Ep40: From Zero to 120 FTE and ASX-Listed in 2.5 Yrs in Marketing & CX

Recently ASX-listed XPON Technologies Founder and CEO Matt Forman shares the incredible story of growth from 0 to 120 staff in 2 years.

Third-party cookies are about to become a thing of the past.  Company’s reliant on using cookies to track users and personalise experiences to support their customer acquisition and customer experience objectives will find it increasingly difficult to kick goals without leveraging their own data.  

Enter stage left, Matt Forman the Founder and CEO of XPON Technologies (www.xpon.ai) who is materially disrupting how customers gather, analyse and leverage their marketing and customer experience data to drive decisions in their business and is taking a leading role in creating blended reality virtual experiences for those seeking to reach customers in new ways.  

You’ll love this week’s episode with Matt Forman, Founder and CEO of XPON Technologies where we explore the incredible growth journey of the company which in two years went from start-up to 120 team members, global reach and listed on the ASX.  We explore the numerous transformational drivers of growth in the business, how XPON built their bench strength and created a unique culture that’s successfully sustaining rapid growth. 

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[00:00:30] Sean: G’day everyone and welcome to the ScaleUps Podcast where we help first time Founders learn the secrets of scaling so they can fulfill the potential of their businesses, make bigger decisions with greater confidence and maximise the impact that they can create in the world. I am your host, Sean Steele, and I have a very special guest today for you, Matt Forman, Founder and CEO of Xpon Technologies Group. How are you today, Matt? 

[00:00:51] Matt: Good day, Sean. Fantastic. Thanks. How are you?

[00:00:53] Sean: All right. I'm very good. Good to see you again. Now, look for those, I might just give a quick, a quick few insights into sort of your background and the Xpon business, but please make sure you correct me if I'm wrong. So, you founded, you and I met a few times, we've known each other for a while back, actually from the sort of world of advisory, you founded and led five different digital start-ups, including lots of capital rising, and you looked with PE- Private Equity and you do a whole bunch of mentoring. I know at River City Labs and the Innovation Centre up on the sort of technology incubators up in Queensland on the Sunshine Coast, where we both happen to live. And you found an Xpon back in, I think it was late 2019. So, I guess that was just pre-COVID. Interesting timing trying to build a business. 

[00:01:40] Matt: Yes. 

[00:01:41] Sean: And then you went public two years later, end of 21. And Xpon, I guess, as a business, is underpinned by two kind of key platforms, Wondrous, which is where someone, where a client centralises all their marketing and sort, and customer data to help them deliver a more personalised experience for customers. And then you've got Holoscribe, which is an extended reality experience with a platform. So, people who don't have specialised skills can therefore publish extended reality and 360 type content across, any channel. And you've got customers in Australia and New Zealand, UK and Europe, and you’ve gone global pretty fast, and you've got a team. How big would your team be now? Is it 75 to…? 

[00:02:24] Matt: I think it’s about 120 now. 

[00:02:26] Sean: 120! That's moving fast. And your core development team is in Vietnam, which is also, I feel like, I don't know, everyone has got their sort of development teams off shore. Vietnam seems like, I don't know whether you were a first mover, like there was no one else playing in Vietnam when you got there. Because no one else says to me that that's where their core development team is, but you, was sort of interesting choice. Did you feel like you were early there?

[00:02:50] Matt: Well, we actually did an acquisition, the Holoscribe platform that we have. We acquired that back in April of 2019. So right when COVID started to really bite, April, 2020. And I had a small engineering team in Hanoi, in Vietnam as part of that business. So that was the genesis of that. Then Fogerty and Marcus Callan, who are the Founders of Holoscribe. They'd had a team out there for probably about four or five years. So, it was sort of just built on that presence that we acquired through the acquisition. It's been fantastic by the talent. There's amazing. The culture is great and there is not that many Western companies up there, probably shouldn't let all the secrets out. 

[00:03:31] Sean: It's fair. We were talking about Nicaragua actually that said, if anyone wants to development teams should go to Nicaragua. That's where it's at. So, look, and I know I've probably completely undersold the platform's capability, you don't go public in two years with us and technology. That's got some real potential impact. Can you unpack a bit about what the sort of platform helps people do? Like who's the sort of perfect client, what are the typical use cases? And particularly also in the extended reality space just to give us a bit of a description of extended versus virtual versus augmented. Like, help people understand what that actually means? 

[00:04:02] Matt: Yeah, absolutely. So maybe I'll just give you a bit of background around the problem space that we operate in and that'll set the context for the actual platform. So, the current, the core sort of root cause of the problem we solve for was actually a privacy. And you know, if you're familiar with digital marketing and the internet, you may have seen all this stuff around about third-party cookies and third party cookies are going away. All of the major vendors like Apple, Microsoft, Google, all, either remove them or everyone has except Google actually, Google's removing them next year. So, that sounds like just a technical thing, but it's actually a fundamental change in how the internet works. I reckon it's probably the biggest fundamental shift to the internet since probably the 90s, to be honest. So, because those cookies, they're really simple technology, they’re just a little text file that sits on your computer and your browser controls them and it allows websites and internet companies to track what you do on the internet. So, with this increased sort of awareness from consumers around privacy, and I guess an increasing level of distrust around how their information is being used online. And then you see that match with the regulators all over the world. You know, Europe has led that with GDPR, Australia has got their own privacy principles, the California privacy act. There's lots of legislation happening all over the world around this. So, that was really the catalyst for these internet companies to start to make this shift away from this tracking technology. And just to give you a really basic example of what it has enabled, If you've ever been on Facebook and seen an ad for a pair of shoes and clicked on that ad and then those pair of shoes following around the internet for the next six weeks, whether or not you bought them or not, that's sort of its third party cookies has enabled that to happen. And with that going away, it's had a massive impact on the business models of these big internet companies. You know, like Facebook said in their recent earnings call, it's cost them $10 billion in revenue, just from Apple making these changes.

[00:05:54] Sean: Wow. 

[00:05:55] Matt: Google is making these changes 2023. They haven't given it a specific date yet, but Google Chrome is the number one web browser in the world. So, once Google removes that functionality, the impact's going to be immense. So, it's going to cost these companies tens and hundreds of billions of dollars. But also it's an issue for advertisers … 

[00:06:17] Sean: Issue for the advertiser. Yeah, no retargeting. 

[00:06:19] Matt: That's right. No retargeting on the internet and a real reduced ability to actually get really granular with your targeting as well. Because a lot of that data that Facebook was tracking and packaging up and selling to advertisers doesn't exist anymore. So that's sort of the root cause of how we've approached the problem that we solve. And our Wondaris customer data platform. What it does is it enables organisations to use what's called first party data. So, that's data that a company owns about it to customers and consumers, and that can be generated from lots and lots of different sources of information. It might be from their CRM. Could it be from their e-commerce store. It could be from their point of style. If they're a retailer loyalty, there's lots of different sources of this data. So, this is data that a company owns and it's probably the biggest latent asset that we see in any organisation. It's really underutilised data. So typically, we'll see clients of ours, they'll have sort of six to eight primary sources of this first party data, but they can have up to 200 sources and it's all siloed throughout the organisation. It's not connected. You know, what I see about you, Sean, in one system might be different to what I see about you and another system. So, our Wondaris platform enables companies to bring all that data together and centralise it in one place in the cloud. And then it runs this process called enrichment, which is essentially stitching together, all those different versions of you from those different systems to create a single view of the customer, a single view of you as a customer. And once that's in place that enables the machine, learning the AI to do what it does best, which is crunch these massive amounts of data and predict behaviour. So, it might be things like you might have a propensity to purchase a certain product. You might be exhibiting behaviour that might lead to you have a high propensity to Chan for example. So, there's all these predicted insights of the system in generate once all that data is in place. So, with that…

[00:08:11] Sean: So, as an example of that, I've purchased something and I keep going back to the cancellation page or something on the website and it's going; hey, this guy keeps coming on the cancellation page, like he's probably in the, there's a risk indicator going on there maybe this guy is likely to turn that kind of, as that’s really basic example.

[00:08:28] Matt: Absolutely. Yeah. To give you a working example that we work with one of the biggest superannuation funds in the country. So, one of the things they really can understanding is member churn. So, members that want to churn that money out of their super fund to another fund. So, there's a whole heap of like data signals that can sort of predict that might be happening. It could be the sort of content and the pages they're going to on the website to research how to move your super money around. It could be their contributions of stock. There's lots of different data signals that you can bring into this and then the machine learnings is okay, well, this, for example, in the super example, this member might have a high propensity to churn, so before they churn, you might want to do some really targeted communications to that member to prevent them from churning, for example. So, you know, that's a use case that people would use their platform for, so once all that data is in place, and this is where we come full circle back to the Facebooks and the Googles of the world that are losing a lot of money from this, is the data that our system has, can be synchronised up in a really privacy compliant and anonymised way back into Facebook and Google and LinkedIn and all these internet advertising platforms. And that enables the company to run very targeted advertising against those groups of customers, we call them audiences. So, those audiences, or they can use that to push back into content channels, so they might want to run tailored, personalised sort of messaging through content on their website or email or whatever the different content channels are as well. So that's the core sort of simplified version of what Wondaris does, there is a lot of technical stuff that sits under the hood. And then where the Holoscribe platform comes in. That's I guess, a sort of bet we've made on the future. We acquired that business back in March, 2020, just as the first COVID lockdowns actually happened. So that was a very interesting time to acquire a business. That team was based up in London, and then they had that engineering team in Hanoi, in Vietnam. So unfortunately, never got to go to London when we acquired the business because we were locked down in COVID. I finally went few weeks ago. So, two years in the making that trip, but sort of my view on this and our view on Expon as well is, Mark Zuckerberg has sort of turned this kind of Metaverse and sort of made it popular, you know, six months ago or whatever. But our view was that is definitely going to be the next way that consumers interact with brands through digital channels is in a much more rich and immersive way. So, if we have a platform that enables brands to build content and publish experiences and a really simple. And then can power that with all of that data that I just spoke through, that personalised data, we feel we've got a really compelling solution for customers where we can help them with their data and help them optimise their data, and then we can help them with a experiences and optimise those experiences and content as well, and really powering with machine learning and AI. So that's still fairly nascent. Like there's still a lot of hype around the metaverse and that whole area as well. What we sort of see is customers are using it as kind of as a bridge to the metaverse and what I mean by that is it's about learning. So, it's about testing stuff, getting data, seeing how customers interact in these different environments and these immersive environments, and then really using that, learning to inform their strategy as the metaverse. So, it becomes more and more mainstream, which I think the barrier to that is the hard way. You mentioned a few things around augmented and extended and virtual and all these different realities. You know, I think our view is it will be a blended reality. And when the hardware looks like these reading glasses that I'm wearing on my head, and you don't have to look like you're in Star Trek, like some of those original virtual glasses did, it'll be much more mainstream. And that's where I think the power of that sort of technology where you can put a digital overly over the physical world where you can actually immerse yourself in a fully virtual world and then link that back to a physical experience in some way. And that might be a shopping experience in a store, for example, you can try on clothes and with your VR headset on, and then if you actually want to go into the store and try them on in real life and buy those through a physical channel, that blended experience and that blended commerce is certainly where we think things will sort of migrate to in the next sort of three to five years.

[00:12:48] Sean: Yeah. For those who haven't spent any time kind of looking at the Metaverse or considering it yet, you will have, if you want to go back, you can listen to a podcast I just did with Barry O’Reilly from the Unlearned Podcast. And we have a much deeper conversation about the Metaverse and NFTs and blockchain and the whole sort of Web3 space. So, worth going and having listen to, but if you think, you know, I like you am a big believer that this is a material shift that's coming. And particularly, I'm typically bringing an education lens to it because I spend so much time that industry, but I that's absolutely where I see the future of blended education experiences, because it perfectly brings together the social cohesion and the social learning experiences that they were looking for with the interactivity that comes with it. But also, then the ability to have asynchronous offline, you know, study when you want to, learn the boring stuff by video that we're already doing today. But actually, what's often missing at the moment where we're doing virtual, you know, sort of instructor led learning, it's still very, you know, it's instructor to students, students back to instructor. It's very difficult to get a quality conversation that feels like a conversation between students, even if you break them off into a zoom room, it's not the same, you're missing all of those side conversations, the ability to sort of choose who you interact with all of those small cues, but that actually really matter in a social experience, that's really interesting that you guys are taking an early bet on that, that's really exciting. And what will the new partnership you've done with Google a month ago, mean for your customers? 

[00:14:16] Matt: Yeah. So, we announced, I think it was about three or four weeks ago what's called a CMU partnership, which stands for Customer Match Up load. And like I sort of spoke through around those use cases of taking that first party data in a really privacy compliant way and having that to synchronise into the platform, so that's what that partnership with Google does, is a very short list of vendors globally that have sort of met the stringent security criteria. And what that means is, if you're a Google ads customer say by Google ad words for search or you're buying ads on YouTube or whatever, the Google ad products are, our platform natively integrates into that now. So, you can go into actual Google ads interface, and you can select Wondaris as your integration source. And then if you've got data, now Wondaris platform, you can sync that into Google for your retargeting and your exclusion lists and all the different advertising use cases. So, yeah, we're really excited about that, it's only quite new, and so there's a lot of work we're doing now, starting to build the awareness around that and working really closely with Google around how we start to scale that up because it does two things. It helps your ads become more effective. And the other thing it does is it provides data signals to the Google platform. So, their machine learning can learn faster because in this modern digital marketing world, there's just too many variables and for a human to be able to guess and optimise all those variables, it's just too hard. So, enabling the machines to do all that heavy lifting and predict which customers and how much you should pay for the ads and those kinds of things, that's the most efficient way of doing it. And so that, that partnership that we've done provide signals to the algorithm. So, the algorithms can learn faster and they can actually predict and deliver outcomes better for advertisers as well. So, it's a great win-win for Google, us and the advertisers.

[00:16:43] Matt: Yeah, it's a good question. So, I think maybe just wind back a little bit, 2008, I'd established a digital marketing agency. That was a agency called Trafficker. It's probably one of the biggest independent agencies in the country back in the day. So, we helped a lot of customers with their Google ads and Facebook ads, those kind of things. They’re are very, very hard business to scale. They're low margin. It's just very competitive. And in 2014, we set up an analytics practice inside that agency, really to help our customers use all this data that was being generated through their advertising and all those customer databases that I mentioned before as well. And they have very different dynamics. It was very sticky. It was high margin. It was recurring revenue, and so fast forward to 2018, we made the decision to spin out that analytics practice out of the agency and then go about winding down the digital marketing agency. And that was the genesis of Xpon. So, 2018, we did that. 2019, we incorporated Xpon, and then we did that acquisition over in the UK for Holoscribe in 2020. And that was really bringing together the moving parts that we had, to then enable us to build the business that we've got today. I guess, I've always worked for myself most of my career. I've done little stints working for other companies, but always liked the autonomy of being an entrepreneur and making my choice, answering to myself, although we all have a boss and my wife might think otherwise, but yeah, no, the autonomy is really important to me as an entrepreneur. And so we looked at all these different options. We looked at venture capital, private equity, and we decided probably the best route, was for us to actually do an early-stage IPO. I think when we made that decision, obviously the dynamics in the market were very different to what they are today, even in the last few months. So, that was really the reason why we said, well, we'll do an early-stage IPO rather than raise PE or venture capital just to go out to have more autonomy. That's worked really well for us, and that was the right strategy for us because we brought businesses together into Xpon as well. And the founders are still involved, having that real Founder led entrepreneurial kind of spirits, super important between us as a sort of senior exec founding team. I think, we have 53% of the company still, so between us, we're still majority shareholders. So, we still do very much have the ability to make the choices that we need to make, obviously, within the constraints of being a public company. So, we raised about five and a half million in, I guess you'd call it seed pre-IPO money. That was done primarily through high net worth. So, sophisticated investors. And then just before the IPO. So, we IPO in December, 2021, and we did a pre-IPO rise sort of July-August that year. And that sort of brought the first two institutional investors into our share registry. So there was a investment fund called micro-equities. They invested in another fund called Alto Capital, and they invested in that pre-IPO. So, that was five and a half million all up. And then when we listed in December, we raised another 12 and a half million through the IPI. So, you know, timing wise. Fantastic. We got it away before everyone thought tech stocks were the antichrist. So, we've got plenty of capital in the bank, so we can go and execute on a strategy and we don't have to be short term in our thinking, which is really, really good. And yeah, we’re growing the business super-fast at the moment and we're very lucky because the underlying unit economics of the business. So, they're the economics of what a customer cost to acquire or what they call the CAC - Customer Acquisition Cost. And then at top, what that customer's worth to us is their lifetime value. They've very, very strong unit economics like world-class. So, that means that at a customer level, we've got very strong customer profitable. And we can afford to invest in continuing to grow, obviously in the current environment, everyone wants to know when you're going to be profitable, and when you’re going to start paying dividends and spitting out cash. We've got a line of sight on that. We're not announcing that to the market as far as forecast at this stage, but the business model has been proven for the last few years. And as we scale, it just gets better actually, which is fantastic.

[00:21:00] Sean: Does being public also mean that you, I guess it sort of brings a few different flavours, doesn't it? And I'm really interested in what you've been, what you've enjoyed and what you've been challenged by and what you've had to become a public company CEO versus a private company one. But is one of the benefits, correct me if I'm wrong, do you, therefore you might spend more time with investors on sort of investor relations, but do you spend less time having to think about how am I going to get to the next round and who are we going to rise from?  Which I imagine is a fast-growing tech business, it takes up a hell of a lot of time of the CEO's thoughts. Is that a reality? Is that a benefit?

[00:21:33] Matt: Oh, yeah, absolutely. There’s was always constant communication. I would say probably 50% of my time is spent in that investor relations and market facing sort of conversations. A lot of it's around education because we know what we do is quite technical, what I've learned as I've spoken to a lot of investors and analysts is, their perception of marketing is madmen. You do long lunches. You know, you go to parties, you flop around. As I sort of explained to them like how technical it is and like how it's so important and so complex that you're using data to drive it all, they go on. And most of them say, I never realized marketing was that complicated. So, a large part of my job is actually educating the market around what modern marketing is and how complicated it is these days. So, then they understand the investment opportunity of investing in a technology company like Xpon that's powering that next generation of marketing and customers. 

[00:22:29] Sean: Yep. Got it. 

[00:22:29] Matt: So, that's where a lot of the time goes. And yeah, look, obviously when the markets are good, you can go back and raise capital and you know, it's not tremendously hard when the markets are tough, right? Like they are right now. I'd hate to be out there trying to raise money. I think you'd be getting touched up pretty badly. But like I said, we're in a good position. We've got plenty of cash in the bank and we don't need to raise cash. So, we're just focused on execution and scaling.

[00:22:54] Sean: And what have you had to learn? What have you enjoyed? What have you been challenged by and what have you had to learn to be an effective public company CEO versus the private stuff you've done before? 

[00:23:03] Matt: Yeah, the governance stuff. Like doing an IPO is not something I want to do twice in my career. It's something I'm glad I've done, so I can tick it off. And so, I've learned a lot and did the process, but there's a lot of compliance and legals and governance stuff, which, you know, when you're a Founder and you love customers, you love products, you love selling, spending a lot of time talking to lawyers about what you can and can't say, and it's painful, but you know, that's done. That's a one-off project when your list. Coming out of the back of that, once we've been listed, I think probably the stuff that I've had to adjust the most too is, you know, I've got a board, I've got a governance board, I've got two non-executive directors. Fantastic mentors for me, both got a lot of experience in public companies and technology companies as well. So, they bring that governance layer to the business. And as a Founder, when you're used to running fast all the time, you do have to learn to slow down a little bit, to make sure that you've discussed things thoroughly with your board. And you've understood all the risks and all the governance requirements before you make some of the big decisions. So, that's probably something I wouldn’t say I don't like, but it's something I'm not used to because I've always had the autonomy just to run fast. I'm not going to say I love it either because it's probably one of the least favourite things to do with my time is talking about these topics. What I've learned the most is the learning. You know, learning so much about how public markets work, how sensitive they are to sentiment, how important it is that you choose your words very wisely, because you can shift sentiment unintentionally by using the wrong words when you're describing the business. So, that's been really good for me. And I look at it a little bit like enterprise sales, because you know, when you're selling a product to a customer, you're really trying to understand what the needs are of that customer. And I look at investors the same way, you know, what's their investment thesis, what's their funds remit, how do we position our stock as a product that fits into their requirements that they can constantly invest for the long-term. And I think that we've been very lucky with the lead manager for our IPO was a company called Sequoia Corporate Finance. They did a fantastic job in building our share registry as well.
So, a lot of the needs of all of the institutional funds that invested are all long investors. So, they're investing for the long-term, they’re not short-term trading, and none of them themselves stock since we've listed in with all the current market upheaval. So, that's good because we've got long-term investors that are backing on the future, they're not backing on the short-term quarter to quarter. 

[00:25:32] Sean: That's really helpful. And I've seen that takes a little bit of the pressure off a kind of a whole bunch of people jumping up and down and looking for dividends in the short term, when you've long-term. What about, you know, you're attracting the attention of both retail and institutionals, but you know, when you're going through that process, of course, people want to look at a company and go, well, they've obviously got a real top talent. Obviously, looking at you as a real, it was an incredibly key part of that, but also looking at the rest of your team. How did you approach finding your key people and you know, how much of that was sort of pre-IPO versus, okay, now we've got money from the IPO and now we're building a stronger executive team. Like how did that play out? 

[00:26:12] Matt: Yeah, I'm so all of our executive team work, pre-IPO, some of them, their last appointment was our CMO, Jennifer, she started, I think October 2021. So a couple of months just before the IPO. But yeah, I think what we focused on there was obviously the skill sets that we needed that was first and foremost. But as far as attracting them, it was really about culture, like cultural alignment. We're very values driven. We’ve spent a lot of time over the last 10 years from even that predecessor business to Expon really focused on building culture and values that mean something to people. And so when we were able to talk really passionately about that and authentically as well about our values and our purpose and really trying to align what our people do in our business to not just how to help the business grow, but how to help them grow as individuals either personally or through personal development or in their career and how they sort of develop the technical skills or the soft skills or whatever the remits are within the business. So having that real purpose through culture has really been very powerful for us because we've attracted the right people. And they've had plenty of options, like it's a pretty tough job market out that when you were creating at the moment. So, you know, what we're finding is, there's certain talent that will go for the money and that's fine. That's where they are. And there's no, no dramas with that. And there's other talent that money is important. Don't get me wrong. But I also want to have purpose and want to work with the business that’s just more than making money, which Xpon is much more than just making money. 

[00:27:43] Sean: And it seems like, I mean, that's certainly been a big trend over the last three years, more and more, you know, people who've got choices and especially top talents, I've got a lot of choice. And so if you don't have something to bring to the table more than money, then even if they just come from money, you kind of always makes me a little bit nervous because you kind of going, well, how long are they really going to be here for until I get the next best offer, basically. We’re definitely just attracted by money, sometimes are harder to retain and get contribution from. So, what have been some of the key when, you know, when you think back on what has I guess changed the dial on growth in this business, you've obviously grown very quickly, very fast. From your perspective, what are some of the key ingredients decisions that you've made, investments that you've made, strategies you put in place that have really unlocked the capacity for you to scale?

[00:28:31] Matt: Yeah. So, I think there's a few different elements to that. Getting your solution market-fit right is super important before we drop the hammer on scale. And I think as an entrepreneur, you kind of sometimes have your happy glasses on, and you're like, this is working on a really scale this, but you haven't been as rigorous as it should have about the data. So back in the early days, it was certainly, I'm not going to say false starts, but we certainly ran fast, and actually that's not quite right. Let's just back off a little bit, tweak the model a little bit, now try and run again. So, and I think that's great because you fail forward, you learn quick, you iterate, you adapt and then you try again. So, that's certainly been the process for us. We haven't certainly got it right a hundred percent of the time first go. I don't think we've ever got it right in first go, there's plenty of learnings and plenty of data that says maybe you should have done this differently. So I think having that sort of a mindset in the business that fail fast, fail forward, there's no mistake. You know, you're not going to fail if you learn something, that's really important and creating that psychological safety within the team that it's okay to fail as long as you've learned something. And then we use that learning to move forward. That's really important.

[00:29:45] Sean: That word, psychological safety. I mean, that term has really emerged, I mean, sort of the last few years, but I guess, you know, from your perspective, that’s in the absence of people feeling safe to take risks, you're going to end up in a business. That's succession only top-down driven a few people are making all the decisions. There's no energy or innovation coming from the rest of the team. No one is kind of seeing the problem come up with a solution because they're all scared of getting hammered or being shamed or told they're wrong, is that is the way that you sort of say psychological safety in the culture that you built? 

[00:30:16] Matt: Yeah, absolutely. And I think one of the symptoms of it is blame. Because I think if you're in an environment where you don't feel psychologically safe and you can't say what's on your mind, or you can't make mistakes and learn from them, then you start blaming others. You start blaming everything but yourself. So, like you see that manifest itself very, very quickly instead of…it was one of our core values is, own it. So, you know, you own your outcomes no matter what happens, if you've made a decision, you own it, good or bad. And sometimes for their words, and they're nice words, but actually living that day to day, you see people on a different kind of spectrum of how they respond to that. And as they start to feel safe, then they go, okay, it is okay if I own this, I don't have to try and place blame or shift blame or anything like that. So, I think that's one of the symptoms of it is, is that most definitely.

[00:31:05] Sean: Sorry, Mate, I interrupted, you use unpacking some of the key drivers. I just got excited about psychological safety. So, yeah, back to you.

[00:31:13] Matt: I'm trying to think, where was I? Oh, yeah. Distribution. So, that was the other thing that's supercharged our growth. So, you know, our partnership, particularly with Google is very, very strong. We get about 30 odd percent of our new leads that come directly from the Google sales teams. So, we've worked very closely with the teams at Google. We have the ability to resell Google's technology and bundle it with our own technology as well. So, when we go into the customer together, you know, Google has a customer, they've got a problem to solve. We've got technology, or we've got capability that we can bundle with Google's technology and our technology together to solve those problems. So, that's worked really well for us. And that certainly has given us an unfair advantage as far as getting in the door with lots of companies. Once we're in the door, it's our job to close the deal and grow the customer. And I think that's probably the other thing that's really catalysed our growth is, very, very focused on customer success. So yes, we've got an excellent sales team that's focused on winning and landing customers, but we've probably got a bigger focus on customer success. So, we do NPS or C-SAT every quarter with our customers, I think NPS currently is 86. That's very strong.  

[00:32:28] Sean: And for anyone who hasn't had those terms, that's Net Promoter Score and Customer Satisfaction. 

[00:32:32] Matt: Correct. Yeah. And so that Net Promoter Score that's on a scale of 0 to 100. So, where it sort of towards the top end of that, anything over 80 means your customers are advocates and fans, and they'll refer you to their networks as well. So, we get referrals from customers. But one of the rules we've put in place with our customer success team is, if our customers aren't at least at 80, you cannot sell anything to them. So, we really have a very strict rule around, they need to be satisfied and advocates before you try cross selling and upselling the other things that we offer. And because they are advocates when we do want to cross sell and up. So, it's very much from a solution perspective of where we're close to the business, we understand your needs. Here's a solution for it. The trust is already there. So, it enables us to grow our customers and expand our customers. And that's been really other core catalyst of growth is we just keep growing our customers and we don't churn them. Like our average monthly retention rate is 99.5%, I think was the last quarters retention rates. It's very, very low churn. And the other metric that we look at is a metric called Revenue Retention. So, a 100% revenue retention means the customer stable. They're not growing or shrinking, anything over a 100 means that you're growing those customers. So, our retention, I think was 140% from memory from last quarter.
So, it continuing able to keep growing our customers, but not in a keep flogging them product, but we keep strategically partnering with them to solve problems and where we're sort of embedded in their team. So, they've been really the things for us to really catalyse this fast growth.

[00:34:10] Sean: I love that. And I love the framework and principle you've put behind, not allowing someone to sell something to a customer who is actually not truly at such a level of engagement that, you know that they're getting value and therefore new products and solutions make sense for that customer. That's an excellent, I've never heard anyone think about it that way before. I mean, it's really valuable for people. 

[00:34:29] Matt: Well, you very rarely have to have a conversation on price either, because the trust is there, the value is there. So, it's not a price conversation. So, your margins are strong too.

[00:34:37] Sean: Yeah. That makes a lot of sense. What advice did you receive or, you know, either before this journey with Xpon or during the journey with Xpon that had a real impact on you, advice that kind of stayed in your mind or that you came back to, or sort of, or principles that came back to you, that impacted either way you developed the business all the way you've chosen to lead the business? 

[00:35:03] Matt: I think when it comes to people, I had a mentor. I was a general manager of a company where I had a job back in the early 2000s, so very early in my career. And he said to me, when it comes to recruiting, he said, "If you need to talk yourself into it, talk yourself out of it.” And that stuck with me. And I say that to all of our team when they're hiring as well, is if you're sitting there going, oh yeah, maybe, and you're trying to convince yourself, not the right fit. Talk yourself out of it and move on. Hard in a very tight labour market to be true to that. But you have to, otherwise, you're going to bring people in your business that don't fit your culture, might not have the right skillset, and that's going to impact your customers as well. So that, for me, simple advice, but I stuck with me and I use it every day, still 20 years later. I listened to a podcast and I can't remember the name of CEO. I think he was a CEO of Workday, which is a US-based SAS company. I think it was him. I can't be a 100% sure. And he was saying “The number one skill in this modern era to scale a business is having the ability to scale empathy.” And I think that really stuck with me as well, because it's quite different, right. And when we think about what empathetic leadership means, you know, it's hard work being empathetic leader, because you've always got to be putting yourself in other people's shoes. You always got to be pausing and go; hang on a minute. I'm not going to respond emotionally to this. I need to be empathetic and understand. And then you translate that to a customer and you go; well, how do I develop an empathetic sales team that can always put themselves in the customer's shoes to understand what's going on for the customer? So, I think that was really good advice. And it's something that we're still working on. Like again, they're easy words to say, but manifesting that, bringing that to life, it's constant energy and work. But yeah, that's definitely something that's been very, very impactful on me.

[00:36:53] Sean: I love that. And for those who want to dive a little bit deeper on that topic, I interviewed Stephen, M.R Covey, you know, the son of the famous Stephen Covey wrote Seven Habits of Highly Effective People. And he's really a kind of thought leader on trust and empathy and how you do your point, how you scale organisations through, empathy is what brings trust in the organisation. And that's why you get people to fly around and take risks and bring their best and feel know, feel safe in doing so. You've done a hell of a lot, Matt, in a really short space of time in this business. What's been the most difficult time you've had to face as a CEO, and who did you lean on or how did you get through that? 

[00:37:31] Matt: That's a good question. I think this, like, everything's good after the fact, right? So, you can look back on stuff in hindsight and it doesn't seem anywhere near as bad. I think now we're scaling very, very quickly right from day one, like this has been a rocket ship. And in those early days, we hadn't raised a lot of capital. I think the first amount of capital arrives was maybe 1.1 million from memory. And so there was times there where we go, if we can’t optimise the business model, so that we're generating more free cash flow or we can't raise investment, we're going to be in trouble. Thankfully we did both. That's something we've been very focused on is how do we have a business model that produces cash as we scale and we're investing heavily. So, we're still not quite cashflow positive, but we certainly have got very good cash matrix. And back to the point before around making sure that when you're pitching to investors, you're putting yourself in their shoes and trying to understand what the investment needs they have, that helped us raise capital. But yeah, there was some sleepless nights along the way around, I hope we can pull this off because we're going to run out of money pretty soon. We always had a plan B, but you never want to think about plan B because it's not pleasant. So, I think that was one, I think the biggest challenge I’ve had as the Founder and the CEO is getting the balance right between autonomy for my team, my senior executive team. And like I said, we brought businesses in that have founders, so they're used to being autonomous as well. And that's part of the secret sauce for Xpon is, you've got this Founder led mentality. But trying to get that balance right between giving them too much autonomy and then things happen in silos and they're not consistent, and being able to provide enough sort of structure and influence, I guess, to say, well, these are the things that are non-negotiable as far as how we need to do things at Xpon right now, because you don't get economies of scale if you've got different people in different business units doing different things, and that's simple things. Using different CRMs, for example, because you were buy a business that using one, we've used a different one. And, you know, I think their growing pains for any business that has acquisitions, as well as those systems integration, that people integration piece. But that has been something that I've had to lean on particularly my board, so our chair, Phil Eris, and our non-exec director, Tim Abbey. They've been really, really good at supporting. And just listening. I find that's been really valuable. I think one of the things they do well is they don't tell me what to do, they don't tell me how to suck eggs, they basically just listen to me. Maybe they get bored sometimes because I talk a lot to them, but yeah, they asked me good questions and I think that's really the value that you get when you've got a good board around you is, they know the right questions to ask you so that you figure it out for yourself, particularly if you're a Founder of a business rather than maybe a professional CEO that is used to a bit more corporate structure and a bit more sort of direction. Yeah, so there been some of the challenges is like scaling that integration and scaling the people side of it, and people's hard drives, their emotions at play. So yeah, it's never a straight line.

[00:40:45] Sean: I love that. And you know, it sounds like, because you know, I was going to ask you about how you've been able to retain your personal, I guess to make sure that you been getting what you need out of the journey, because the reality is when you're growing a business that fast and you're the Founder, you're being pulled from pillar to post, you've got family responsibilities.
You're trying to have, find some sort of semblance of balance and how you show up every day impacts absolutely everybody and everything, which is a lot of, you know, there's a lot of pressure and responsibility and the moment you go public, you got even more expectations, more everybody looking to you for more stuff. How have you managed to, what sort of practices do you put in place for yourself as a Founder to make sure you get what you need energetically to make sure you can show up and give what you need to everybody else? 

[00:41:26] Matt: Yeah. It's always a juggling act. I don't think there's such a thing as balanced. It's more like a pendulum, right? It swings back and forth.

[00:41:33] Sean: Yeah. It's not like a static point that you get to, you're like; oh, I've got balance. Right? Like I'm there.

[00:41:38] Matt: It's not … So yeah, I know. Look, I'm very, very, very lucky because we live in a beautiful part of the world. We live out in the Hinterland on the sunshine coast. So, we've got acreage, we've got animals. My daughter's brought into horse riding. So, yeah, that gives me a very different dynamic to this crazy digital world that I live in from my work persona into this relaxed sort of open spaces, open air environment. I come up with my best ideas when I'm out with nature. Like I very rarely considered a computer and come up with good ideas. If I'm out in the paddocks, walking around with the animals, all my ideas come to me out there. So, I connect with nature. So, that's been really good for me. I think that's actually, that's probably been the number one ingredient that's kept me saying to be honest. And I think with COVID and with the lockdowns and having to work from home, again, I was really blessed because I was working from this beautiful place. And before I was ever really struggling with something, I just get up and walk outside, that's been good. Yeah, exactly. Yeah. I've got the support of my wife. She's fantastic. We've been married for 25 years now. So, she's been on this journey with me that whole time in different ways. So, she understands me, manages to call my bullshit when it needs to be called, and supports me really well as well. So, I think we've got a good partnership there. So that really helps me as well. And then I think just having the right mindsets and I think there's a few mindsets that I’ve learnt over the years to really focus on. So, a gratitude mindset, part of our stand-ups is the first thing a team had to say in their stand-ups is one thing they're grateful for. So again, it just keeps reinforcing gratitude in the business as we scale, and you get that economies of mindset scale, and abundance mindset. There's a network called Abundance 360 Peter Diamandis. I've been involved in that for about five years. That's been really influential in the way that I think and create this abundance mindset and look at the world as glass half full, rather than glass half empty. So, they're probably the two sort of mindset things that have helped me a lot as well.

[00:43:42] Sean: I love that you brought that into to a business because quite often people find it quite difficult. It's like; well, how much of this is about me and my, you know what I like personally, versus what's going to make sense for the company. But I think, you know, when people are on the other side of that and all of a sudden. I've got a practice that's personal, that's showing up in their workplace, that whole of life integration, that's what everybody wants at the moment. They don't want to have this completely separate lives, where that creates quite a lot of stress and tension for people. The more they can feel like they're just as a whole cells are sort of almost moving in and out of work. It's not a, you know, it doesn't have this big black and white. Okay. Now I'm at work and have to be totally different stigma shirt on today, usually wearing a polo shirt. 

[00:44:24] Matt: Yeah. 

[00:44:24] Sean: But only because I was cold, I'd feel like I had to dress up. Yeah, that's beautiful. Thank you for sharing that. 

[00:44:32] Matt: Yeah. The other thing it does is it gives you an insight into the whole person. I think that you... Because you have people when they come in and they'll talk about it and they might talk about; I’m grateful for this team member, they helped me out with this thing. Or they'll go, I'm grateful for my spouse because they did this. I'm grateful my kids and my parents or whatever. So, you start to understand your teammates as a whole person. And that really helps people bond together, which I find a snitch is really valuable.

[00:44:57] Sean: Yeah. I love that practice. And then some that's beautiful that you brought that in. We don't have heaps of time left, but I'd love to know a bit about, where do you see the business in three years? Like, take us out in the future. What's the business going to look like, what do you think? 

[00:45:11] Matt: Yeah, so I've got to be a little bit careful around what I can, and cant say. 

[00:45:14] Sean: Yes, of course. 

[00:45:14] Matt: … forecasting perspective, but certainly from where the technology's going, like I said, if we go back to the start, our bet on the next version is the Metaverse will be a thing. And there's Web3 technologies that underpin that obviously Blockchain and NFTs and other parts of it. But I think, we're going to live in a world where data is becoming more and more valuable. I have a hypothesis, we might be able to prove it pretty soon. That data is going to be more valuable in recession than not in a recession. And I think as we go into tougher times, organisations are going to need to rely on their data to make more informed decisions quicker. So, the value of that data, um, will increase as the economy potentially goes into a recession. So, that as companies rely on their data more and more, I feel we're really well positioned to help them do that and obviously help us scale as well. And then as this next version of the hardware for the Metaverse comes out with the headsets and things like that, we think that that's going to be really the next version of where Xpon lands is a data driven experience company for Web3. I think that's probably the most succinct way to explain it.

[00:46:22] Sean: That's awesome. Well, I certainly look forward to watching that evolve, because such a super interesting experience. I'm so glad that you're on the front end of that and really applying wealth that’s nice and building your capability there. I ask every Founder, this question and this it's called Above All Else. So, I want you to now, okay, we've gone out three years. I want you to go much further out and go out to, you know, the later stages of your business career. Maybe you're getting a bit more towards your sort of yearning years, for want of a better word. You know, you've achieved the stuff that you've wanted business wise, you've tackled the business problems. You've built the businesses that you wanted to, and you started to slow down a little bit and you've got the CEO of the world's largest global community, all first time Founders, you know, tens of millions of an old sort of hungry to learn from Founders like yourself, who succeeded in scaling. And she gives you a once in a lifetime opportunity to share your three above all else's, which is to finish the sentence, you know, three things that you must get right as a Founder if you want to scale are what? Like above all else, these are the three things you've got to now, what are they for you? 

[00:47:24] Matt: Well, I've hit on one empathy, and connecting to your people. I think if you don't have that, you're not going to be successful in this modern world. I think people, people, people, right? The ability to understand people, to motivate people, to empower people, to bring the best ideas out of people and to enable them to move really quickly. I think that's certainly going to have to be key moving forward. And I think curiosity, like leaning into curiosity. One of our core values is lead with curiosity. And so being able to lean into that curiosity and just go well, just because that's how it's always been done. Is there a better way?  I wonder how that works, I wonder why that does, so just having that curiosity. You look at kids like toddlers and it just, why, why, why. So, having that toddler mindset almost around continually asking, but why, but why? I think they're the things that are going to make people successful. Obviously, networks, connections, capital, technology, they're all table stakes. Right? But what's going to differentiate the good from the great, I think are those sort of softer things. Well, that's my opinion.

[00:48:30] Sean: That's beautiful. And I think it's a really great almost challenge for our audience for you to step back and think about, you know, in the last week, how much time have you spent on consciously thinking about how you're building your culture, how you're engaging your people, how you're creating empathy in that environment? I don't mean just spending time on people's stuff because that can be just quite transactional, but actually, are you really consciously thinking about how to create that environment for your teams. You know, sometimes we don't spend enough time doing that. And as you said, that's the differentiator in a modern world. You want to attract great talent. You aren't going to do it by just having the best widget, that's just, people aren't interested enough anymore and they're not all that grateful for the job because they got options. 

[00:49:08] Matt: Yeah. Well, there's plenty of smart people and there's plenty of great tech out there. Right? So, that's not a differentiator either of those things. 

[00:49:15] Sean: No, especially as we go global. Right? So, it's a big old talent pool out there. Well, Matt, that's all we got time for today. Thank you so much for everything you shared today. It was really, you know, there's a lot of humanity in this conversation. I really enjoyed that the warmth that came through in the way that you obviously lead the business. And I really applaud what you've done so far, and can't wait to see where you get to over the next several years, I'll be watching closely. How should people, if they want to learn more about Xpon, how should they sort of follow along or get involved?

[00:49:41] Matt: Yeah, thanks. So, Xpon.ai. We're on LinkedIn and Twitter as well. And yeah, feel free to connect with me on LinkedIn, I’m just Matt Forman, all one word on LinkedIn. So yeah, they’re probably the best places. 

[00:49:56] Sean: Beautiful. Thank you so much, Matt. Well, folks, before you go, I hope you really enjoyed the show today. Please feel free to jump on the Apple Podcast, leave us a review. It really helps it get into the hands of other people. I would be super grateful if you did that. If you prefer the socialis, you can find any of the podcasts on the socials @ScaleUpsPodcast, on any of your favourite ones. And you've been listening to ScaleUps podcast. I'm Sean Steele and look forward to speaking again next week. Thank you so much, Matt.

About Sean Steele

Sean has led several education businesses through various growth stages including 0-3m, 1-6m, 3-50m and 80m-120m.  He's evaluated over 200 M&A deals and integrated or started 7 brands within larger structures since 2012. Sean's experience in building the foundations of organisations to enable scale uniquely positions him to host the ScaleUps podcast.

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