Episode 1: David Koch From Pinstripe Media

Published October 02, 2020 Views: 19

In Episode #1 of ‘Walk and Talk’ Ed goes for a stroll with David Koch.

Alongside his role as host of Sunrise, David is one of Australia’s leading business and finance commentators. A small business owner for 30 years, David has a passion for the sector and is currently Executive Chairman of his own start-up business – Pinstripe Media.

Listen on Apple Podcast.

Transcript

  • Episode 1: David Koch From Pinstripe Media

    My name’s Ed Mallett. I’m the founder and managing director of Employsure, a business that helps other small businesses with their workplace relations advice. I’m fascinated in how businesses deal with growth, how business owners manage their day-to-day existence. And for that reason, I’m walking and talking with business owners to discuss with them why they got into business and how they go about it. Today, we’re talking with David Koch. It was a pleasure and a privilege to have the chance to catch up with Kochie, going for a walk around his neighborhood here in Sydney. Hi, David.

    David: Ed, how are you, sir?

    Ed: I’m good, thank you. Thanks very much for joining me today.

    David: It’s my pleasure.

    Ed: It’s our first ever one of these. And we were…

    David: Right.

    Ed: …we’re setting up this thing that we call the “walk and talk,” hence we’re walking and talking.

    David: Yeah.

    Ed: See what we’ve done there?

    David: At the same time.

    Ed: Yeah, amazing. But the idea is that we, as an organization that deals with a lot of small businesses, want to talk to small businesses, particularly our clients, and have a chat with them about their roles, how they got into small business, the highs and lows of that. And what we noticed, what I noticed at least as a small business owner as well, is that a lot of us are spending time going and clearing our heads with a walk. So, is that something you do then?

    David: I do exactly the same thing. My wife is in the business as well, so I have rule… Because I get to work at 3:30 in the morning. I have a rule now I’m home by 4:30, quarter to 5:00, and then the two of us go for a walk, and I bring her up to date with what’s happened in the business during the day. Because I always believe it’s her house on the line as well as mine, and she’s got to be involved in the business. And when she sees us struggling and I go, “Well, I don’t have any extra cash this month,” it’s not a surprise to her because she knows we have a got a client that hasn’t paid on time or whatever, so she’s fully briefed. I think that’s important.

    Ed: So it gives you a really good way of communicating as much as anything and staying transparent on what’s going on.

    David: And old buggers like us get fit.

    Ed: Absolutely. So it’s quite…in terms of that communication, I read once that…I think it was Gail Kelly, she used to metaphorically when she got home put her bag down outside just to not take it inside. It sounds like you take the opposite approach and then you collaborate with your wife around with these questions.

    David: And we do it all on the walk and then get home, no talk about business.

    Ed: Then you stop?

    David: Don’t wanna talk about it.

    Ed: So the kids don’t hear about it?

    David: Yeah, yeah. And I think for a lot of small business owners, particularly with the younger kids that I know, it was in my case when I first started it, we’d share too much with the kids and they’d be, “Oh, dad has a business going.” And you go, “You shouldn’t have to worry about that,” and they were picking it up over the dining table. And so, yeah, we have a rule, don’t talk about it.

    Ed: So we get told a lot that we as leaders, you’re meant to wear some sort of mask certainly around the workplace so the people don’t take on board your stress, but I think we’re probably a little bit guilty of dropping our guard a bit when we get home being who we are really.

    David: And, in fact, I think, because running your own business, you gotta be positive, you gotta drive the culture, and the innovation, and that is all about being positive, and not show your frustrations, you know, “God, I’ve been someone’s counselor again today. They don’t care what I’ve been going through, but I’ve gotta care what they’ve been going through in their personal life. And then you get home and you almost take it out on the people you love, all those pent up frustrations. So a good walk gets it over and done with.

    Ed: That’s good. Well, I’m pleased you subscribed to it. So it will make this a bit of exercise really useful one hopefully. But, so one of the things that I wanted to talk to you about today is, well, the main thing is your business journey. So I think we all know you as a media personality, but what I’m really interested in is you as a business owner. It’s a journey that started a long time ago for you, isn’t it?

    David: Yeah, I was.

    Ed: Not being disrespectful now, again, a while ago.

    David: No, no, I know. I’m an old bugger. It’s really important that….yeah, it did start a long time ago. I was studying accountancy and got asked to go and work on “The Australian” newspaper as a journalist. And I thought…

    Ed: Was that down in Adelaide?

    David: No, it was here in Sydney, and…

    Ed: You grew up down there, though?

    David: Grew up in Adelaide, and dad got transferred over here when we were younger. And so I went and worked for “The Australian” newspaper and then “BRW.” And at “BRW,” I launched a new business for Fairfax, so the owners of “BRW” for Australia’s first personal investment magazine. This was way back when Paul Keating was treasurer and floated the dollar, deregulated financial markets, and all of a sudden, average Australians had investments they could put their money in.

    So I started this magazine, it was really successful. I started it in New Zealand and in the UK as well, “Money” magazine, over there. That sort of gave me a bit of a taste of creating something, creating an organization. And when I was in the UK, I fell in love with a professional financial magazine over there and decided to start it up back here in Australia when we came back, and Fairfax was my joint venture partner.

    Ed: Right.

    David: Yeah. So that’s where it all started.

    Ed: So in the Fairfax connection, so that’s impressive to have them as a joint venture partner, huge business, but daunting as well.

    David: They went into administration. Two years later, I bought them out for a dollar, but, yeah, that’s all part of the journey of making your own business.

    Ed: So at the accountancy point though, so you did your training…which some people would say that accountants, and I have to say this as an ex-lawyer myself, lawyers and accountants aren’t necessarily good business people. So what led you so quickly into business and wanting to do that rather than the work in journalism? So for what was the business…?

    David: Well, see, I was an auditor, and I figured…no disrespect to auditors, but I figured it wasn’t in my personality to know what I would be doing on that day next year because it was very process-driven. My dad was a good businessperson. He was an international coal trader, and sort of he gave me that entrepreneurial bug, I think.

    Ed: So you certainly had that sense at home, did you, that business was something that you wanted to be involved in?

    David: I grew up in a business family that we’d talk about it, and he was my mentor. When he retired, he came and ran the finances for my family business, so I was really lucky. He was my hero in life, so I’m very fortunate to have him as a role model.

    Ed: It’s interesting that role modeling is in there just to know about the world of business and how you were picking all of that up growing up.

    David: Yeah. It sort of almost [inaudible 00:07:27.874] but also, it gives you the confidence to take a risk. He always had this great saying, “Have enough confidence in yourself to give anything a go, but if it doesn’t work out, have enough confidence in yourself to go and do something else.” In other words, don’t be scared of an opportunity, but also don’t get caught in a job or a business you don’t like. Have enough confidence in yourself to say, “Not for me. I’m gonna go somewhere else.”

    Ed: And how good have you been at listening to that advice? Have you ever turned your back on things that were not going so well, or do you find yourself hanging on too long?

    David: Probably my biggest fault is I’m a very optimistic person, glass half-full rather than half-empty, so I made a counterbalance to that. So, often, I will hang on to things too long or confronting decisions, say, with staff. I’ll keep putting it off, “Oh, they’ll turn around, they’ll get better,” da, da, da. And then when you finally make the decision, you go, “Why didn’t I make that decision six months ago?” But that’s the personality, I think, of a business owner as well that you wanna back yourself, you’re type A personality. Otherwise, you’ll go and work for somebody else for a whole lot less risk, and you want things to succeed.

    Ed: So you’re just saying about your employees, and I had this great litmus test I read somewhere. It said that if someone comes in and resigns and you don’t regret it, you already should’ve dealt with it. So I know it’s quite…

    David: That is a good litmus test.

    Ed: Quite useful as a reminder that… Now, that’s certainly a challenge, sort of not expressing your own fears and problems but also being receptive to others and leading as well, so…

    David: Absolutely. You can’t share everything. And I think as a parent and as an employer, you can’t share everything. You can’t deflect your stresses and anxiety onto too many others, I don’t think. Otherwise, that upsets the dynamic of the organization.

    Ed: So those concepts of leadership, how have you learned them?

    David: A lot by trial and error, a lot by advice. I’ve always tried to have mentors that I can talk to. I’ve been really lucky, as I said, my father was a really big influence on my business life as well as my personal life. Some other chief executives that I’ve come across through kids at school and things like that I go for advice.

    Ed: Any in particular that you…?

    David: Jeff Morgan was a…

    Ed: Morgan & Banks?

    David: Yeah, Morgan & Banks was really kind in the amount of time that he spent with me and helping the business. Even though it’s a family business, [inaudible 00:10:49.985] that’s been sort of going 30 years, we always have a monthly board meeting. My wife, Lib, must come to every board meeting. We had board papers.

    Ed: Every month you do that?

    David: Every month.

    Ed: That’s a great discipline.

    David: And we always have an outside director in that board meeting, and that outside director has changed enormously. Jeff Morgan was, at one stage, one of those outside directors. Today, our outside director is somebody who’s less than half my age but in that digital space and marketing.

    And also I invest in a few startups deliberately, and one of the business’s products is Startup Daily, which is a daily newsletter for that startup tech scaleup venture capital community. And that was done really deliberately about five or six years ago when I thought I’ve got to get in that community. I’ve got to learn from them how new-age founders think. What can I learn from them? And the best way to do that is have skin in the game, so I’ve invested in five startups, mainly fintechs, one I tripled the money, two I’m still in and going quite well, and the other two, I [inaudible 00:12:14.562] on every dollar, so…

    Ed: Still not a bad start, right? That’s…

    David: That’s startups.

    Ed: I think a VC firm would be happy with that start, right?

    David: But from a professional development point of view, I’ve learned so much.

    Ed: Do you look for any things when you’re investing in those startups?

    David: I have a bend towards fintechs. So, I mean, [inaudible 00:12:35.529] tech at the moment, a tech in the advisory space, and one I was in but cashed in on was Pocketbook, which was a budgeting money management app that sold to ZipMoney, and that gave me an exit to go and invest it elsewhere. And I’ve just started my own startup, a business and finance streaming service. So what I learned from that was it’s way easier to invest in a startup than to get investment into it.

    Ed: Yeah. I think that’s probably right.

    David: So I think that’s…

    Ed: The other thing, it’s quite hard to get out of startups or any business, to be honest.

    David: Exactly. So, you know, and what I’ve learned from the startups is that it’s not about the idea, it’s about the founder. It’s all about the founder. They can have the best idea in the world, but if they can’t cope with growth and if they can’t manage stuff, if they lose focus, then the idea goes kaput. So I always back the human being because a lot of people get caught up in the digital space of going, “Oh, what a great idea. What a great technology.” Yes, it might be, but if the person who runs the business doesn’t execute it well, well then it’s gone.

    Ed: And do you think you’re pretty good at assessing those characters?

    David: It’s a lot of trial by error. It’s not perfect. It’s a lot of referral, but the network it builds is enormous. And that’s why we love Startup Daily. It’s because you…Australia has so man great entrepreneurs. When people say to me, “Oh, you know, everything’s going offshore, Woolworths or department stores are retrenching people,” you go, “Let me tell you about Canva.” And they go, “Canva?” And I would say, “Yes.” That’s a digital design business, and I’ve known Mel and Cliff for years. My biggest mistake is I didn’t invest in Canva when they asked me to. Seven million active clients around the world, employ 1,500 people based in Surry Hills.

    Ed: It’s extraordinary, isn’t it?

    David: And they’re Australian, you know? And there are so many stories like that that I find really inspiring. And they come and chat to me a bit and sort of pick an old hedge brains, but, I tell you what, I learn more from them than I give them. They’re just…I love them.

    Ed: So speaking about that word, inspiring, I’m just wondering if there’s any other business leaders that you find inspiring, anyone that you’ve worked with or has mentored you at the time?

    David: Yeah, there are just so many. Because I worked in the media but still had my family business, and Gerry Harvey always took an interest in the business. When I was doing…we do the interview for whatever I had to do, and he go, “How’s the business going?” I remember one day he said to me, and the business is going pretty well, and he said, “Ah, Kochie you’ve never been in business unless you’ve been to the brink, looked over the edge, and come back for it.” I thought, “What a grumpy old bugger you are,” until it happened to me, and I thought, “That’s probably the wisest sort of bit of advice I’d ever received.” Number one, to snap you out of that optimism that it could never happen to you, and, secondly, to learn from it, and learn how to recover, and rebuild and build back up again. Best bit of advice.

    Ed: There will all be good lessons for the situation we find ourselves in now, so we’re talking going to the brink.

    David: Yeah, yeah. Absolutely. And it’s about sort of learning from it. It’s acting decisively, it’s trying, which is hard if you run your own business, to take the emotion out of it, and to also understand that it’s the survival of the business that is the most important thing. And I think going through what we’re going now, we’re in a deep recession, I don’t think it’s gonna be as deep as I originally feared.

    And a lot of people struggle with their staff and the hard decisions they’ve got to make on staff, and that’s great because you know you’re affecting people’s lives. You know, it should be emotional to go through, but you’ve got to understand you want the business to come out at the other end. That’s more important than individual staff members, and, sometimes, you’ve got to make hard decisions to make sure you can have that resilience to get through.

    Ed: That’s so true. I always say it regularly with small business owners that really end up putting their staff first to the business’s detriment sometimes. That is a general sentiment.

    David: Yup.

    Ed: Just going back to the crisis, one of the things that I’ve almost coached myself out of bed with in the morning to give me the energy is reminding myself of why I got into this in the first place. So what was your purpose with getting into business?

    David: All right. My purpose, I suppose, it’s build around what I’ve done consistently, and that is information to ordinary Australians and small business people that will help them succeed. And when I first got into media and business media, I was pretty young, hard to believe, had hair, and all of the gun finance journals and finance commentators were all old, gray like I am now, and I thought, “How do I get there?”

    And back in those times, there was no personal finance columns, no personal finance sections in newspapers or whatever, and I thought, “Okay, how about I focus on being the interpreter of investment information for spouses of these business leaders, or their brothers and sisters, or their neighbors?” And at the time, I remember the finance media would look down their nose at me and go “[vocalization] That’s not really journalism,” you know? You should be writing to impress chief executives. And I thought, “Okay, this is where I can carve out a niche of being seen as the person that understands what the average Australian is going through and giving them the information that is only really preserved, you know, for the [inaudible 00:20:02.141]”

    Ed: Yup. Translating it, almost.

    David: That’s right. I’m the translator, but to do it in an entertaining and approachable way, not a… Because the greatest emotion I think is still things on basic human emotions, whether it be fear, or greed, or lust, or vanity, or whatever. Everyone goes, “Ah,” you know, the big emotion for money is greed, and it starts at fear. It’s fear of losing your money, fear of being conned, the fear of not understanding what you’re doing. So if I could overcome that fear and have people say, you know, “Love him or hate him, seems a good bloke, I could understand what he says. He’s got a sense of humor,” then that’s what I set myself.

    And I think so to really…if you want a driving force for me, it’s try and make other people successful. Whether you’re a average person with your money, I want you to succeed in building wealth, and a future, and a stability in your life. For a small business person to be a successful person, number one, and have a successful business as well. And that’s what’s been the basis of what I’ve done ever since I started the businesses.

    Ed: And that’s now translated into Pinstripe Media, which is your business.

    David: Family business.

    Ed: The family business.

    David: Yup.

    Ed: Can you tell us a bit about that and what it does for non-media people like me?

    David: Yeah. Well, it’s basically a resource for small business owners and people interested in personal finance. We have digital brands in publications, “Kochie’s Business Builders,” which is for small business owners with, say, 5 to 25 staff. A TV series, 12th year, we’re just about to start on Channel 7 with a big website, [inaudible 00:22:06.014] Flying Solo is another brand we have for solo entrepreneurs, people that work at home for themselves, sole traders. And then Startup Daily for that startup tech scaleup community, a daily newsletter there. So it’s a digital media business all about information.

    Ed: Yeah. It is interesting to me, and we’re lucky enough to count you as one of our clients. And when I first heard that news, I was, obviously, very proud as a business owner myself to have secured your business and to be helping as well in the same way that you’re helping your clients. But it was also a side of you that I didn’t know. I knew of the media personality, but to hear a bit more about how you are a small business owner wanting to help small business owners…

    David: What I do on “Sunrise” is a hobby that got out of control, you know? I was asked to fill in on “Sunrise” for three months, and that’s 18 years ago, and it just kept going. I love it dearly. To get up at sort of really early hours in the morning to go and do a breakfast show, you’ve gotta love it, and I really have a passion for it. But also I love it because it was another sort of organization I help build. We see “Sunrise” as its own separate organization within 7. When I first started, our viewing audience was only 10% of our major competitor. We’ve now won breakfast for 15 consecutive years.

    Ed: Is that right?

    David: Yeah. So I’m really proud of what we did there. And I like building things. I’m fascinated by people with what makes them tick, that’s why “Sunrise,” you meet extraordinary people doing amazing things and ordinary people doing extraordinary things. And I love that you learn from everyone, and that’s what I love doing, picking people’s brains and often pinching their ideas and using them myself. You can always learn, and you gotta keep…

    Ed: Most entrepreneurs do that, yeah.

    David: You just gotta keep learning.

    Ed: So, David, you were saying that with “Sunrise,” you’re up at 3:30 every morning?

    David: No, 3:27. Gotta be exact.

    Ed: Very specific.

    David: Exact, every minute counts because I leave… I’m a very process-driven person. My life has gotta be set. Yes, it can be flexible and change, but I’ve gotta know exactly what I’m doing when. So I get up at 3:27 and I do a, like, 12-minute workout, stretching, upper back, neck, sort of a car’s routine, if you like. And I leave the apartment at the same time every day, I get into work at the same time. And there’s a lot of people who say, “Oh, how do you fit it all in? You’ve got so many different hats,” and it’s because it’s that process. I know exactly what I’m doing. Nothing annoys me more than if I don’t know what’s happening next. I hate being late for anything, and I hate people being late for me because everything’s got a slot.

    Ed: And how do you find some time for yourself?

    David: You gotta schedule it in. I’ve got an extraordinarily close family. I work with two of my adult children. I live in [inaudible 00:25:59.561] so it’s building routine, and for that, I rarely work on the weekend. Lib and I, ever since we’ve been married, Lib has said, “You can work as hard as you like during the week, but on weekends, it’s for family,” and that’s for coaching netball teams, or football teams, and stuff like that when the kids were younger.

    So we’ve kept that going. I schedule into workouts with a trainer Tuesdays and Thursdays at mornings, at 10 a.m., everyone knows not to book anything around then. That’s a bit of me-time. I always used to think personal trainers were for wankers until I started to train for climbing Mt. Kilimanjaro the first time. And I went to this trainer and could not believe the difference it made in coping with the hours because, basically, I’m a shift worker, with the hours and reduction in stress, and that was 12 years ago, and I still go to the same trainer twice a week today. And I have a little team around me, an osteo I go to for sort of an adjustment every month or if there’s a niggle. And it’s all about investing in yourself. And, yes, I work long hours, and, yes, I get up early, but I also invest in support around me to make sure I can do it all, otherwise, the whole thing would collapse. You’d collapse, the system would collapse, so you gotta spend money, I think, to make sure you, as the business owner, are in peak condition.

    Ed: It’s the same in performance.

    David: With my AFL hat on, that’s why I blurt with…professional sporting organizations fascinate me with how they drive for performance because they’re in performance business, which is really public, and that’s what you learn from them as well.

    Ed: It sounds to me a bit like there might be the chance of a comeback on the footy field. You’re staying in such good shape. Do you reckon going for the Rats this year?

    David: No, no. Well, see, I love my rugby. That’s why I played for Warringah Rats. And in the Sydney comm, I played for coach there and juniors, and love rugby, and love my AFL, and sports, and that.

    Ed: Great. And that’s where your family’s weekends, is it?

    David: Yeah, yeah, yeah. Most weekends in winter, Adelaide or somewhere watching football.

    Ed: Oh, good on you. That’s a good way of escaping a little bit. And we find ourselves just to hear it, Barangaroo in Sydney is a pretty special place, isn’t it?

    David: Yeah. It’s a great environment.

    Ed: And why are we here?

    David: Well, this is where my family business is based. Now, I know what you’re thinking. Because when I first [inaudible 00:29:09.539] I thought, “Bloody hell, I can’t afford Barangaroo,” but Barangaroo has been very helpful in getting us here as part of the community of innovation within the towers here, and also because of our ausbiz streaming service. We have a separate commercial studio as well that we rent out to people, and it’s really for…the foundation of that is for the tenants of Barangaroo. So at Barangaroo, we’re very helpful in ensuring we could afford to come here, so it’s worked really well.

    Ed: What a great place to be able to come and clear your head out here as well.

    David: Oh, yeah. Exactly.

    Ed: There’s even a few good restaurants and bars here, I think. [crosstalk 00:29:55.164] probably a bit distracting at times.

    David: Yup. Exactly.

    Ed: But it’s a great spot. And, presumably, the media business, you need to be close to your clients as well, people that you’re working with, and so forth.

    David: Well, sort of we’re in business and finance media, and, of course, around this precinct now is sort of basically the financial harbor of Sydney now. It’s moved from sort of Bridge Street in the center of the Sydney in Circular Quay down to here. So a lot of our clients are here because we produce content for a lot of financial clients who want content to reach their finance customers or their small business customers, so we help them with that.

    Ed: So, David, you told me you’re a man who values punctuality, so we’ll be able to let you go on time. And I just want to wrap up, really, by asking you, first of all, small business is a roller coaster ride. If you could start again, would you still do it all?

    David: Okay. Today, yes.

    Ed: Today? You’re having a good day.

    David: Having a good day. I remember once because, as I said before, my dad was my hero and mentor, and for a stage when he retired from business, he used to do the books and be on the board of the family biz. I remember talking to him one day going, “Freaking staff, they don’t give a toss what happens to me, but they expect me to understand all their issues, and help them, and stuff like that,” and, you know, expecting a bit of sympathy, and he looked at me and said, “Well, sell the business.” I went, “That’s not very sympathetic,” and he said, “That’s what business is all about.”

    Ed: Just toughen up.

    David: Toughen… If you can’t accept that, get out of it. You gotta work for somebody else. And it really jolted me into going, “He’s absolutely right.” So, look, I’m like everybody. I go through periods where I love the business, where I hate the business, cash flow problems, everyone goes, “Oh, [inaudible 00:32:25.833] no cash flow problem. Thank God,” obviously never been in small business. I remember reading Phil Knight’s book, “Shoe Dog,” a great book, founded Nike. And the theme that came through for me was his entire journey until he floated up to something like $5 billion was cash flow problems between retails, and manufacturers, and how he would budget his cash flow up, and I thought to myself, “Oh, God, I’m not alone.”

    Ed: Yeah.

    David: So, yeah, I love it. I couldn’t imagine myself working for somebody else. That’s just my personality.

    Ed: It is. And whether we try to be on the business not always in it as people tell us to be, the reality of small businesses that you are stuck in it. You’ve got to enjoy it. You enjoy that challenge.

    David: And you’re not going to enjoy…anyone who says, “Oh, you’ll love it 100% of the time,” is lying. We’re all human beings. We all get grumpy, we all get too stressed. But you need…I’m lucky because I have a close family and a fantastic wife who figuratively slapped me around and go, “Look, get control of yourself. Understand what you’re doing,” and it’s good.

    Ed: Great. Excellent. Well, thank you so much for spending the time with me. I’m gonna give you an elbow bump.

    David: Excellent. All right.

    Ed: Thank you, David.

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