Podcast Transcript

[00:03:14] Sean Steele: G’day everybody, and welcome back to the ScaleHQ podcast. Welcome back to our regular listeners, and to anybody joining us for the first time. We are thrilled to have you. My guest this week is John Knight - Founder and Managing Director of businessDEPOT. How are you, John?

[00:03:27] John Knight: I'm very good. Thank you, Sean. Thanks for having me along.

[00:03:30] Sean Steele: Mate, it's lovely to have you. Some people, if you've been listening to us for long enough, you may recognise the name businessDEPOT because a peer entrepreneur, like a mate of mine, introduced me to Brad Conn who did his company and family accounting. Brad Conn is one of your Directors of Accounting. And on episode 20, Brad and I unpacked a whole bunch of things around, what Founders need to focus on, fundamentally to avoid failing while scaling. So quite an interesting episode for you guys to go back to. But I always found, and particularly in that episode, I was like, the businessDEPOT has a really interesting business model because it kind of looks like you grew up in accounting and then you spread your wings into the a lot of other services like to list a few from your website; bookkeeping, business broking, capital raising digital, e-commerce, financial planning, franchising, legal marketing, M&A, people and culture, real estate, super tax, like that is a lot of services.

[00:04:25] John Knight: Yes, we haven’t chosen the easy route, Sean.

[00:04:28] Sean Steele: That's what it looks like, but it's exciting. And you grew up in Brisbane, it looks like you've got a couple of offices in Sydney now, and when I was researching, I was saw on your LinkedIn profile that I think it was late last year, you turned 9, and 10 years ago, or 9 years ago, you had 24 people and now you've got a bit over a hundred.

[00:04:49] John Knight: Yeah, we're about that a hundred-mark now. It's funny, you mentioned that growing up in Brisbane, you know our business grew up in Brisbane. Now our business baby grew up in Brisbane, but I grew up out Bush and that was probably a real foundation for why I even care about business so much.

[00:05:05] Sean Steele: Tell me about that, we are interested in genesis. 

[00:05:09] John Knight: Well, growing up in a family business, in a country town, I literally was born into the business. You know, I was taken home from the hospital and into the business in the house. They were all the one and the same thing. My dad was the local sparky, and we'd have the tradies pulling-in in the morning. I'd hear the old school fax machine going off in the morning, and I never knew anything different. But having a business mindset or a family business mindset around. And I suppose, you see the different challenges, you see the different roadblocks. And it wasn't until a couple of years ago that I reflected on that and realised that that was probably very much the foundation of why I care about business owners and why I care so much about helping them get through the challenges that are holding them back.

[00:05:52] Sean Steele: That's so interesting. And so then did you end up doing any of the accounting for the, obviously from looks of your profile, 1993, you kicked off as a, maybe an intern or something as an accountant. Was it…?

[00:06:04] John Knight: Yeah. So, I went to uni and did accounting because I didn't know what else to do, like many accountants. And I did a couple of years out in Toowoomba because mummy didn't want me to move down to the big smoke sort of thing and ended up moving down here, and you know, tried a whole range of different types of accounting services and so forth and got to a point where I was a full equity partner in a more traditional accounting practice. And it was at that point that we said there's more problems we can solve here. And that's why we set up businessDEPOT. We didn't want to be X, Y, Z-chartered accountants saying we're a more proactive, saying we were doing more for everyone. We actually wanted to spin it on its head and actually create a place for people to go to. It's just so happens that accounting is one of those services that we offer.

[00:06:50] Sean Steele: So, when you said in your post that you started nine years ago with 24 people, what did that look like? Was it an accounting practice of 24 and then you went; we're not doing enough here for our clients and that's what created businessDEPOT? 

[00:07:02] John Knight: Yeah, well, I was able to negotiate to take my clients and my fees out of the previous firm that we were with. We also had one of my other founding directors and Bradley Conn, who you mentioned, they all came from that. So, we came across with about 24 people. And so, we negotiated to take that out of the accounting business. So that became our foundation. And when we launched, we did accounting, we did specialist tax, we did book-keeping, we did self-managed super funds, we did business coaching and advisory. And we had a real estate specialisation and we did business valuation. So, we already had a pretty good cross-section of services within that sort of accounting and advisory sort of space. But it was never the intention to just do those services. It always was that, those relationships would just be the beating heart of the business that would enable us to add other services as the need arises for clients.

[00:07:58] Sean Steele: Well, it's super interesting, because, you know, there's no right or wrong, but there's a continuum there of doubling down and specialising in just trying to scale, you know, one thing and being the master of it, versus, the other end of the continuum, which is focusing almost exclusively on the, I'm not saying you don't focus on the customer on one end, but on the other end going; well, I've got a customer here who's got other problems that who we can solve. We're trusted by them. Why don't we build services that solve those, but it is going to diversify our areas of specialisation and solve more problems for the same customers. Tell me about how you thought about that?

[00:08:30] John Knight: Well look, I think it was just very human-centric. It was very much about the business owner, what's going on in the business owner's world, and yeah, my personality type, if anyone knows Myers Briggs is ENFP. So, I'm like off the Richter scale with F. So, I'm off the Richter scale with caring about people, not wanting to have hard conversations and so forth. So, when I'm sitting down having chats with business owners and they're telling me about their problems, I have this natural inclination to try and solve it. So, very early on with businessDEPOT, we very much positioned ourself as Depot; the place to go. So therefore, if someone's coming to us to solve a problem, we had to live our brand and we had to find someone who could solve that problem, even if it wasn't us. And so naturally over time, with an ethos of if we don't do it ourself, we find someone else. We built these relationships over time. Some of those services came in house and some services are still referred out. And it's very rewarding to actually help somebody get over a challenge within their business and see them project along to achieve the vision that they want to achieve because we had that little tiny part to pay on one little part of their business when they were stuck.

[00:09:48] Sean Steele: I mean, it's wonderful to hear. And so, I'm going to make sure that I tag all of my clients in this one because we have this conversation regularly about if you're in a B2B business, and you've got trust and that client feels like you are a firm that has their best interests at heart, you're always give independent and fearless advice, even if it's not in your best interest, you've always got their best interests at heart, so they want you to be the problem solver. That doesn't mean you have to have all of those things already in your business, to your point, it's about actually being able to bring together a solution, even if you're only a small part of that or not even a part of that, to help them continue to solve other problems. It continues to build trust. It continues to build stickiness and longevity in the relationship.

[00:10:27] John Knight: I mean, collaboration is a word thrown around way too much. But one of our values, we call them our; that's DEPOT statements, is ‘Collaborate to innovate.’ Like, let's not try and hold onto something that we are not the best person to deliver. If we are the best person to deliver, by all means let's do it. But if we are not, give it to somebody else to do, the client will appreciate because they'll get a better result. It meant we were able to grow so much quicker because we didn't have a bucket load of cash just sitting there to buy in the services that we wanted to offer. We had to be more like a startup and we had to think more. I suppose, we had to scrape through and just make decisions that enabled us to deliver more solutions to our clients, even though we couldn't employ those people in house and maybe didn't make any money out of it at making that referral.

[00:11:20] Sean Steele: Well, that's one of the things I really want to unpack today is like this business model to me is super interesting, and in practical terms, how you ended up doing that. Because you mentioned… so let's take it step back. Out of all those services you go on your website, which I mentioned before, how many of those are people in house that do that for you and they only work for businessDEPOT versus referrals or sort of partners you might bring in to do that?

[00:11:42] John Knight: So, those services on the front of our page, the ones you listed before, they're all provided by somebody within the businessDEPOT group.

[00:11:47] Sean Steele: Okay. All right. They're all in.

[00:11:49] John Knight: But we're not one entity. Okay? So yes, we have an accounting business still, and we do a lot of business advisory sort of services, and that's still the beating heart and still the biggest part of our business, but our legal business for example, it's a separate entity and we've got a key person who has key equity within that separate company. Our capital raising business is a separate company with a key person within it. Our Sydney business is actually through a license arrangement. And so we don't actually own any equity in the Sydney business, but we've been able to deliver more solutions to clients now down in New South Wales through a collaboration arrangement, we still make some money out of it. We still charge a license fee and so forth. But to the outside world, it looks all one and the same. And I suppose what I think we've been able to do well within our structure is challenge the norm; don't try and hold onto everything yourself, not be greedy. And with the foresight of solving problems first for the clients, we naturally grew from there without being precious about who gets what.

[00:13:02] Sean Steele: I love this. So, you know, I was inspired by this model when I realised that my accountant in Sydney, who I engaged because he was a property expert and I was doing a lot in property, he actually had 13 subsidiaries. And like you guys, he has got legal, he has got bookkeeping, he has got a whole range of services, in each one of those are a subsidiary model where the person who's doing the leading takes a 25% stake in that entity, and the parent company has 75%. They're obviously providing a lot of the leads and the customers and they're hiring sort of delivery experts if you like, who can drive the growth, but also will get, of course, cross-fertilise from other disciplines that they are involved in. You would've learned a lot about how to make these kinds of collaboration models work. And it is there quite a lot of variation in how, or have you kind of learned over time and said, this is the ideal way to set each one of these up and they're almost the same each time you do it in terms of, you know, does the person get a salary? Are they just taking a percentage of revenue? Is it a subsidiary where they've got a specific amount of equity? Do you both put cash in or you guys only put the cash in. Like, can you tell me a bit about that?

[00:14:14] John Knight: I think we've probably tried every option, Sean. So, there are ones that have failed for different reasons, and we'll own those and we just end them when those relationships don't work. So, the way I think about it is, we went wide on services in Brisbane. And so slowly we were adding more services and adding more entities to enable us to deliver more services, solve more problems for the client. They typically have worked by doing separate entities with a key person taking equity within that entity. They get a salary still out of there. And if it's a startup, then we're both putting in capital from the beginning to get that going and to get that started. Others have been a service where we've sort of spun it out from another entity into an own entity. For example, people in culture services, that we provide, was originally our internal HR and Admin manager. she got the drive and obviously hanging around entrepreneurs all the time, wanted to do her own sort of thing. And so, we said, well, why don't you start providing those services to the clients? And so that, we hired that out into a separate entity and did a deal on the equity sort of stake and so forth. It's an interesting conversation for me, this right here, right now, Sean, because coming into our 10th year, we are giving ourselves permission to question whether we've got the right structure and whether it's creating the right behaviour. And in my thinking, it's all about; well, what are you focused on? Because historically one of the things we focused on was actually a license fee model where people, each entity would pay a percentage off the top to an IP entity called businessDEPOT Proprietary Limited. And businessDEPOT provided some services for that, basically the brand, the website. I sort of worked through there by coaching other leaders and those types of things. And that model was about getting a percentage off the top of income for all the entities into that businessDEPOT entity. That's one model, almost like a franchise model, but we'd never call it that, Sean.

[00:16:24] Sean Steele: Of course, not. 

[00:16:26] John Knight: But then there's other models which are more about creating the capital value. And so, as you start to think about, well, what's the next 10 years look like, we need to start to think about, well, what is it that's going to be of value in 10 years’ time? Is it the clip of the ticket off the top or is it the equity value that we create? And if it's equity value, does it get a higher multiple of earnings if it was all owned by one holding entity that owned a bit of all these entities? Or is it better valued separately? I think we all know the answer to that. I don't think we need to sort of question that too much, but from an equity perspective, my point is, if you're chasing equity, then you should structure it a different way. If you're chasing a clip of the ticket off the top, then you should structure it a different way. Or if your vision is away from both of those, then you need to be making sure your structure is aligned with that future vision, not necessarily just what you're doing right now.

[00:17:28] Sean Steele: One of the words that you mentioned in there, which I think is a super important one, which is what a lot of Founders, even if they don't have a subsidiary model or different, even if they're trying to engage their leaders, what they're trying to think about is, how do I align our interests? How do I make sure that what gets created here is that we're both working towards the same goal and we're not actually both driven by something slightly different, which just starts to cause tension in terms of the behaviours. Like, we want to be aligned, we want to be succeeding together. So, if you are somebody driving a subsidiary, do you then rely your, I guess the value you are getting out of that business is fundamentally, dividends along the way plus a wage, because you've got some equity in the business, but then they don't have control, I assume, to be able to sell off that entity to anybody else. And so, they would have to only ever get a, you know, let's say capital event, if the whole business is sold. Is that how it would work?

[00:18:25] John Knight: Yep. I mean, that's how it would work. But I suppose to follow up on your point about how do we get alignment. Alignment is through culture, alignment is through behaviours and alignment is through values. And very early on in my days with businessDEPOT, a great mentor of mine said to me about, I just banged on constantly about values and behaviours and our culture and is probably one of the things I'm most proud of, the ability for us, where we physically have silos of different entities, but the ability for us to look and feel and act as one business and nobody's precious about; I just gave you a referral, give me a referral fee. You know, we don't do that. We have a group of people that are aligned on a vision to help business owners get through whatever hurdles are holding them back. And so, people are happy to give that referral to somebody else because it helps them get over that challenge. And it's that culture that I think means we've got people sharing information or technical information. Sharing technical information, helping people with no charge whatsoever, because it comes around in spades later on down the track because of the trust that it creates.

[00:19:47] Sean Steele: And I imagine then, you know, one of the benefits and one of the special parts of that model becomes, if you are the marketing person and you are dealing with clients and the clients have got a legal need. It's in your best interest to make sure that the person who's running legal is also of really high quality. Because that's what's going to make you want to refer, you know, you're interested in helping the client solve a problem. You're looking for people that you can trust to help them solve that. And does that mean that you end up getting, do you get sort of referrals from the people who are running each of the disciplines to other people who can run other disciplines because they want to be surrounded by people like them with, you know, the right calibre?

[00:20:27] John Knight: Totally, totally. So, it's really interesting where the referrals, the internal referrals sort of come from. And I always talk about Head of one of the divisions and I always talk to them about, well, you've also got to do your internal sales, by you being available to answer those questions, by you popping your head into a meeting to help solve a problem, very quickly, that's your internal sales process, so that people have confidence and understand what you do. So, that when they're out there talking to a business owner and they find a need, they can say, well, maybe you should have a chat to Kirsty within Marketing. Or maybe you should have a chat to Cameron within Legal. And we're never pushy about that. I know there's some multidisciplinary operations where they're quite like, they mine the data and they go, ‘your loan is up for the renewal here. Now go talk to our mortgage broker, then go talk to our state planner’ and those types of things. I tend to take more of what I call a washing machine approach, which is basically we just want all our clients in the broader businessDEPOT model and going round and round and round, and as they're going round in the washing machine, when the need arises, when they've got something that they need some help with, we just want them to think of us. And if they think of us, for Marketing or for HR or for Legal or whatever, at that point in time, then I've done my job with the brand to make sure that we are at least in the discussion as to whether we're the right people to help them.

[00:21:53] Sean Steele: So good. What about the inherent challenges with the model? What's the most, you know, there's obviously…

[00:21:59] John Knight: It's easy, Sean. There's no challenges whatsoever.

[00:22:02] Sean Steele: It's just smooth sailing, right?

[00:22:04] John Knight: Smooth sailing I always love it. Often I have, , usually they're quite a senior accountant say to me, ‘oh yeah, I always had the idea for that model. I was always going to do that.’ Sort of thing and there's not many that have actually pulled off the breadth of services that we've had. And I try to say that without any sort of arrogance or anything, but it's not easy. And not everyone has done it the same way, and some have done it even harder way. But the challenges are people, they're the most rewarding part of it, that they are also the biggest challenge. 

[00:22:46] Sean Steele: Can you be more specific? Like specifically, what's the challenge there people wise?

[00:22:51] John Knight: I mean, people have their own lives, people have their own things that are going on, and so you always want people to be with your brand for a long period of time. Sometimes you bring people that you shouldn't bring in. Sometimes you have people who are snakes in the grass and actually are not aligned even if they say they are. And so there's a whole range of things that come up with people, and the reality is they're humans and they have emotions. And you know, people leave because they're, I don't know, returning to Sweden, we can't stop that. And we would love to have consistency of people for longer and longer in tenure. But the reality is in professional services, the average tenure is reducing. There are less people going into professional services as an option. And so, it's our biggest barrier to success is actually the delivery of work. We cannot get enough people who are wired our way to deliver the work, how we want to operate. And that is undoubtedly, I would suggest the biggest challenge within professional services, in particular in accounting and business advisory sort of spaces, right now.

[00:24:02] Sean Steele: And so, given that challenge, A) Sounds like there's a market force there. Why are there less people coming into professional services from your perspective?

[00:24:13] John Knight: Well, it doesn't help when you've got teachers at high school saying that accountants are not going to have a job in the next decade because the robots are going to take it over.

[00:24:20] Sean Steele: That's true.

[00:24:21] John Knight: Yeah. My daughter finished grade 12 last year, and there were eight kids in her class at an all-girls’ Catholic school in Brisbane here. She had eight kids who chose to do accounting at school. The schools aren't investing in it, and I think the schools are even actually saying to the students; oh, you know, that option might not be around in 10 years’ time and so there's less people going to uni. So, we need the migrants and so forth to sort of come in. We need the AI. We need the technology. We need the offshoring to happen so that we can focus on the customer experience more. And so it's none of it's insurmountable. It's just a challenge for where the industry is right now.

[00:26:06] Sean Steele: Yeah. Okay. And so given the challenges that are inherent in that, there's more complexity than even just having an internal, everybody's a full-timer or everybody works with a brand, there is no separate entities, there is no profit sharing, there is no equity. Which, you know, does create a different dynamic in relationships. Given everything that you've learned in the last 10 years about what's worked and what's hasn't worked, how are you thinking about the business model for the next 10 years? Are there any like major shifts coming? How are you thinking about taking the learnings forward?

[00:26:39] John Knight: Look, I think, we just have to solve the problem of delivery. And as I said, that's the technology and the offshoring, and whatever it is that I think the industry is going to come up against. And so, we have to embrace that. 10 years ago, when we launched businessDEPOT, we were probably ahead of the curve a little bit with the technology and we were changing things that probably weren't quite ready for us to do it, but we went with it. And we are just at that phase now where it's for the next horizon. What's that next change that we have to get ready for and we have to implement right now? I think the human factor of things will actually get more important. I mean, one of our other values is keep it real. And that's all about vulnerable trust, bringing your true self to work and those types of things. And because we have such a human culture, we actually probably have more feelings and emotions that come out within a work environment because we're asking people to bring their true self to work. I mentioned before the Myers Briggs sort of personality type. I think like 95% of our people have an F within their personality type, which is a little bit scary. It's like it's off the Richter and I noticed it one day on our little map of personality types, and I go; this could be a problem. But the reason they're all F’s is because one of the things that we require from people, is to have empathy and to care for your clients. And so, we don't tend to attract people that come in and they're just cookie cutter, sort of just get the job done and they don't care about the result. And the reason I say that is the human part's going to become even more important. So, from a strategic pendulum, as I'm one breath, I say, we have to embrace technology and we have to embrace offshoring. On the other end, the customer experience I think, will become more human, that they'll want more human interaction, more insights from a conversational sort of basis.

[00:28:41] Sean Steele: Yeah, I agree with you. Well, I always think, you know, whether you put a broad brush around it and say, we're talking about technology. The whole idea is, whether it's using generative AI or you know, some other myriad of technology tools, it's like how do you allow people to be more human? Is always the way I think about, it's like, how do you help them when you look at the way they spend their week, if they're spending 40% of their time doing admin follow up, like stuff that can be automated, stuff that could be done by a machine. Great, do that, because they've got this incredible capability that will never be replaced, that is very human. How do I free them up to be more human, spend more time with clients and more opportunities to create value that way, because to your point, the lowest level activities are more easily automated. All the ones that are repetitive or very specifically…

[00:29:28] John Knight: And we get rid of those little things or make it easier to get the deep insights, then empathy becomes our superpower. Because that then means we are going to be able to have so much better conversation with our clients, and help them out.

[00:29:45] Sean Steele: Interesting. Just from this business model, you know, you've really doubled down on this business model and I love it. I think it's… and there's lots to learn for that, and I think, I'll unpack a bit of it that for our audience, but what's it done? One of the assumed commercial benefits for people when they hear a business model like this is, if you've got, essentially you've got a trust with a customer and you're able to solve more problems around that customer than you can with just a single discipline business that you scale up, one would assume that the, you know, in commercial terms, the lifetime value of customer becomes greater because ultimately, they're spending more money inside your group than they would've spent that same money, but they would've gone elsewhere outside the group. Do you end up quantifying that or being able to see that impact the financials and the health commercially of the business?

[00:30:36] John Knight: I'd say absolutely. Yes, the lifetime value of the client is higher, but also the cost to acquisition is spread across more. And so, the cost of acquisition for a higher value client comes down as a percentage as well. And so I've always been, I suppose big on brand marketing, if you think of it that way. I've always been big on, in the early days, we did a lot of events. During Covid, we did a lot of webinars for free. We always were very generous with content and insights and those types of things. And so, creating that brand awareness was great because when we launched businessDEPOT Legal, for example, they go, ‘Oh, we thought you were just accountants.’ And they go, ‘Oh, we trust them. We trust you now as well.’ But again, we're never pushy with selling across the different services. But yeah, absolutely. Have I done the actual precise calculations of it? No, I haven't. And my natural personality type again, Sean, is, I'm less your detail man, and I'm less your sort of, I'm accountant so I can do it, but I'm more your big picture perception. And so I know when things are going well in that regard, and I bring the other people in to do those calculations and things.

[00:31:53] Sean Steele: Yep. That's perfect. No problems at all. With the benefit of hindsight, what's been the biggest benefit? Maybe it wasn't obvious to you at the start that there would be a major benefit that emerged as you built scale through this business model. With the benefit of hindsight, has there been a big benefit that's really arisen, that was unexpected?

[00:32:15] John Knight: What comes to mind when you asked me that one, Sean, is when we first moved into our premises here, and we found an office that we wanted, and it was too big for what we needed. And what we did was that the landlord said; well take the whole space. I'll give you the first 12 months of the extra space for free, and then we'll do it at a cheap rate, and then we'll sort of get to some normal sort of rates. And so, what we did was we turned that excess space into a coworking space. And at the time it was just a cost sort of consideration. While we weren't paying rent, let's try and break some money in, but what it did for the brand and what it did for the business and what it did for the culture probably was something I was surprised by. Because what it meant was, we had all these different entrepreneurs walking in and out of our office and bringing a different energy to the place. And so, the conversations around the coffee machine were different than it was just us from the early days. So, you know, you'd have a startup sort of tech company or you'd have a events company or a whole range of different people. And so, something which was seen probably as a problem we were solving actually turned into I think one of our great superpowers in the early days because people we didn't know and weren't connected to our brand were walking in the door. They'd bring their clients in. Their clients would then go, what is this place? But it also made the energy different around the place as well.

[00:33:44] Sean Steele: And do you still have that today? You still own this co-working space?

[00:33:46] John Knight: We don't. We got rid of the co-working space at the start of Covid because we didn't want people bringing germs in and so forth. And we needed the space back. And so, we didn't value it enough to go and get more space to do it, but that's partly because we wouldn't get the benefit from it if they weren't actually in our space.

[00:34:04] Sean Steele: So, what have you done in the work from home, hybrid, fully remote, everybody in house, what did you do through Covid and what have you normalised, I guess now?

[00:34:17] John Knight: Yeah, I suppose, I mean we just made everyone work from home during Covid. We're a 100% cloud based already, so that wasn't too hard. We just had to get a bit of hardware with a few extra screens and things for people. Whether it's normalised yet or not, I don't know. We offer flexibility, but we ask people to apply for the flexibility. So, if somebody wants to work Fridays and Wednesdays from home, we ask them to apply for that. It really is on a case-by-case situation. And I think it's still a bit of watch this space in this regard because what we've got now is we have all different people with all different sort of plans and all different things to suit them. I think there has to be something that happens at some point in time because it's near impossible to have everybody in the office at one particular time at the moment. And if we are trying to have a town hall sort of discussion or I don't know, barbecue on the deck or something or other, you've got to move the time of it all the time to make sure you allow for the people who don't work in the office on Fridays or your people that start at 07:30 and finish at 04:00, you know, like it is challenging as a leader in the business to deal with how much flexibility we have out there at the moment.

[00:35:37] Sean Steele: Yeah, I mean, obviously the pendulum for lot, or good health reasons went completely to the full flexibility, everybody from home, et cetera. This whole new hybrid model. I was listening to a podcast yesterday where some of the largest companies in Silicon Valley said, ‘It's absolutely proven now, the experiments has failed and fully remote, it doesn't work. It worked what worked.’ And their perspective was, the reason we all fooled ourselves into thinking this was a new possible normal was because we already all had existing teams at that point in time who already had relationships. So, when they moved away from each other, they were able to continue those relationships because they already had trust. But now, you know, in a fully remote model, when you bring somebody new into an organisation, the ability to bind them to the culture to help them understand values and behaviours. All of those building new teams and continuing to scale becomes, in their perspective, problematic when there's not sufficient interactivity and collegiality that comes from those human interactions that are hard to replace on a screen.

[00:36:39] John Knight: And I would say there is exceptions to that in the All In or All Out, I think you can still build culture. All out. I don't think it'd be my natural style to do that because I'm more of a face-to-face sort of guy. So, I think you can do it, but this hybrid in the middle is probably the challenge for everybody.

[00:36:59] Sean Steele: It's hard, isn't it?

[00:37:00] John Knight: In that you've got half in, half out and you're not making anybody happy. No one is getting an amazing experience. And that becomes the challenge as you grow.

[00:37:10] Sean Steele: Definitely, I watch the space kind of scenario. I certainly don’t know what the solution is because, they all seem to be problematic, at the moment, as you said, and in this middle bit, no one seems to be getting what they need, which is tricky. If we take a step back from the business and I thank you so much because it's just such interesting business model from my perspective, if you think about. I mean, nine years ago, you were 25 people, you're now a hundred people. So, the business has really grown in size. What's one or two pieces of advice that you've received along the way that really has impacted the way that you've built this business or supported you when you faced some big challenges, like, you know, what was the scenario, what was the advice? Who gave it to you, and how did it actually help you?

[00:37:53] John Knight: Yeah. I suppose a couple of things come to mind. There's always a solution. You're going to have different challenges, different people leaving, or different things that are going on. And sometimes you just need to shake it up and think about it a little bit differently to put a positive spin on it or to find how you're going to move forward on that particular matter. I then go the values and the behaviours and just the importance of just indoctrinating that within the business when we have little bits of culture issues start to pop up. It's because we haven't been talking about our values enough. And very early on when we launched businessDEPOT, there was this dialogue around that’s Depot, well that's not Depot. And it started because people were trying to work out who we were and we were leaving a traditional sort of environment. We weren't going to a modern different sort of environment. And so, we were very clearly coming up with sort of rules and people would naturally sort of say, that's Depot and that's not Depot. So, we call our value statements out, That's Depot statements. And the idea of that is that to encourage people to go; that's Depot, oh no, that's not Depot. Which is just as important to say, John, why are you doing that? That's not Depot.

[00:39:10] Sean Steele: That's not Depot. I love that. Can you give me John, two or three things that, because you know, I'm absolutely with you on values and behaviours and how people bring them into rituals or symbols or things that become, entrenched that help the sustainability and the liveability of the values and behaviours. And given you've got a business model where you've got all these different entities and therefore you know, some people who are fully connected and some people maybe are a little bit on the side. What are some of the things that you really treasure that you think have done a great job in helping the values and behaviours become sticky and sort of live?

[00:39:49] John Knight: Well, the first would be how we talk about them, like I just said about that’s Depot, treating it that way. The second would be, you don't have to do absolutely everything exactly the same, but it's what are the values and the behaviours that are non-negotiable so that they have to be the fundamental sort of values. Because some divisions want to be a bit different in a particular sort of area. They want to do some things that are specific to them. And the people we have as key people and leaders within that business, they want to put their own little sort of mark on their little patch as well, and that's okay as long as the fundamentals are aligned. The other thing we do…

[00:40:25] Sean Steele: How many are there, by the way, John?

[00:40:27] John Knight: How many shareholders overall?

[00:40:29] Sean Steele: No, no. How many values are like, you know, all sort of statements? 

[00:40:33] John Knight: We’ve got five. We originally had 10, and we had to condense them down. It was way too many. But it started from a good place of trying to clarify things and then we were able to condense some together. 

[00:40:45] Sean Steele: Can you share these non-negotiables? I'd love to hear them.

[00:40:48] John Knight: Yeah, no, absolutely. So, we've got; guts to do things differently, collaborate to innovate, keep it real, bring the wow and my favourite, give a shit. And so they've come from a lot of work over the years of refining them. And I suppose one thing I'd say about values, is your values can change. Some people say they never ever change, but we're 10 years on, we're a different group of people. What's important to us now, what's important to the next horizon might be slightly different. And so, it's okay to give yourself permission to challenge those every now and then when you've got a different group of people.

[00:41:25] Sean Steele: I think there's almost a … so, the one thing I was just thinking though, that raised for me is there's almost a litmus test. Litmus test in the way I think about values and behaviours is they have to reflect who we are now, but they also have to create some cognitive dissonance, some tension between who we are and who we're trying to become. And so, if there's not any tension in there, then they end up becoming quite static. They're not actually helping you move forward. And so, they can't all be about who you want to be that you're not today. But there has to be create that elevation that sort of lift towards something that's not always easy. And so, I think that's why, as you said, the business becomes a different size. It maybe takes a different direction. That means the team may have to act in a different way or something else may need to be important. So yeah, some renewal is good.

[00:42:09] John Knight: Yeah. One of the other things I'll say on the values or that's Depot statements, is that you will notice that they were statements. They weren't one words, so ‘bring the wow’ or ‘keep it real.’ That was quite intentional, that it very active, and so they were almost descriptive, rather than integrity or empathy and those types of things. And we also attach, so we use Slack for our internal communication. And so, we have an emoji, which we attach to each ‘that’s Depot statement’. And so, if somebody sees something, someone says something on Slack and they think it's in line with one of the, that’s Depot statements, we want them to just react with one of the emojis. And so that is just another way that we try to get some buy-in, I suppose, on the values on a regular basis.

[00:42:57] Sean Steele: And do you do any like awards or sort of these recognition stuff around the values? Like are people nominating each other in addition to that?

[00:43:04] John Knight: Yeah. So, we do, they used to be monthly. I think we've trained them to bi-monthly now where we do out ‘That’s Depot awards.’ We do two awards. We ask everybody to nominate somebody for an award or somebody's done something good in accordance with That’s Depot statements, and we give out two awards. One is the person who receives the most nominations. That's 'That’s Depot award’. But the second one, and this one came from the team and I really love this one. We call this 'The Victory Award’. And we have a tree, which is a physical sort of statue of a tree, and the person who gets the victory award is the person who made the most nominations. So, we're rewarding the person who go takes the effort to acknowledge other people, and if they get the tree, they get to put something on the tree, something that might be Depot reflective or part of an event or something, or rather. And so, we got this growing sort of beast. We had to get a new tree recently because a few things exploded on there and it got a bit gross. The Red Frog lollies started to get a bit gross on there and so forth. But I think that's important in that awards, that recognition of the people who take the effort to make the nominations, I think is underrated.

[00:44:13] Sean Steele: Yeah, I agree with you. Without those people, you don't see the other people lifting up towards it, so.

[00:44:19] John Knight: And then we share what everyone said about everyone else as well, so we share all the comments. Then, so everybody can go in and have a look, what did someone say about me, even though I didn't win an award?

[00:44:28] Sean Steele: And are they anonymised, like are they depersonalised as to who said the comment or is that called that as well?

[00:44:35] John Knight: Yep. Yep.

[00:44:36] Sean Steele: Okay, cool. I like it. Nice. Can I ask you, John, about the future? I mean, you alluded to the fact that everyone is running around thinking about how all these jobs are going to be replaced and so on when it comes to things like generative AI, how do you think, I mean, you've got a broad. list of services. So, I'm sure it's been a topic of discussion at the leadership table around where do we see that there's a whole bunch of augmentation opportunity where we can uplift services or we can make things cheaper, we can make it more efficient, more effective. Where are the places that you think it's going to be most applicable, and are there areas of the business where you think actually it's going to be quite disruptive?

[00:45:13] John Knight: Yeah, I think where it will help is with the little things, not the big things. So, those removing the need to do, I don't know, the quarterly bass, if something was automated to make the quarterly bass done for clients, fan-bloody-tastic, because no one loves doing a bass anyway. So, I think that's where a lot of the help will come from doing the little things which will free up the humans to do the better, more important things. And look, I think every services industry is going to be impacted by it. I think there's a lot of forces within services generally, whether it be AI and technology, what I call the uber-fication of services where everyone's breaking, there's so many more businesses now that are tiny sort of providers of services.

[00:46:02] Sean Steele: Niche.

[00:46:03] John Knight: Yeah, the super niche. I love niching. I mean, as we've got, we always had a real estate specialisation with what we did, but I love the idea of getting other industry verticals because, you know, we do rent roll broking, we do real estate accounting, we do real estate bookkeeping, we do real estate shareholders agreements and legal services and so forth. And so, you got a really nice vertical then, and the insights you get from that industry by being across all those services, sets you apart to your competitors as well.

[00:46:38] Sean Steele: Super interesting. You know, one of the things that really jumps out to me from this conversation, John, is, one of the things you've been able to do is actually build a really strong medium term competitive advantage by doubling down on a business model that you thought would actually really create success with customers. And you know, for those people listening, when I'm not hosting the podcast, I run ScaleHQ, and one of the things that we're just about to launch is our ScaleUps Roadmap Program. Part of which is really about building growth strategy. It's about building a better business, not just a bigger one, and making sure that you are spending the next three years ensuring that in three to five years’ time, you're actually going to have medium term and competitive advantage, because that's really what strategy is about. And one of the things I love that you've done is you've doubled down on this way of doing business that's going to help clients who already have trust with you solve more problems by being able to access different services, but with a similar ethos, and a similar level of care, and a similar level of integrity, and a similar level of professionalism. So, those values shine through in every one of those disciplines. I just think that's a great example of the kind of stuff that we teach in our course. So, if anybody's listening and you would like to explore your business model and your business strategy and figure out what parts of your business model you think you should actually double down on, we can help you with that in the ScaleUps Roadmap Program. You can jump onto www.scalehq.com.au and just click on courses and you'll see everything you need to know about it. I've got one last question for you though, John, which is, the next 10 years, if we take that step back and go; okay, you've just gone from 25 to a 100, you've built out a significant number of services, you've gone into Sydney to launch some more offices in 10 years’ time, maybe even five years’ time. What do you think businessDEPOT is going to look like? Where are you trying to take the business next?

[00:48:29] John Knight: Yeah, well the big hairy audacious goal, I mean, and I probably should firstly say we probably exceeded our expectations. We probably didn't think we would be, we never set out to be big. We just kept taking the opportunities to get to where we are now. So, we probably are bigger than we ever thought we were planning to be. But when we've talked about big, hairy audacious goals for the next 10 years, I suppose, I've always said 30 offices across Australia and New Zealand, but if I'm honest, I want to go overseas as well. Like why can't we take our model sort of overseas and do something with it. The 30 offices across Australia doesn't have to be owned by us. I don't have the money to go and buy 30 offices. I could buy them. There are heaps of people that want to sell. I could go buy them and then widen their services and have different services that are offered nationally through online sort of abilities and so forth. But that is driven more by, there are so many business owners out there who just need help. They just need a trusted advisor to talk to about their business and can direct them to the right people to solve their problems. And when you get out to some of the regional areas like Toowoomba or Wagga Wagga or Lismore or some of these places, I think there's real opportunities and there's great businesses that we can help them achieve their vision, we can help them make happen, whatever it is they're wanting to happen. And so, we can do that through collaboration rather than through acquisition. Then I see no reason why we can't think bigger than Australia and New Zealand as well, and look at taking the model overseas at some point in time.

[00:50:08] Sean Steele: Love it. Well, that's an exciting, you know, we're going to have to make sure that we of course, get back on John to talk about the journey as it continues to evolve, because that's a really exciting place to be. And having been referred into Bradley from somebody else that I trust who's got a very high level of expectation for their accountants, you're obviously doing a great job in the accounting practice, and I love the way that you're building this business. Thank you so much for your generosity of time, and wisdom today with our audience. Is there anything, you've got a big group on this podcast of seven figure Founders trying to break into eight or maybe low eight figures, trying to scale up. What's one piece of advice, or sort of wisdom that you'd like to leave him with today?

[00:50:48] John Knight: I'd say growth isn't always the solution. So, sometimes, it's better to be better than it is to just grow. And so, what's the quote? "Better is better than more.” Sometimes it's better to just spend that time focusing on just getting things working, getting clarity and so forth. Take the foot off the pedal with growth because there's no point growing when you can't deliver on it, you'll do more harm than good. And so, that would probably be one of my sort of words of advice. But Sean, I'm an open book if anybody is interested to know anything more about businessDEPOT or they have any questions as to how we've done what we've done, we're not perfect. We have our own challenges as we've talked about, but I'm always more than happy to share any of my learnings at any of my insights along the way.

[00:51:33] Sean Steele: Beautiful. Thanks, John. How would you recommend people get in contact with you if they did want to have a chat?

[00:51:37] John Knight: Pretty easy. You jump on our website, www.businessdepot.com.au. My mobile number, my email address is on there, but you can also connect on LinkedIn, or Twitter.

[00:51:47] Sean Steele: Beautiful. Well, thank you so much John, and I couldn't agree with you more. Everything in ScaleHQ we do is to help clients build a better business, not just a bigger one. If you just get bigger, as you said, and you just focus on revenue growth, you're actually going to build a weaker business, you're going to be so busy feeding the machine, you're going to get completely forget about your customers, you're actually going to be easier to disrupt because the one who's really building the right relationship with their customers and solving more problems for them is going to be the one that ultimately wins in the end. They're the ones that can have the trust.

[00:5214] John Knight: Totally.

[00:52:15] Sean Steele: Thank you so much. Really appreciate all your time today, John. Thanks so much.

[00:52:19] John Knight: Thank you, Sean. Thanks for having me.