools or approaches or opportunities, the, the, the couple that you think might be really achievable or doable to get someone some momentum in their, in their own business? Yeah. Yeah.

[00:25:44] Um, I think one area that a lot of businesses could utilize AI on is just like customer service or connecting with your customers, right? Um, a large part of driving sustainable growth in your businesses, how, how well of an experience your customers have in engaging with their brand. And there's some really low hanging fruits there.

[00:26:11] Um, you know, integrating useful, um, generative AI tools and being able to respond to customers, customer inquiries quickly, um, providing customers with, um, self-service options.

[00:26:26] And, you know, uh, if, if you're running an e-commerce business, you know, changing your, um, your package delivery or, um, or your address, you know, whatever those common, uh, customer pain points are, um, you, you could probably implement AI to alleviate quite a few of those. Right. So, so I think that there's some really low hanging fruits in how businesses connect with their customers. Yeah.

[00:26:55] Um, and another one is how businesses acquire customers. So using AI in your, the top of funnel stuff, um, you know, whether it's across like digital marketing and, um, like doing programmatic SEO, um, or, you know, like the, the content marketing side as well, like creating engaging content. Um, on a regular, um, regular cadence and schedule that resonate with their, uh, with their users. Yeah.

[00:27:25] Yeah. Yeah. There's some opportunities there as well that businesses can start actioning straight away. Yeah. Is that programmatic SEO? Do you just want to explain that briefly? I was having a conversation yesterday and, um, you know, the SEO agency that is, we've all,

[00:27:47] probably used them with varying degrees of success there, you know, there's other, there's other opportunities to, to do SEO cheaper, um, more quickly. Is that, is that what programmatic SEO is about? Yeah. Look, I don't think SEO businesses, agencies are going to exist in five years time. Like, and, and that's, that's being conservative as well.

[00:28:12] Um, so programmatic SEO is creating, uh, really tailored niche content, um, for what your potential customers might be searching for. Right. And, um, it's, uh, it's hard to do at scale if you're writing really long form articles or content about a specific topic.

[00:28:36] But then it's about thinking, how can you take that bit of content and personalize it to different locations, different customer demographics, uh, different keyword searches? How do you, how do you kind of, uh, increase the footprint of your content marketing efforts, um, through personalization and customization?

[00:29:01] So these are areas where generative AI really shine because it can do that personalization at scale. Hi there. It's just a quick interruption to the podcast and it's a message from Kerr Capital, a supporter of the podcast. If you're a business owner thinking about selling and you're unsure about what you should do, well, the worst thing you can do is jump straight into an unprepared business sale. Cross your fingers and hope for the best.

[00:29:30] If you want to take control, get a sense of what your business is really worth and a plan to make it more sellable, then head over onto the Kerr Capital website, check out the value and sellability diagnostic. If it piques your interest, contact me, Michael Kerr, or book one of the free 45 minute diagnostic calls. Now let's head back to the podcast. There are a lot of small businesses that are good, good performers.

[00:30:01] And we can all go in there and we can all be, uh, constructive about what you might do differently and, and, and, and 10 different ways to grow the business. And some owners are at a stage where they, it's like, no, I just want out.

[00:30:20] And, you know, and it's, and it's still, it's still a solar business, but I haven't seen any businesses that from trades to services, to manufacturing, to wholesale distribution that couldn't benefit from having a presence online. And now with generative AI and, and the sort of tools to create for relatively low investment.

[00:30:48] Cause it kind of, when somebody comes along to, to buy that business or one of the things I want to understand is, you know, the, is their, their presence, like their, their brand. What, you know, what, so it's all in the owner's little black book.

[00:31:09] It's pretty, you know, I can having a, an, an online presence and a strategy and, and a sense of new, new customers coming to you because we've got something out there is just, it just adds so much confidence for, uh, for the buyer of a business. And, and having, you know, the old, an about page as your website is, you know, it's a start, but you can do more. Yeah.

[00:31:38] And, and, and it creates energy in, you know, a sense of, well, there's more to the business and just the existing, um, owner's relationships or the staff's relationships. Yeah.

[00:32:18] The systems, the processes and the brand, um, that's associated to that business. Yeah. And like, it, it, it, it gets to, you know, a more traditional, it's goodwill. It's a, it's a brand presence. It's a, uh, it's a market presence and, um, you know, more, more potential, uh, buyers for your business will find you as well if you're active, you know, with, with doing that kind of stuff.

[00:32:44] And, um, yeah, it's just, um, you can have as many, you know, you can have contracts with customers, but that was in traditional exit planning. If you're going to buy a business, you want to make sure all the customers are locked in and, you know, it's, it's as good as the exit clause in the, in the contract.

[00:33:02] And, um, so, you know, those broader things, um, uh, you know, always thinking about ways to, to paint a richer story about a business that's, um, wants to sell in five or 10 years time. And, and, and, and those are the, some of the things that AI is enabling.

[00:33:21] And, um, but can you talk about some of the, the, you know, not the names, but the, the types of businesses that Mayfly have invested in partnered with? Yeah. Um, I could go through kind of the order of involvement, um, that we've had across different industries. Um, so by far we've done more hospitality tech ventures.

[00:33:50] Um, I think we've done three, three hospital tech ventures where, um, we're, we're invested, um, in those ventures. Um, and then hospitality is a super interesting place because, you know, uh, I think they cumulative contribute to 70%, um, sorry, $70 billion, um, in income.

[00:34:14] Um, across the Australian economy, across bars, pubs, restaurants, um, yeah, which is a huge, uh, huge number. But cumulatively they're working on three to 5% um, net margins, which is like, that's not a good. It's lying by the seat of your pants kind of stuff, isn't it? Yeah, yeah, yeah. Correctly. And, um, the stats around first time hospitality businesses, it's, it's not great. Yeah. Yeah.

[00:34:42] So there's a lot of opportunity, um, that we see in that space, um, clearly because the volumes are so big. Yep. And any improvements in sort of marginal margin expansion directly goes to the bottom line, which is, um, you know, which represents a significant opportunity. Is that, yeah, it's like, it's a, it's an incredibly vibrant and fast moving industry.

[00:35:06] And if you're, you can be killing it with a new wine bar, new restaurant, new cafe, and, uh, like you can turn it on tomorrow. Like I've, you know, I'm, I know of some outstanding operators and there can be 20 venues in a, you know, precinct around say Collingwood or, you know, and some will, some just have a, um, it must look easy from the outside.

[00:35:35] Like, cause, uh, cause, uh, cause, uh, cause it's so many other people start up, uh, and don't succeed like some of these, um, you know, really experienced smart operators. But yeah. Yeah. What, what sort of stuff were you doing with those businesses, Gio? Like. Yeah. So, um, everything that we do has, uh, like a tech focus around it. Yeah. So, uh, one of the recent ventures that we just launched, it's called Choosy.

[00:36:00] So it's a partnership with Clipboard Hospitality, uh, and Mayfly where, um, we. With who, sorry? With. With Clipboard Hospitality. So they, so they're a, um, they're a platform to connect HOSPO professionals with each other and, um, businesses. So they provide a lot of recruitment solutions as well, um, the HOSPO space. Right. Um, and we created a contract employment marketplace. So think Uber for HOSPO shifts.

[00:36:30] Um, you know, it's got some really interesting, uh, and fun features in the product, um, that make it super appealing. For businesses who want to get short term staffing in either for events or to cover, you know, what they call rockstar shifts. Um, or for HOSPO staff who want to earn some extra money on their own time, um, and, you know, get paid straight away. So you finish your shift, you get cash in your bank account.

[00:37:00] So, you know, thinking about like, yeah. Yeah. This is a verdict. This is the vertical. This is a kind of a vertical that you're talking about where you. That's exactly right. Yeah. Your, your infrastructure platform. Exactly. So focusing on like really niche problems around short term employment. Uh, another one that we did is, um, around, um, you know, providing the ability for hospitality businesses to connect with their own community.

[00:37:28] Um, uh, so we created a rewards and loyalty platform called Makudu, uh, where we partnered with a, um, hospitality group, uh, Zengal, uh, hospitality. Um, two really incredible founders. They came to us, um, trying to solve this problem. And then we just loved how they worked and, and, and how big of a kind of a space that this was. Um, so yeah, that, that hopefully gives you a sense of like.

[00:37:56] Your ears are always open for what problems business owners have. Yeah, correct. And then we love it if there's a theme involved as well. Um, if that's right. So if there's a theme like, like hospitality, uh, it's a really fun industry to work in. So yeah, we'll have to do some more hospitality ventures.

[00:38:16] Um, but you know, just recently we're, um, we're working on a med tech venture, um, with, you know, these three incredible founders, um, who came to us with a problem and an opportunity. And, and, you know, we, we partnered with them, um, help raise some capital for their venture. And, you know, we're, we're, we're looking at launching a new product in the, um, in the space for managing musculoskeletal, um, diseases.

[00:38:46] Okay. So yeah. So again, yeah, very niche, but, um, was the profile of those founders, uh, was there a sense of urgency? We, we, we know what the problem is. We know how, we know how, how it could be fixed. We could do it ourselves, take all this time or just smash it out.

[00:39:13] If that's not the right terminology, but you know, yeah, you talk to you and you, your business has expertise in maybe how, you know, helping find that capital, but also just getting to market. Yeah. Yeah. So in, um, in this particular case, so maybe I'll just talk about how we think about, um, these investment cases, right?

[00:39:35] Um, so there's a, so our hypothesis is, um, very much around like finding boring businesses, right? Um, that are solving for very niche problems in a sizable enough industry. Um, and the criteria that we use is, um, you know, do we have a partner that provides us with asymmetric, uh, insights into a particular industry?

[00:40:04] Um, and, and the way that you do that is they have a deep familiarity with that industry, like their domain experts, um, you know, um, they, they know what the burning platform issue is intimately. Right. Yeah. Uh, the second thing is, um, can they provide us with sort of the capability to distribute a solution? Right. So having access to, uh, the customers who are willing to pay for that, um, solution.

[00:40:34] Uh, so there's a, there's a bunch of tactics that we can kind of roll out here and then we have a whole validation framework, um, that we worked, um, that we applied on this particular venture around securing partnerships and letters of intent. Um, you know, um, you know, um, you know, these, um, you know, these pre-sale contracts, um, the third element is, um, you know, what, what is the, uh, execution capability look like? Right.

[00:41:04] So do the founders have a demonstrable experience or track record in being able to just execute in different domains, not necessarily in startups and technology, but, you know, can, um, you know, what we say to, can they get shit done? Right. Yeah. Um, and, and that's, uh, that ability to execute is probably the most crucial thing that we, that we look for. Yeah.

[00:41:31] Um, and if, if all of those factors align, then that represents a great sort of, um, first, um, uh, basis for us to kind of make an investment case around, okay, is this something that we can add a lot of value to? Um, and is there a sizable opportunity here to pursue? And, and the right people on the team. Yeah. Correct. Who have, uh, yeah.

[00:41:57] Incentives, but also have a proven or, you know, a capability that is obvious to you. Yeah. Yeah. And, and, and which is why when we work with investors, uh, to fund some of these deals, it's a great, uh, opportunity for them because, you know, if they were to try and do traditional angel investing, um, they're working.

[00:42:24] They're, there's a lot more risk involved in angel investing because they, they don't know what the quality of the execution is going to be like for the founders. Right. Um, whereas in this case, it almost becomes a financing activity where we've got the, the demand validated. Right. Um, we, we know that the founding team has a capability to kind of execute and take the product market.

[00:42:50] Um, and then Mayfly as a technology partner, as a venture has a, uh, a track record of being able to execute on, um, on that technology component. So for the investor, it represents a much more de-risked approach to, uh, investing in high growth companies. Yeah.

[00:43:10] Uh, this, this concept, this pool of boring businesses, it's, it's really, it's fascinating because there are a lot of, a lot of businesses out there that are the owner and the business kind of fly under the radar. They're, they're, things are okay. Not shouting, they don't need to shout from the rooftop because they're, the business is working well enough for them.

[00:43:38] And, uh, it's, you know, the, there's an, there's an American, um, uh, I can't think of her name right now, but she's, her platform is about buying boring mainstream, main street businesses, which they call them in the US.

[00:43:55] And it's, uh, she, she, she's unbelievable to, um, she's, I think she's inciting a movement, but you know, right, right here, right now in Australia, there's, there's many, many businesses that, uh, would meet that criteria. They're solid and bring in some other capabilities and, um, around tech, um, or just better process, you know, better processes.

[00:44:22] You, you know, you could really ignite some of these businesses and yeah, it's, uh, pardon. That's, that's a great point because I know we've, we've spoken about, um, like, yeah, I think there, there is this opportunity around rolling up these businesses and introducing some of these new technology or enablement layers that could appreciate the value of the business quote significantly.

[00:44:50] Um, I just haven't seen anyone do it in a very consistent way, but yeah. No, it's look, I think there's a few that at the moment there, there are these, there's this growing awareness of, I think it's a movement away from the really sexy unicorn startups to solid main street, boring existing businesses that, that have customers.

[00:45:20] You buy it in the, and, and, and, and the faxes pinging tomorrow or that, you know, you're getting emails, you know, you've got, or people are walking into the business and, and there's a lot of them. I think where it, um, and there's plenty of money around to buy these businesses. I get approaches all the time. Their criteria has got to be really highly profitable. It's got to be under management, ideally.

[00:45:46] You know, if you've got one of them, you don't, you don't, you're not inclined to sell those kinds of business. So we go back to, there's a whole other lot of businesses that aren't for sale because the stuff that's for sale is something, there's some gems in there. There's a lot of stuff that you got to pour through a lot of stuff. So, you know, if you don't know what you're looking for, it's time consuming and part of the education. But, so there is other, there are businesses that are not for sale.

[00:46:14] So you've got to, they, they are boring, solid. And, and that's where I, you know, so yeah, I haven't really, um, I've come across a few people that have, that have, that have taken, quietly gone about doing that and, and, and started to, they can build off a base of this. There's, there's existing cashflow, there's existing customers and, uh, take a while to get to know the business.

[00:46:40] But then, yeah, that's look, it's a, I think that's where we'll, you know, we'll, that whole entrepreneurship through acquisition, uh, that, you know, another iteration of that will be investors coming together. Mayfly brings the tech, someone else brings a bit of capital, bring an experience operator from the industry. Let's buy one and then, and then let's buy another and another and, you know, we'll platform it all.

[00:47:11] Hey, maybe there's a start of something right here. You know, get a couple more people on board. Yeah. Well, there's, you know, there's, there's going, you know, there are hundreds of thousands of small businesses out there. Um, and the, you know, there's a, there's a large number for sale, but, um, there's a lot more that aren't for sale, but you knock on their door or ring them and, and a lot of them will be interested to have a chat. But that's another story. I bet, yeah.

[00:47:38] Um, Gio, look, I think that's probably, um, a good note to, to, to wind up on. I'm conscious of your time and you've got plenty going on down there in Collingwood and, um, really thank you. I love what, what you're, what you're enabling, um, owners and, you know, of new businesses, of existing businesses to, you know, to consider at least.

[00:48:04] And you're kind of on top of what's, um, a few of the things that intersect around, you know, taking a, an idea or an existing thing business to something bigger and better and more sustainable. So if, um, someone wants to have a chat with you and tell them, tell you all about their problems that you can turn into a solution. What, what's the best way to get ahold of you? Absolutely.

[00:48:32] So feel free to check out our website, mayflyventures.com or just Google Mayfly Ventures. Um, feel free to add me on LinkedIn, Gio George, um, or shoot me a, an email, geo at mayflyventures.com. Cool. All right. Any, any parting, um, any parting pearls that you want to share with us? Yeah. I think just to, uh, emphasize what you're saying before about boring businesses.

[00:48:59] Um, one of the things that we say at Mayfly is like boring businesses are great businesses. Right. Um, so yeah, um, everyone tends to focus on the, the, the sexy, you know, bleeding edge stuff, but, um, there's, there's a great deal of value being created from, um, these businesses that very much fly under the radar. So shout out to boring businesses. We're, we're in, um, unanimous agreement on that, Gio. Right.

[00:49:29] Well, I'll look forward to, um, uh, hearing more about Mayfly and to catching up when that, when it works. So, uh, really appreciate your time today, Gio. Thanks, Michael. Well, I hope you enjoyed that episode of Small Business Banter and I hope it was helpful in you getting the most out of your small business ownership.

[00:49:52] To subscribe or listen back or to check out any of the resources or information we talked about today, head over to the website, smallbusinessbanter.com.au. Or if you want, search up small business banter on your favorite podcast player. Don't forget to subscribe. And if it was really helpful, I'd love it if you told another business owner about the podcast. If you thought it was exceptionally helpful, then how about you leave me a five-star rating?

[00:50:19] If you think I can help personally, please reach out to me, Michael Kerr via the website. There's a new episode out every couple of weeks. We'll catch up then.