David Tudehope co-founded one of Australia’s original startups.
You left a corporate job at 25 to go head-to-head with Telstra. What gave you the courage to do that?
I left a safe banking career in ’93 during Australia’s last full-on recession. But my rationale was that I could get a job back in banking, and I’d probably get my old job back two or three years later. As a banker, I’m more risk-focused than the average person, but I rationalise my downside risk.
So if the business failed, I’d lose a year or two trying to make the business work, then I’d get another job. And that’d be okay. I didn’t have a mortgage, I didn’t have children, didn’t have commitments, so the downside risks didn’t affect other people. When you’re 25 you are less worried about failing.
What skill did you have to learn quickly when you went from banking to being an entrepreneur?
I’d never sold anything before, because in the banking world, the customer comes to you. So, I had no idea how to sell anything. And I probably had a sceptical view of sales being in banking. But as a startup company, you have to go and promote your services to people. So, I went along to one of the Tony Robbins conferences at the Sydney Convention Centre and I learned how to be a salesperson.
I realised through that process that sales is a profession just like any other, with a lot of discipline and method to being successful. It was a very steep learning curve and some parts were very unnatural for me. But the fact that I had everything on the line – there’s nothing like that to motivate learning and applying the theory.
You must have had sheer belief that your business idea was going to work. What gave you that belief?
Two pieces of thinking really shaped me at the time. One was a quote that I carried in my pocket for about the first decade of Macquarie. It is a fantastic quote by 30th president of the US Calvin Coolidge about persistence: “Nothing in the world can take the place of persistence.” That really captures the challenge for startup businesses. So many obstacles and challenges are thrown in your way, and you have to have a lot of persistence and courage to be successful, and to your point, a belief that you will be successful.
The second one which shaped me was called the Stockdale Paradox, named after admiral Stockdale, who was the highest-ranking US prisoner-of-war in Vietnam. After many, many years in captivity his observation was that the people who survived the prisoner-of-war camp
were the ones that had absolute belief that they would be released and would live life at the other side.
And of course, the people who gave up hope didn’t survive. I think that talks to your question, which is that one of the most important parts, is to have the belief that in the end, you’ll be successful. You need to have that deep belief inside that you will ultimately be successful, it’s just a question of time and effort and creativity on the way.
When choosing which trends to back, what’s your decision-making process?
Australia is a long way from where a lot of the innovation occurs. For the last 28 years, we’ve been doing what we call innovation study trips. Sending diverse teams of people to the US and sometimes to Europe, to look at one or two big tech trends. The magic of this is that we focus on one or two big questions or trends that we’re seeing emerging, and we go deep – really deep.
We hear their stories, we talk to consultants in that new area, we may talk to some customers, or we may talk to a few others.
We may come away and think, that’s a fantastic trend, but there’s no market for it in Australia. And we kill it.
Is there anything in your daily routine that you can attribute to keeping you sharp, sane and motivated?
On my bedside table, there’s always a biography. The interesting thing about biographies is that depending on where you’re at in your career and life, you take totally different meanings from them. And the biographies I love reading about are ones about people who’ve reimagined or transformed their business or their country in ways that have been profound. And I can’t help but relate it to my business.
One example is the biography on Kemal Atatürk, the founder of modern Turkey. Just the most amazing man, who transformed it from this religiously based former Ottoman empire and brought education to the whole population, created opportunity for everyone. It was a fascinating read, and I loved it. Then I read the same biography about 15 years later and I got a completely different take away from the whole story.
Today for example, I’m far more focused on two topics. One is the broader issue of leadership, not just me, but the leadership inside the business, and what’s effective leadership, and what’s not. And the second one is the purpose piece, which has always been there, but really talking a lot more about it proactively, and this is making a difference in markets that are underserved and overcharged. And I just look for opportunities to reinforce that, not just to repeat it – that’s boring. But to reinforce it and to reinforce examples of people that have done that in business.
Is there a characteristic of yourself that you think is underrated by other people?
The idea of giving people freedom to take responsibility for the business, I think has been one of my successes here.
I think it’s underrated because people fear that if you give your senior leaders too much freedom, they’ll make mistakes, and of course the answer is they do make mistakes. But if they’re good at what they do, they’ll make far more successes than mistakes, and in the end it’ll all work out and they’ll do really well. And the pluses will outweigh the minuses. And I think you get such a high level of engagement and ownership, and people sweat the costs and sweat the customer experience far more if they see they have that freedom.
If I gave you $10,000 to invest for, just say a niece or a nephew, where would you put it? (Apart from Macquarie)
I would put it in an equity index. My background was in banking before I did a finance degree, and I do believe that the best way with the lowest cost to invest $10,000 is equity or another index. It’s very hard to beat the market.
I think they’re great places to invest. If you’re not an active investor, you’ve got a day job as I do, then you don’t really have time to sweat the market, and therefore the index is critical. Otherwise, you’d have a situation where you missed a turn of the market because you were busy doing your job.
This is an edited extract of the conversation.