I'm Ed Cowan and this is scaling up.

Most advice about building talent rosters is really bad because it operates mostly under the assumption that you have unlimited capital.

I think really that you're doing a salary cap management roster.

You're limited in terms of your resources.

You have to allocate those resources to build the best chance of winning a competition that will last five years.

This podcast aims to educate and inspire by telling the stories of great growth companies as told by their CEOs and founders.

TDM is an Australian based investment firm that invests globally in fast growing public and private companies.

For more insights, visit our website tdmgrowthpartners.com.

My guest today is Tim Doyle, the Co founder and CEO of Eucalyptus, a digital healthcare business that in just a few short years has redefined what patient first care can look like in this country and abroad.

If you haven't heard of Eucalyptus, you might know it by its House of brands pilot Kin software, Juniper, each delivering vertically integrated care in everything from men's health to fertility to weight loss.

Before founding Eucalyptus, Tim was part of the founding exec team at Koala the mattress and a box leader in Australia that scaled rapidly to over $100 million in revenue and beyond.

Here Tim cut his teeth in the high growth, direct to consumer business model and perfected how to build brands that truly resonate.

But health, as Tim rightly notes, is a totally different beast.

It's a regulated, deeply personal, high trust industry and that makes the scale up journey all the more fascinating.

In today's conversation we cover a huge amount of ground on the evolution of the business, a mini deep dive into the market of GLP ones and most notably the fascinating team building framework the team has used up until this point.

What stood out to me was Tim's clarity about how and why Eucalyptus will win as it continues to move through this hyper scale moment of execution across a range of global markets.

As always, if you enjoy this episode, leave us a review.

Better yet, tell a friend.

And of course, you can find more interviews, insights and resources at TDM Growth partners.com.

Tim, welcome to scaling up.

Six years ago, you finished as the chief marketing Officer at Koala, a very fabled D2C mattress and furniture company that you helped scale very quickly to significant revenue.

And the success of that business was predicated on a few key performance marketing insights that I'm sure provided many lessons for you.

Maybe to start this, what was your core founding thesis when you started Eucalyptus?

Yeah.

So I was at Koala and I think it was like the golden age of the Day to Sea era.

And I think what were the hallmarks of that golden age was firstly like the rise of Shopify meant that you could build an ecommerce offering in a really focused way and a brand around that offering really simply.

So you have all of these high margin categories becoming DTC categories essentially overnight as things shift from like the Amazon world to the to the product focused DTC world.

And then marketing shifting as well because the Facebook pixel is born in like 2000 and 15 ish, I think.

So essentially A targeted marketing, visual targeting, marketing for the first time.

And so those two things put together spawn all of these businesses that are just really fast growing new categories.

But by late 2017, early 2018, you start to see the cracks in the model.

The history of the venture world is you solve a problem and then you throw dollars on that problem to solve distribution.

And then you see enormous scale and returns.

And I think what the day to SeaWorld was showing is actually throwing tons of dollars on top of these businesses was producing, I guess, marginal CAC and an inflated CAC and actually downward pressure on margins.

So you had kind of like the inverse SAS business model and that was starting to really be a problem.

And so although Koala managed to get through it by building like into a broader range of furniture categories.

And so they kind of ended up being a convenience furniture offering many businesses of their type.

And I think Casper in the US being the big one crashed pretty hard.

And so I was starting to think about like, well, actually, VC dollars don't produce good returns when they're invested into more marketing dollars.

But perhaps if you were to invest them across a portfolio and have a range of DTC brands built on that same infrastructure, then you could manage the CACS a little bit more thoughtfully, manage product expansion a little bit more thoughtfully, and produce a much more durable and sustainable business across a portfolio.

And that was the birth of Eucalyptus.

And I guess there was very much a top down view and insight that healthcare was a big category to do this in.

And, you know, quality and experience of people's healthcare could be transformed using technology.

But it's also I guess purely entrepreneurial, seeing a big category top down and saying I'm going to go after that with no necessarily problem statement.

For sure.

You're looking for friction, right?

I think like what I learned at Koala was if you were a renter and moving house often to get a mattress on the day you moved into a place was near impossible.

So you have this friction and then you solve for that friction and you verticalize to solve that friction.

And so I was looking for other places where the Internet could verticalize a category and deliver a like seamless high quality experience.

And the fragmented nature of general practice and healthcare more generally was an obvious, an obvious opportunity that everyone kind of was like it was there in plain sight, but it was always going to be more complicated than, you know, what e-commerce had traditionally been.

And maybe just digging into this House of brands approach that you took to start with, you touched on this unified tech stack that that underpins the House of brands or or the consumer experience came to understand the insight into both the why and the hell.

Yeah, for sure.

So I think we started thinking about a whole range of kind of more classic D2C brands.

But the problem is, is with Shopify existing and, and at the time big commerce and a few others, your ability to differentiate on technology, which is truly like where you can get long term modes is pretty limited if you're building on top of commodity technology.

Whereas telehealth and kind of digital health more broadly, there was no uniform, let's call it technology stack for those businesses.

And also you have a lot of regulatory complexity.

And so I felt that like once we'd landed on health that there was actually an opportunity to build something durable and defensible in the core technology, which justified a different shape of venture investment.

And I think, I mean that is really yielded over time, probably not in the way that I had originally imagined, which was that you could build a whole lot of different brands on top of that stack, but certainly in a way that you can build many markets on top of that same stack.

And that's been a real durable advantage for the business.

Or about just going back to those very early days.

First time CEO must have felt like you're almost running 3 startups at once.

Yeah, Yeah.

I think like that was by design, right?

So I think what we relied very heavily on was a talent model where we believed that essentially the best professional services talent was massively underutilized in Australia.

So if you go to San Francisco and you look at the best kind of generalist graduates from the best schools in 2017, they're at technology companies in Australia, they're at law firms, they're at banks.

And so we thought we could drive that shift and then that would give us enough high quality general talent that it wouldn't feel like running 3 startups.

It would feel like managing the three best CEOs that we could possibly find.

We're going to come back to how you've built your talent pipeline and the culture, but you've raised a really interesting point I want to dig into.

So moving forward in the evolution of the business to give the listeners some insight, you've got a House of brands approach.

You create these brands, you allocate capital to these brands, and then use data and really tight feedback loops to understand where you're going to keep investing with the ability to kill those brands and create and spin up new brands as needed.

Yeah, yeah, that's, I mean, that's exactly it.

So this storyline goes pilot first, which is I think like the simplest, it's really a discretion oriented men's health brand.

So you solve for the idea that people don't want to do a face to face consultation and and want to do it online.

Then Keen comes next and Keen is about fertility management and, and specifically really about contraception management and the complexity there is finding the right medication for the right patient.

So I think 30% of women are on the wrong contraception or something around that number.

Then software, which is our skin care brand, you get into personalized formulation.

So starting to have to work with pharmacists to make the products themselves.

And then Juniper comes along as originally a menopause brand, but what has become an obesity brand.

And the complexity there is obviously you have what I would call like much more longitudinal care.

Like you've got to do multi type of practitioner.

There's a lot of complexity, there's blood tests.

And so I think of the platform evolving in complexity to get to the point where it can solve like the big chronic conditions in healthcare.

And in many ways you are laying the foundations for one of the great tailwinds of any kind of healthcare you touched on in Juniper and and obesity management.

Yeah.

And so my outside in view is Juniper would not be the success it is today without having laid those foundational stones through the other brands, but the the technology and know how internally as to how to deal with those chronic illnesses.

Yeah, for sure.

I think like, like I actually one of my main reflections on business building generally is the main skill is staying alive long enough to expose yourself to enough luck.

And then when you get a moment, when you get your moments of luck, I think every business gets a certain number of moments of luck.

And then if you can capitalize on those moments and deliver the execution required to be world class in those moments, then that's what makes a business.

And so in many ways, we were waiting, staying alive and building to the point where this enormous thing happened.

And then you could call that lucky.

And then we've executed really well through that thing.

You might call it luck.

I'd almost say you had a top down approach to start with in that you saw the healthcare opportunity, but in actual fact, OBC management was bottoms up.

You could actually see around the corner to see the emerging consumer behavior, wrap your arms around it, wrap your technologies around it.

And as you say, then benefit from it.

And, and to give people an idea and we'll talk about the scale of the business in a second.

I think the weight loss market more broadly in the next 10 years is gonna be a trillion dollar category growing at you know maybe close to 10% a year like we're we're talking about one of the one of the biggest markets.

There's a very funny, we do this very funny thing in times and inside Eucalyptus, which is the equities research analysts will always publish like every six months an update on the category.

And like the first time Goldman published about GOP ones, it was like it's going to be a $250 million, two $150 billion category.

And then six months later it was a 400 billion, 600 billion, 800 billion, a trillion.

And it's like, well, I mean, where does it actually?

I think that the thing that the thing that like is the truth now, right is like it looks increasingly like the next generation of particularly the GOP ones and the the associated medications will we'll have like broad benefits, particularly in the prevention of inflammatory based diseases like Alzheimer's.

And so there's a chance that like everybody is on some version of a medication like this at some point in the future.

And so that it's the biggest thing to happen in healthcare in in 25 years.

Maybe just to level set with the audience, because I'm sure everyone has heard of GLP ones, but maybe to take a step back and give exactly what these drugs do from a market lens and then maybe overlay that with how eucalyptus are using them.

Yeah.

So I think the simplest way to think about their impacts on markets is on average people on AGLP ONE will lose somewhere between 10 and 15% of their body weight in six months.

And so everyone from, you know, the overweight kind of BMI of 30 all the way up to, you know, the extremely obese and, and kind of severely disadvantaged by that.

Like there is the opportunity for people to lose so much weight and the impact on that on their long term health is like phenomenal.

So you obviously see like the prevention of diabetes and, and what that does, but you also just see so much impact on people's mobility on their mental health.

You're even seeing the drugs have impacts on things like addiction.

And so basically, I think the simplest way to think about it is like, what happens if obesity is fundamentally curable?

And then what does that mean for everything?

And I think that's the question that we're all still kind of grappling with.

What about the eucalyptus overlay of a kind of traders a whole of care platform?

The Moat you have is not simply to distribute GLP ones for sure, because people can access that drug through a variety of means.

The Moat you're creating is this platform.

Around, yeah, yeah.

So I think like what you think of ourselves as an outcomes business.

So if we can deliver better long term health outcomes to patients, they will pay for those outcomes.

And So what does that actually really means?

I think that's like the common phrasing, a lot of health across a lot of healthcare businesses is the journey is not seen seamless.

Like there are moments of friction, so there are access and education moments.

So if we think about how do we get a patient comfortable with the journey they're about to go on, how do we get them the right advice?

How do we get them that advice in a shame freeway?

And then how do we get them comfortable with starting?

So that's like challenge one.

Challenge 2 is how do we get them to effective weight loss.

So right dosage management through side effects management through plateaus.

How do we make sure they succeed?

And then how do we make that success durable by wrapping the services around them, whether that's coaching, whether that's education, whether that's actually just removing the friction to the right next product.

And so in one year, in three years, in five years, a patient's metabolic and therefore kind of like their whole health is as good as it can be.

And, and ultimately, if the category ends up being a category where people come in shop e-commerce style, lose 10 kilos and then bail and come back in two years, if that's the way the category ends up, then I think we won't win.

And actually it's a net bad outcome for the health sector generally.

So we're trying to be this care management platform.

And we started to say clinical results far exceeding those other people who may be accessing these drugs elsewhere.

Yeah.

So the, I mean, the gold standard here is the the clinical trials that the drug companies run.

So Novo has obviously run trials all the way through from Saxenda to Wigovi Lily with Ninjaro.

And what we see consistently in our cohorts is patients outperform the clinical trials from anywhere between, you know, 15 and 50%.

And I think what that really comes down to is what technology gives you the opportunity to do is provide support to patients when they need it.

I think like the big achievement of what we do so far is timely advice.

And when that works for people, they're more likely to kind of keep going.

And when they keep going, they're more likely to get better outcomes.

And so that's been the real the real success of the business in reality.

You touched on Novo Nordisk and and Eli Lilly there.

Maybe give a sense of the relationship because I'm sure the outside in view is huge drug companies, all the value created falls to them ultimately been an actual fact.

While it may be a commodity drug, there are ways to actually create value inside that value chain from consumer to to drug companies.

Well, they, I mean, they don't win if patients are flipping on and off medications between medications, using suboptimal medications, using, you know, generic medication, whatever it ends up being like they need to deliver outcomes as well.

And so there is a real interest for them in how do you make sure that patients get the outcomes that they need and get the support that they need because they want to see patients succeed, obviously, like as a moral imperative.

But you know, a big part of what they need to think about is like how do they negotiate with governments in the long term for what subsidies that look like in this category, for what care models look like in this category.

And so us leading the way in the care model and showing that these drugs can be effective long term with the right services wrapped around them is both validation for the way they operate, but also really important part of what they need to then take forward and present to the world.

And, and then I think a really important part of what the relationship between these digital clinic models and the major pharmaceutical companies can be is like a partnership to launch new markets.

So let's take the example of Japan where both the primary medications have launched in the last year.

There's a huge market education piece that needs to happen.

And I think like an example of Japan's an interesting one because although people don't typically associate the Japanese population with high rates of obesity, you have high rates of heart disease and very high rates of diabetes.

And so you need to educate the market on their suitability for these medications and actually the need of them.

And so there is like a shared interest in getting that education out and getting it out in the right way.

So you don't want to promote the wrong type of weight loss, but you also want to make sure the patients who need these medications are aware of them.

If you look at any successful drug or medical device, the first part of any flywheel is education, the second is access.

And you're obviously providing that to a degree.

But there's also this probably overhang that many people think around reimbursement around regulation.

And so do you have a forward-looking view around reimbursement for these drugs and what impact that would have on your business?

Yeah, it's going to be really interesting, I think.

So we are working with the NHS in the UK, which in many ways is, I mean it gets a bad rap, but it's definitely the global leader on digital health and thinking about how digital health plays a role in care generally.

And so we likely see what will happen over the next, I think it's probably going to be 3 years in reality is we'll see government start to look to subsidize these medications more, but we'll only do so in situations where the outcomes are going to be clear.

And for those outcomes to be clear, the wrap around care is going to have to be there.

So I think like what we see ourselves doing in the medium term is being kind of a supplier to the government in a care model and in a holistic care model so that patients can succeed on these medications and get access to them in the right way.

Because the thing that we absolutely can't afford is like a a yo yoing populist who lose weight on medications yo-yo their weight back when they go off.

And then we have actually a worse problem than what we started with.

And I think that's a real fear from from health administrators around the.

World, it's an interesting framing because many people would think in actual fact that would erode the margin of your business.

But if you can wrap your platform, form and standard of care around it, in actual fact, it's creating significant better advantage.

Yeah, I wouldn't think of like this is a question I get asked all the time, which is like what happens when prices go down, drugs become more accessible.

I wouldn't think about the business as margin on top of access.

I think like ultimately what we are is we get paid for the care that happens around the drug and we get paid like at the moment we get paid quite a high dollar margin because the cost of the medications is very high.

So it's a relatively low percentage margin, but quite high dollar margin as the.

So if drug cost comes down, you probably see the value of that care remain about the same.

And so you see an increase in the percentage margin and a drop in the AOV and an increase in the Tam.

And so there's probably more durability around what happens in the category than people expect because the things that people pay for is the wrap around services that actually matter.

And so those kind of have a reasonably static value regardless of where the category goes.

Yeah, it's an interesting insight.

You touched on regulation.

Healthcare, by inherent in its very nature is complex and part of that complexity is born out of this regulation that is put on you by governments or regulatory bodies.

What are some of the key lessons that have emerged for you?

I'm sure there are many things that you didn't know what you didn't know.

I'm sure it's a lot easier to to sell foam mattresses than GLP ones.

Yeah, I think, I think there's been so many lessons.

I think the thing that I think about the most in the context of regulation is there are so many temptations at so many points to move too far in either direction.

So either be like the regulation is Gray here, therefore we should operate in the Gray.

And there's always short term incentives to do so.

And then in reality, like in the long run of things that never works.

And then the other side of that is also true where it's like you can set a standard for yourself that is what you perceive to be where the market is going, but you can make yourself uncompetitive while you do so.

And so an example would be is the content model in Australia is that you have to have synchronous phone consultations for any telehealth consultation basically, or for first time telehealth consultations.

If you were to be like, OK, we're only going to do video, then patients wouldn't choose you.

And so you kind of have to meet the regulatory bar where it is, but also set all of the standards around that to ensure that's done safely and in high quality.

And so I think where we've really where I've learned a lot is like as ACEO in this space, you don't really get to make those decisions.

You have to rely on the clinicians to make those decisions.

And so we've increasingly just build out a really, really strong clinical team and they really set the standards there.

And I think we recently released like the first version of telehealth standards for clinics.

And I think that's like an example of where like we've built the infrastructure and kind of shown the way that this can.

Be done.

And now we're trying to like set that standard across the industry.

So 2 follow up questions.

One is dealing with this complexity now across markets.

So that might be the standard of care in Australia, but now in Germany, Japan, the UK want to open markets regularly.

How have you navigated your way through that complexity?

Through regulation?

So a couple of things there.

So firstly, you need a really strong legal trust and safety and kind of public policy teams because you're going to have to assess markets really well.

The second is the technology.

This is where there's like a huge amount of technology investment that often gets underpriced.

When you think about businesses and there the way that they operate and the technology operates is like we're essentially like a compliance platform in many ways.

What we do really well is set up in new markets.

So we do asynchronous consults with a pharmacist in the UK.

We do synchronous consults with a nurse practitioner or a doctor in Australia.

We do synchronous consults with a doctor in Germany.

We do synchronous consults with a doctor in Japan.

Then sometimes we have a network of partner pharmacies, sometimes we own a pharmacy, so we own a pharmacy in the UK.

Sometimes we work with a single partner pharmacy.

So a good piece of technology infrastructure that can handle all of that compliantly is actually like where years of our time has gone and you don't really get paid for that.

But when you what really happens is it's the platform by which you can scale quickly and people really under price that when they they think about what you do.

I mean, it's amazing even having this conversation from where you started in, in building a House of brands and and being a marketer to Fast forward six years and, and really being a specialist in technological know how to bring healthcare to market.

Yeah, I think it's like, I actually think of that as like that's been the long lesson about DTC businesses and maybe consumer businesses more broadly is DTC was actually a launch tactic.

It was never a business model.

It was a way to get to market and to scale fast.

Many, many consumer industries, you don't get the value until you've already built a lot of infrastructure.

So it's not like SAS where you build a piece of technology, it's differentiated, you pour distribution dollars on it and you go like in healthcare, you need all of the compliance infrastructure to scale.

So what the T2C actually gives you is a way to get the revenue wheels spinning so that you can then build the compliance infrastructure so that you can then build a differentiated experience.

If I came to you 6 years ago and was like, we're going to build the comprehensive multi market obesity platform, you'd be like good luck, see you in, you know, go raise, go raise $50 million from somebody and no one's writing that check.

And so consumer and particularly let's call it regulated industry, consumer I think is very about being able to use the right tactic at the right time and pick the right way of making money at the right time so that you can scale to something that's actually differentiated and high quality.

Yeah, it's, it's interesting.

Why does this regulation and compliance exist?

And it is to allow the consumer or the general population as it relates to healthcare, because everyone is your consumer, to deeply trust the process and the brand which they are purchasing from.

And ultimately, as any consumer brand, brand trust is, you know, this north star that they're trying to achieve.

And so you've almost reworked it or re engineered to that point that there is high trust in your brand through the regulation.

But there's also been points in time where you've tried to push that boundary as well, because it's almost innate in you as a marketer.

And you know, one of the examples I think about is compounding your own, the GLP one essentially when when there was short supply.

How do you think about that trust trade off?

So there are kind of two questions here.

The first is like, how do brands evolve?

So I actually don't think that we built high trust brands in the beginning.

And I actually don't think it's the right aspiration to build a high trust brand in the beginning.

You have to build a differentiated experience in the beginning.

So you have to solve a really narrow problem.

Too many, too many companies set out to build broad brands at the beginning, and you just don't have the attention of people who don't give a shit about your broad brand at the beginning.

You need to build a focus brand and then you evolve over time as you earn more attention from your patients.

So we're trying to take Juniper now from a product differentiated brand to a service differentiated brand.

And what I mean by service differentiated brand is a brand that's capable of saying, you come to us because you trust us to listen to you.

You trust us to help you make good decisions, and you trust us to remove the friction to taking action on those good decisions, right?

Like that's the pillars of the Juniper brand as it goes from being an obesity brand to a service brand.

But if I said that at the beginning, people will be like, shut up, like I don't care.

And so brands evolve.

And so in answer to question one, I think like trust is actually downstream of a lot of brand building.

And so you have to build incrementally into it.

And then on the other side, and like how do you balance trust in a world where there is an inherent need or or desire to kind of push the boundaries as like a marketer looking for growth?

I think like in that specific instance, we were forced into that position.

I think like we had 20,000 patients at the time who were about to be told that they couldn't get their medication.

And so you get into the situation and like the real true version of that story is we're saying, OK, we have two choices.

We have give patients no medication or find an alternative.

The obvious better alternate path is to find an alternative.

So then you go, what are the alternatives?

And one of the alternatives is this medication can be made.

And so you go, OK, well, if we make it, can it be done safely?

Because there's obviously just 100% stop, go point at can it be done safely.

So we get it, we get it tested at 5 different universities.

They all come back and say, Yep, it's, it's safe.

And so then you have a risk based decision to make.

And it's our clinical teams, our legal teams and me going, that's probably the right decision.

And we'll, we'll worry about the brand ramifications on the other side of this.

But history will show that we're right because we followed this process through and that's kind of how it played out.

You're listening to Scaling Up with Ed Cowan, a podcast brought to you by TDM Growth Partners.

Visit the website tdmgrowthpartners.com or for interesting insights and commentary, follow us on Twitter at TDM Under Score Growth.

So maybe just to round out this discussion on the business as it is today, you know, a dominant force in Australia have grown from nothing to very significant in the UK taking on Europe and and new markets.

Maybe you can just give a a snapshot if you will, of what the next couple of years brings.

Yeah.

I said the way that I think about the next couple of years is we have, let's say 150,000 active obesity patients at the moment and 1% of the total global population that could be benefiting from these medications is currently on them.

And so if I just hold through the Tam expansion, we're helping millions, if not 10s of millions of people in three years.

And so the real question for me is like, what does that actually look like?

And how does a platform that's capable of serving?

I think we could do a million people on what we have right now, but what does it mean to do many more than that?

And I think there's a solution.

There's like everything has to get 5X better.

And I think the interesting thing that's happening is the cost of high quality health advice is essentially going to 0.

And so how do you build a system that's capable of delivering that high quality health advice to many more people managing their care journey safely?

If, if we go three years into the future, I'd love to think that we're doing multiple, millions of patients, managing multiple conditions for them and ensuring that ultimately like they end each year that they're with us healthier than they started.

And I think that's a pretty simple but admirable kind of direction for the company.

It'd be crazy not to ask the impact that AI is having on your business because you are very much, you know, Gen.

1/20/18, it was a thing, but it wasn't necessarily either going to provide a headwind or a tailwind to your business.

But ultimately, it will be a defining force.

Yeah, it's it's actually like, it's so exciting because I actually think one of the fundamental insights of Eucalyptus is that startups and the mobile Internet change the way the companies were built and the cloud change the way the companies were built.

And we're in a way derivative of that.

We like took those insights and took them to a category where it wasn't really technology defined.

But now AI is such a platform shift that you go, Oh my God, all of my assumptions about not only how companies are built, but like what companies do and how they operate are being challenged.

And so you just feel so privileged to be a capital allocation with technology, resource and scale at a time when the world is changing fundamentally because you you get to do like first principles, problem solving across design, across product, across team.

Like how do you measure culture in a world where inside is capturable in so many new ways?

How do you build product in a way where prototyping happens in minutes?

How do you build product in a way that you still have to meet all of the compliance standards?

Like how is AI going to impact doctor consults?

And is it human eventual to get removed from that loop?

Almost certainly not.

But like how much assistance actually happens?

How much can a patient get?

Like when ChatGPT will tell you anything you want about your health?

What's the role of AI product that's a bit more constrained?

You know, like, so it's just like fascinating across every variable.

And I like, I'm both terrified and also just like incredibly excited to be able to build in this time.

Let's get on to people and culture because you've had to build this business from the ground up.

And as you said at the top of the episode, you took this generalist approach to hiring.

And many people think Healthcare is in actual at the other end of the spectrum in that it lends itself to specialist skills given the very nature of the business and the business model.

But what you did was trying to aggregate the best talent, particularly in Sydney to start with, and take them from the Baines, the Mckinsey's, and it was a very successful strategy.

I mean, I just think most advice about building talent rosters is really, really bad because it operates mostly under the assumption that you have unlimited capital and that the only thing that matters is getting the best possible person into each role.

And so like, I think really that you're doing a salary cap management roster and so you're limited in terms of your resources.

You have to allocate those resources to build the best chance of winning a competition, a competition that will last five years.

And so I think most of the best talent managers are actually in the NBA and in, you know, the AFL, where you've got this idea of building a roster that has to last.

And so the thing that like I always think about is like, where do I want to be investing dollars?

Like you need a certain number of people that are world class.

You need a certain number of people that are under priced and on the way to being world class.

And then you need a certain number of people that you've just drafted that you can turn into great performers in their positions.

Over to our players.

Yeah, as you'd call them role players in sports.

Yeah, like, like, I think like NBA basketball has this concept of like a three and D Actually Australia produces a lot of them weirdly, which is like someone who's good at defending, good at shooting threes and good at passing, but he's never going to be the star of the team.

You need to build a roster that's capable of doing that.

And so when you're early on, you've got such little capital that you need to go which type of talent is underpriced.

And so I was thinking like, OK, where can I get people on high equity, low salary deals that will be able to perform over the next three years across a range of things?

And if I can teach them things, I'll get the yield on teaching them those things.

And so I'm quite good at marketing or growth.

And so I was like, I can teach smart people growth, get them for cheap and have them scale.

And then that will be the core of the business.

It's just like it was always obvious to me.

It's a it's a really fascinating framework.

Let's dig into this because 1000 questions raised to my head.

What are some of the common hurdles then for people to outperform at uke?

So you're going underpriced but highly intelligent room to grow.

It also means for those role players, you probably have to manage their performance well and they're they're up or out.

We got in many ways extremely lucky, but also in some ways extremely unlucky in the sense that the first person we ever hired into one of these roles turned out to be one of the greatest people ever, like probably in the top three people that we ever hired.

And we've had more than 1000 since then.

And so Nicole, who two year McKinsey grad, we found her at a startup event.

She came in super green.

She ran kin for us.

She just grew incredibly quickly and we didn't have to put much like shape around her.

We gave her enough mentorship and enough teaching and she just crushed that.

We were like, OK, that's the type.

And so then we like flooded another 20 in and there was too much variance in that 20 and we didn't give enough shape to that 20.

And so we probably only had another 3 or 4 successes out of that 20.

And so we had to change.

We had to be like, OK, well, we have to raise the bar firstly and then secondly, we have to put more structure around them.

And so I think of the next generation of success is when we brought a couple from Atlassian, a couple from Bain and put a really intense program around them and they now run markets for us around the world.

So our chief commercial officer, she's ex Bain, she's been with us five years.

Our head of international expansion, he's ex Bain, he's been with us five years.

And then that type of skill set we were much more deliberate about developing.

And so I think the flip side of being able to make these like high upside, high variance bets is you have to be really good at understanding when they haven't worked and you have to provide enough shape around them to be in development organization and to labour.

The basketball analogy, I think some teams really struggle.

They can, they can draft well, but the development side really falls apart and those those franchises never work.

And so you need you need to be as development oriented as you are scouting oriented.

Whether it's creating a sporting franchise that has some kind of durability, but in your case it's scaling.

You're a growing business, and so do you think this method holds as you scale?

At some point, do you feel like you need to bring in more specialists, or do you actually feel as though this framework is scalable?

So it worked really well.

There are things that can rocket.

So the first thing that can rocket is if you get into the big leagues too quickly, then people haven't reached the level of maturity where they're like truly world class operators yet.

And so I think, you know, we had to lay off 20% of our team in 2022.

And I think honestly that was largely the result of me getting too excited and not having the the stress tested frameworks to really understand how to operate through different market cycles.

And so I then hadn't brought any actual world class operators who'd been there seen that before, right?

Like everyone was 27 and that was a mistake.

And so that's one time when I think it can really fracture.

And then the second is when you get on the edges of the technicals fields.

And so like when you're looking for product leaders and engineering leaders, I think those are the two big examples.

Finance leaders is another one.

If you, if you take too much of A development mindset there, you can actually just end up with a mediocre leaders.

And and then you, you're in this position where you're like, Oh shit, I don't actually have a leader who's doing the talent development.

I'm not used to hiring at the world class level and I don't have a solution.

And I, we've been caught in that position a few times.

That's hiring purgatory, Yeah.

Have you had to rewire the values, or have you had to add a value, for instance?

Because it sounds like it's a very different organization now, but it's still rooted in many of the same principles.

We've changed our values three times.

I actually don't think we've done a good job of bringing our values to life.

I think what we do very well is kind of like the shared DNA of the organization being self enforcing, but I don't think we then bring that to life very well in how we talk about things like values in the company.

I think like those key artifacts have been really poorly done.

And instead what we've relied on is the key leaders of the business of being there five years and live things.

And so like when I look to the best kind of up and coming leaders in the business, I see the direct relationship between them and their kind of role model figure in the business rather than anything that I've been able to do from a artifacts perspective.

And that's obviously a failing because like narrative is really important, but but that's just how it's been and and something I probably need to do better over the next generation where it's not going to be clear who the leaders actually are at 5000 staff.

You are.

I'd call you a contrarian heart.

You'd probably call yourself a contrarian at heart.

What are some of the contrarian beliefs as it relates to people in culture and scaling teams that you hold aside from this really interesting framework you've just put forward?

Yeah.

So I mean, I try and think about most things from first principles if I can.

And I try and think about like what is true and what is the norms about things that are just dated and don't really work.

And I think some of the things that I think are really true is like L&D in startups is mostly almost always fake.

And actually it's about how you expose people to the right shape of role at the right time.

That is actually how most L&D happens.

And So what you owe to young staff is you owe essentially the right size box and then the right feedback when they are pushing on the edges of the box.

And that's how all L&D should happen.

But you really owe them structure.

And that that is something that I think is done really, really badly.

One of the things about being in a high growth business is it's really easy to keep them low politics because ultimately opportunity is not 0 sum, it's positive sum.

And so actually, I think a lot of people labor over how you create low politics environments in high growth.

And I think that's just a waste of time.

I think actually, as long as it stays positive some it stays low politics unless you somehow be make it political by force.

And then I think the third one that I sometimes struggle with is I tend to get a bit, particularly in times of stability, I tend to get a bit navel gazy.

I like get a little bit internally focused.

I think a lot of discussion about people and culture can actually be discussion about like how you make things good for the people who are working at sometimes at the expense of thinking about the customer.

I just think the main driver of a really good successful culture is if you serve the customer really well and then have good principles behind how you treat your team, but not not the layer of work in between.

I think sometimes that's a bit of an overcooked concept and I think we as a startup sector got into a really obsessive place about that for 2022 and 2023 and I and I, I think it maybe ended up being that damaging.

I also think the inverse of this is true, which I think like all the founder mode stuff at the moment is blade bullshit.

People obsess over founders too much.

Like there is a job for a founder and it's a really important directional job and a job of clarity.

I just think companies are way more the sum of staff member 2 through 9 in terms of leadership than they are about the about the founder.

If I were to get hit by a bus tomorrow, eucalyptus may get better.

And I just think that's true of many businesses.

And then you get a multiplying effect by the founder.

But it's just not what defines successful failure.

It's what defines like the the 2X return to the 5X return.

I think that's my responsibility.

But 1X to two is all the top ten people in the company, and I think that's massively underpriced.

Yeah, I agree.

And in actual fact, as you get bigger, you'll probably find it's employee 2 to 100, not 2 to 10.

And the multiplier effect is greater at the moment than it will be in the future.

Part of your job as a contrarian is to also challenge your own ideas and you've now had six years of experience to being able to do that.

Is there anything that you believe to be true that simply it wasn't so?

Yeah, I just like, I like, I hate so many of my early ideas.

Actually David Walsh from Mona pointed this out to me a couple of weeks ago.

Is that like in the core thesis that I had, which was that like a portfolio gives you defensibility against variance in the kind of business building process.

Like all of My Portfolio bets were exposed to the one type of variance as well, which was that like if the ad market changes fundamentally, which it did in 2021, all your brands kind of suffer.

And so that was, I think a big mistake.

Another thing that I like, I think I've like gotten wrong is and I'm trying to change this now, but I think like I'm actually a relic of a different era in brand building that needs to change.

There was a time when it was super easy to build brands like shiny rappers on good experiences made brand building really easy.

And I think like we've both seen heaps of those brands, right?

And that actually isn't what modern brands are about.

And then the third one is, I think I'm like one of the kind of early performance marketers in Australia.

And I think I'm responsible for a certain, well, partly responsible for a certain type of thinking about marketing, which is that like it's fundamentally a capital allocation challenge.

And I actually think that idea is dead as well.

I think like the arbitrage era of marketing, where by being better at the channels than anybody else, you can build a great business is so over.

Like the way that you need to actually differentiate is great storytelling.

And So what sheets me to tears is like Australian creatives, like they remind me of the last soldier fighting for Japan in the war like 20 years after it's over.

They're like fighting for this idea of brand marketing.

And that's a dead idea, but so is performance marketing.

It just turns out that storytelling is as important as ever and the arbitrage is over.

So you're like being a great storyteller should be more valuable than ever.

But I feel like I've like kind of in some ways.

Raised a generation of marketers that are entirely insufferable which of these performance types and so I, I I apologize to to people that that's that's happened.

To it's almost like we're back to where we started before performance marketing existed, which are great brands are built by drips into a bucket.

Yeah, yeah.

And and that takes a lot of time.

Yeah, and and and good storytelling, like I just think like, so there will never be another Nike, right, Because you can't control a cultural moment like you could at the Atlanta Olympics or when Michael Jordan wears his first pair of shoes or whatever, right.

Those moments don't really exist in the same way.

But that doesn't mean that like storytelling is dead.

You just do it in an entirely different way.

So, you know, it'll be Hawker and on who control their niches but do great storytelling in their niches or normal North Face or, you know, Solomon or whoever it is.

It'll be nice storytelling done in a really rich way for the community to care about it.

And we should.

We should embrace and celebrate that instead of mourning the death of the great granddad who cares?

You talk about your role in arbitraging media over the last couple of years.

You've certainly found your way into the middle of a story or two of the over the last.

Season.

Call that an arbitrage.

I was, I was, I'm curious whether that has been an intentional gaming of the system or not.

So.

So one thing I'll give out as unsolicited advice is for a long time in your start up, you're desperate to be, to get attention.

The best thing that you can do for your company is get eyeballs on it because whether those are investors or customers or whoever it might be, it's actually in your interest to say something.

And then a day comes when you go from desperately needing to be a story to being a story.

And when you are a story, the variance between good and bad is much bigger than you could ever have imagined.

And so things that you've said historically on the way up or the style that you've communicated with on the way up becomes an enormous risk to the business.

And like, you know, I, I said so many dumb things in the space of six months and then to watch them kind of ripple through and impact the business to a point where I had to be pitching.

Well, not pitching, but I had to like explaining myself to, you know, LP's of investors and things like that.

Just like it was enormous unintended downside to me not realizing how the returns to saying things shift over time.

Yeah, it's almost that same narrative arc has almost followed your own personal journey.

I've been lucky enough to see you grow as Aceo and a leader of the last six years to someone who's far more mature in there and more comfortable in their role.

Yeah, yeah.

I mean, you just you just get the reps right?

And you see, honestly, there is nothing like being in the position of being ACEO of a company because the feedback loop on your own actions is so clear and so immediate.

And I think like you have to be quite self reflective to not let it kind of either get to you as being like, I've cracked this or I'm complete mess.

But if you can be reflective about it, it's a real opportunity to kind of grow and kind of improve.

And like I actually owe so much of my own maturing to just like a team around me at Eucalyptus who are extremely no nonsense about how they think about what I say and do.

So like I get great feedback constantly from a group of really high performing people who expect that from me.

And how do you, I mean that that's a really important and interesting thing just to pick on quickly, how do you create that feedback culture?

Well, it must have been.

There must have been some intentionality to that.

Yeah, I think for the early few years of, I think I've been like quite bad at giving feedback to my direct reports until our CEO kind of challenged me on it a little bit.

And I, I kind of realized that the thing that needed to become, that was implicit in my mind that needed to become explicit was that like, I don't know either.

We're all working this out at the same time.

I don't have divine vision on how these things should work.

And so as we problem solve together, let's reflect on that problem solving, not as a manager report style relationship where I have to provide structured feedback on how you should do better in the future, but as peers trying to navigate a space.

And so I view my executive leadership team as peers because they're all as experienced in the business as me.

And so when we do feedback, it's this thing happened, we both lived it, what would we do differently next time?

And that has created a much richer environment for me to exist in.

And I've I've grown much faster in that environment.

It's almost as though for founders to scale, they actually need to have their ego chipped away at consistently and and humbled to the point that they no longer view themselves as the founder all-encompassing of of what the the business should be.

I.

Think that has to be true, right?

I think like, and maybe that's just like the Australian in me saying that, but I, I just feel like I've gotten so much better from having a group of people around me who are like operating at the same, if not better level with autonomy and the freedom to say we should have done it this way.

Maybe just to round out this topic and the podcast more broadly, while we're on people and culture, I'm fascinated by the culture that you have built and I've seen it scale in in many different directions.

But maybe can you lay out what the culture was and what it was today and and maybe what it will be in the future?

Yeah.

We've talked a lot about like the promise to the early employees, right, of of autonomy and the opportunity to grow and learn And like I think that's nice, but that's a chapter in the business.

You know, the path to COO is not clear for someone who joins now.

And so you have to evolve and offer something something different at scale and be something different.

And I think what we are much more trying to be now is a low ego high agency teaching organization.

So I think for senior leaders, they come in and we go, your experience is what got you here, but your problem solving is what's going to get you a seat at the table.

And so there's a very low ego piece to that I think really, really matters and I think is the dominant feature of our leaders.

And then I think there is a real care to teaching and sharing from that low ego place.

So we have this leadership acceleration program internally where leaders in the business run seminars for like people coming up as leaders in the business.

And I think what's been, I really enjoy those sessions because it starts with like, I don't know and I never knew, but here's how I navigated the situation you're in right now.

And I feel like that really resonates with a group of young leaders that are like, so used to being told what the growth of business podcasts and business books has done is like create an environment where everyone can reflect on their careers as like if they were perfect and, and, and planned the whole way.

So I think that's, that's a really hard expectation for young people.

So I think what I see internally at Eucalyptus is our guy who's currently running Juniper.

He, he, you know, started our risk team, then moved into our clinical team, then moved into our clinical operations team and now runs one of our brands.

And I think him saying like, look, I just kind of took it as it came and and developed leadership skills along the way has been really, really important to a group of young people coming in.

And then also has been an entry point for really senior people to come in and say, I'm here to challenge myself.

I want to see my ideas tested and I want the autonomy to do so.

This has been absolutely fascinating, Tim.

Thanks for your time.

I hope the listeners have gleaned as much experience and and insight as I have, so thanks.

Thanks.

Thanks for having.

Me.