When you’re working on any new enterprise, starting a new career, or looking to move up in the world, you might find yourself wondering where you can go to get advice from people who have been there before. Sure, you could start surfing around online and you may come across some great self-help content… but in many situations what you might actually need is a mentor. Someone who can guide you as you go on your journey and provide that much needed advice. Lucy Lloyd is the CEO and Co-Founder of Mentorloop - and in this episode shares the story of Mentorloop and her tips for finding a great mentor.
About This Episode
Kris: From Lawson Media - This is Building A Unicorn, the show exploring what it takes to build a big global business. I’m Kristofor Lawson.
Kris: When you’re working on any new enterprise, starting a new career, or looking to move up in the world, you might find yourself wondering where you can go to get advice from people who have been there before. Sure, you could start surfing around online and you may come across some self-help style content… but in many situations what you might actually need is a mentor. Someone who can give you specific advice and feedback, or share from their own personal experience… and who will help you throughout a period of your career.
Kris: Now many companies might already run mentoring programs for their staff… and usually it consists of filling out a form or a spreadsheet and then being matched with people higher up the organisation. But for our guest this episode - those old processes were just too frustrating.
Kris: Lucy Lloyd is the CEO and Co-Founder of Mentorloop - a company that’s trying to make it easier for businesses to run mentoring programs for their staff.
Lucy Lloyd: You know, there's a common perception of it out there that it's this hierarchical relationship with this sage, Mr. Miyagi, kind of, figure that helps you change yourself and change the world. But we believe mentoring is more subtle than that. In any day we might have multiple interactions that are just tiny little course corrections that help us become better versions of ourselves, give us a little bit of perspective. And so we believe mentoring is vital to everyone because it is actually just, kind of, interactions with people who change your state of mind, or change how you're thinking about something, slightly.
Kris: Lucy grew up in regional Victoria on a farm near a town called Lake Bolac - which is about three hours drive west of Melbourne…. her dad was a farmer, and her mother was a teacher.
Lucy Lloyd: He was a grazer. So basically his day looked like getting up, getting on the motor bike, and going out and rounding up cattle. My mum was a teacher, so she taught at the local high school.
Lucy Lloyd: And so I have two siblings. So yeah, we grew up on the farm. You know, we'd get the school bus in everyday, and then home, and then yeah, basically most of our evenings were just spent running around outside and taming local feral cats to be our pets.
Kris: Did you successfully tame [feral cats?
Lucy Lloyd: Yup, Yup. But when you got them young enough, yup.
Kris: What's the trick to taming a feral cat?
Lucy Lloyd: It's mainly food. Yeah. It's just food. Yeah.
Kris: But despite watching her father run his own business… Lucy says she wasn’t really that interested in ever becoming an entrepreneur.
Lucy Lloyd: I kinda had that role model in my dad because a farmer is all sorts of things. They're running their own business, but they're also a mechanic, they're a vet, they're all these different types of jobs… So now I look back and I see that I had that role model, but it certainly wasn't my natural inclination. It's my co-founder, Heidi who brought the real entrepreneurship to our partnership. I guess I foresaw a future as some kind of professional. It was a little bit dim. I wasn't sure exactly what, but now that it's what I do, I realise I couldn't be doing anything else.
Kris: Lucy says she did well in school, but one of the difficulties with growing up in a regional area is access to educational opportunities. So when Lucy was 15 she moved to a boarding school in Melbourne.
Lucy Lloyd: I was a pretty good student. I was a bit of a nerd. I read a lot. I boarded at school here in Melbourne, and was... I just love Melbourne and fell in love with it when I was 15, and haven't stopped being in love with it. Yeah, I loved study. When I left school, I went to university and studied Economics and French, which basically equipped me for absolutely no career in anything.
Kris: It was during this time at boarding school that Lucy met Heidi Holmes - the person who would eventually become her friend and co-founder.
Lucy Lloyd: We met on an exam day before we actually started school. It was before. It was six months before we actually started at the school we went to. We were both from the country. Heidi is from the country as well. There were a whole lot of girls in there, beautifully pristine school uniforms waiting for this exam, and then we were the two ring-ins from the country standing in the corner. And we just looked at each other awkwardly a could of times, and then said, "G’day," and then started talking. Yeah, we were two girls from the country, basically, amongst all these other girls who seemed to know exactly what they were doing. And so yeah, our friendship was forged from there.
Kris: Right, and then you obviously stayed close throughout school.
Lucy Lloyd: Yeah. We stayed close, but we went in totally different directions career wise.
Kris: After completing school - Lucy went off to the University of Melbourne to study Economics and French… and during that time was starting to dip her toes into the job market. She began working for an online gifting website called Wishlist.
Lucy Lloyd: Before that, all my jobs had been hospitality. I was a big hospitality person when I was at uni. This was my first office job, which was very exciting. When you don't get dirty at work, it's really exciting. You feel like you've arrived. Yeah, I was a copywriter.
Lucy Lloyd: It's weird how it foreshadowed what I do eventually, 'cause I actually started at Wishlist in customer service. I was just answering phones for people whose packages hadn't arrive and stuff like that. That's incredibly good training for running an online business.
Kris: What did that experience at Wishlist teach you about running a business?
Lucy Lloyd: I think it was all around of the moment customer service. Wishlist is sometimes confused with Make A Wish Foundation, but Wishlist was actually an e-commerce play. It was an online department store. It was around 2003, '04, '05, I guess. So it was after the dot-com bubble had burst, but Wishlist did survive. But it was still relatively early in online commerce for Australia. It was early adopters who were ordering packages online or gifts online, and a lot of things went wrong. And so manning customer service at Wishlist was most often you were just dealing with really angry customers.
Kris: Were there any interesting moments in that?
Lucy Lloyd: Yeah. We did a lot of corporate gifting, so I can remember just taking a phone call and it wasn't my fault or anything like that. This is what you think as a uni student, you're like, "This isn't my fault, why am I getting the heat for this?" But yeah, from someone whose corporate gifts, none of which had been delivered, and it was basically February by this point, and they just realised that none of their special clients had gotten their corporate gifts.
Lucy Lloyd: I had no clue how important this could be to someone, that gifts would be delivered like this. Yeah, I really felt ... I guess I took it personally, the criticism and stuff. But it was a really great lesson in turning a conversation around for a start, but also putting the customer first, and appreciating how much can be at stake for a customer that you don't necessarily see when you're speaking to them, or when you're on the receiving end of some bile.
Kris: What did you say to them?
Lucy Lloyd: I think a lot of the time when people are angry, they just want to be listened to. Nothing can be done. It's February now, we couldn't go back in time and get their parcels to them, so it's actually just about listening to them, and just agreeing, and saying, "Yes, I can understand that. Yes, totally." I think that's a really good lesson for anyone because when you start a technology company, you're going to piss users off because you're always gonna be shipping stuff before it's been completely tested, as much as it possibly could be. And so you need to be able to have that, I guess, customer service hat on from the get go.
Kris: When Lucy finished her degree she took up a graduate position with the Victorian Government. It was a role that was focused on trying to attract retailers or other organisations to open up stores or offices in Melbourne. But despite it being a good role - she soon decided to make a move, like many young Australians, to London.
Lucy Lloyd: Well I just fell in love with someone. I had met them when I had been travelling the year before, when I was Europe. They seemed awesome, and were awesome, and still are awesome. I'm not with them anymore, but we were together for a while. Yeah, I fell in love, went over there and just kind of fell into digital.
Lucy Lloyd: I read a job ad in London that just said, "Are you interested in bars and restaurants?" I was like, "Yeah. Yeah, I'm really interested in bars and restaurants," and it ended up being a digital agency that did websites for bars and restaurants.
Kris: So your role there was managing those projects?
Lucy Lloyd: Yeah, it was account management but it taught me a lot about basically digital projects management, SEO, SEM, content marketing, email marketing, social media advertising. While I was there, this was 2008, 2009, so it was still relatively early days. Google Maps had only just come out and Facebook was really, really pretty early. Facebook for brands was very early. It was the forefront of a lot of the ways we communicate now that we take for granted that were just emerging.
Kris: When people go to a new country and they live in a new country, often they can get a little bit of culture shock. Did you experience that?
Lucy Lloyd: Not really. I guess I think the UK, they're pretty close to us in terms of culture. I don't think there's anything closer. So I didn't get a huge amount of culture shock. It was more about just the standard stuff like 1) the beautiful romance of the city was amazing to see, and the history, and then on the other hand, the weather was just abysmal, so that was a shock in the other direction. You take the rough with the smooth.
Kris: What did working in London.. teach you about global markets and the way that business works globally?
Lucy Lloyd: I think that there's a universality to business, particularly English-speaking business, and how people consider it. I think what London did for me, I worked with this really quite entrepreneurial small shop who were running websites and digital strategy for bars and restaurants, and doing so really quickly. I learned a lot about sales, basically, and high pressure sales situations, and talking people through. Because if you're talking to a publican, for example, you know they've got someone who wants to talk to them about the drains, they've got someone who wants to talk about the jukebox, and all the band or whatever's happening. You've only got a couple of minutes to get their attention and say, "Do you want a website?"
Lucy Lloyd: And they've existed for hundreds and hundreds of years without a website or email marketing as a strategy. And so it taught me a lot about how to make the digital stuff vital to people, which is still skills that I use today.
Kris: When the Global Financial Crisis hit in 2008 Lucy and her partner were faced with a challenge. He worked in the banking industry and he ended up getting a payout… so they had to make a decision - do they stay in London or make a move back home? They decided to come back to Australia where there were more opportunities for someone with Lucy’s experience. And she ended up gaining work as a project manager in a digital agency and she worked there for a number of years.
Kris: Now around this time Heidi was building her own company - a job board for mature workers… and it was through running this job board that inspiration struck.
Lucy Lloyd: So she had this database of 20,000 people over the age of 45 who were looking to engage and find a job, basically. But some of them weren't necessarily motivated by money. And so she thought, "One way they could engage is via mentoring," so she was playing around with this idea… Meanwhile, I just worked with a client that was an organisational development company. Together we built this online platform to gamify workplace well-being for companies. It was called TeamTopia. So it was basically a way for teams and companies to build well-being into what they actually rewarded their staff for, through gamification, and badges and things.
Lucy Lloyd: So I was talking about this project. Heidi was talking about her database of mature-aged people looking to engage somehow. We started talking about even our own individual experiences when you're navigating transitions, like I had just moved back from London, she had started this business. Wouldn't it be wonderful if you could connect with a future version of yourself, like a Sherpa to help you navigate those transitions?
Lucy Lloyd: And so we talked about dating sites, and how online dating had been on the fringe 20 years ago, but now was very much mainstream. We thought, "Okay, well why couldn't we do that for the professional connections that help you take it to the next level?" It was essentially the idea for a dating site for mentoring. And we were having a lot of wine during this conversation as well, and so it became very big in our minds very quickly. But even after the wine was finished and the weeks went past, we just kept coming back, circling to this idea.
Kris: How long was it from when you started formulating this idea to when it was like, "Okay, we need to do something about this?"
Lucy Lloyd: It was pretty quick to actually do something, but it was a fair while before we actually started the business. We did it on the side. Heidi had her other business, I was Digital Director of an advertising agency. So on the side of all of this, we, in our evenings, and weekends, and whenever we could basically we were wireframing and building out a prototype of a product that would help mentoring happen more seamlessly.
Lucy Lloyd: And so while it started life as a dating site for mentoring, we started talking to corporates, communities, industry bodies, anyone running mentoring programmes or participating in mentoring programmes, and started to see the same problems crop up. They were there's an admin burden, people were using spreadsheets and emails, there was a total lack of ability to report on the success of mentoring and what it actually meant for organisation. And for the end users, the mentors and mentees, there was often this flurry of activity upfront, but then relationships were left to wither on the vine.
Lucy Lloyd: So to… Everybody believed in mentoring, but everybody had also had a shit experience with mentoring programmes that didn't go anywhere. So all of these problems, we thought, "Okay, well they are problems 1) we could solve with software in a relatively straightforward way, and there's also people willing to pay for it because it was the corporates that were running these programmes."
Kris: So you really heavily researched it before you invested anything in it, right?
Lucy Lloyd: Yeah, before we did anything. Yeah, yeah.
Lucy Lloyd: I had a little bit of background in managing digital projects, so I could wireframe. We just threw up some wireframes, put them in front of people, I guess established who the client was, started to build out a functional spec, and then shopped that around again.
Lucy Lloyd: So yeah, we didn't even know what it was when we were doing it. Now we realise it's validation, and it's customer discover, and there's all these terms for it. But yeah, it just seemed like the right things to do before we ... 'cause neither of us was a developer, so we needed to have a fair bit of conviction before we each put a bit of money in, and paid someone to build something.
Kris: And coming up after the break… Lucy and Heidi decide it’s time to focus all their energy on their new startup.
Kris: This is Building A Unicorn - I’m Kristofor Lawson.
Kris: After spending some time working on their wireframe concepts and talking to a bunch of potential clients. Lucy and Heidi decided it was time to start seriously investing in their idea. So they got together and raised $15,000 each to hire a development team to help them make their vision a reality.
Lucy Lloyd: Yeah, I had to borrow most of it. It wasn't money we had lying around but I guess we had that level of conviction, and put it in so we had this pool of 30 grand. We're like, "Well let's spend," in those days, it wasn't that long ago, but I guess we started this in 2013, '14.
Lucy Lloyd: Dev was a lot more commodified, but also there were a lot more variances in quality of what you paid for, but sometimes you could get something done really cheaply, really easily. And so we kind of probably spent 20 grand on the first prototype, which nowadays, I don't know if you could do. But we did and then we started to sell that prototype.
Kris: Right, 'cause neither of you were developers.
Lucy Lloyd: No. I had project managed dev projects, so we had some idea about specking, and briefing, and quality assurance and stuff, but really we were relying on being able to trust our developers.
Kris: How did you go about that process of finding someone to actually build this for you, to take this vision that you had and then turn it into something real that you could go to market with?
Lucy Lloyd: It started with the wireframing and the functional spec. We specked it pretty closely. Then we shopped it around to a range of different developers.
Lucy Lloyd: We got quotes from offshore ranging from 6k to 200k. It was a huge range. Some people I knew through my network, some people were just recommended, some people we had just found via Google, and eventually landed on this code shop in Collingwood, here in Melbourne, who came in at a pretty good price, but also they importantly questioned a lot of our brief. They weren't just taking it at face value and saying, "Yeah, we'll build this." They actually ran us through a lot of the points and had difficult conversations with us about the assumptions we had made. So we're like, "Okay, well these guys are the partners."
Kris: After getting their prototype built - Lucy and Heidi started the process of trying to build a client base. They reached out to everyone they’d talked to in their research and anyone they could find that would be interested in using their product.
Lucy Lloyd: We just spoke with many people as we could... I don't know how many conversations we had, maybe 60, but we managed to get three clients to use it. It was really a very shit product. Like it was a painful thing to use, but the fact that those clients used it and used it over a period of time validated for us that there was a problem that we were solving, and there was something there, basically.
Kris: It may not have been the best product, however it gave them the market validation they needed to push on. So armed with some actual data, and their three original clients, Lucy and Heidi decided to keep putting more of their own cash into the business to keep the idea moving along…and they did this for almost three years. But by 2016 they had reached a point where they had to make a decision.
Lucy Lloyd: After that initial money we put in, we drip fed more money in, so it was whatever we could find. From month to month we'd put in and we'd buy five or six hours of development to improve the product. Our three clients continued to use it. We kind of got to this point where it was probably the most stressed we were ever in our journey as co-founders where we weren't sure if we were going in or out. We were like, "We got this measures that are vaguely validating what we're doing, but at the same we've both got these other commitments in jobs, and family and stuff." And so it was probably the most tension that there has existed between us was when we were like, "Will we or won't we?"
Lucy Lloyd: And so to ease that tension, we decided to take it outside of ourselves, and we decided to try and run a little funding round. We're like, "Well if we can get 200 grand, based on the evidence we've got, the validation we've got, then let's go all-in and actually do this thing."
Kris: Lucy and Heidi ended up raising $300,000 Australian dollars - which is currently about $215,000 US dollars - and that gave them the confidence to make a leap, put their other careers aside, and embrace the startup life.
Kris: So what was it for you that made you decide that, "Okay, this is the moment"? Was there a moment for you where you're like, "I have to do this full-time"?
Lucy Lloyd: No. It was more, "I don't know if it's the right thing to do this full-time, so I'm gonna take the decision out of myself, and let's bring some external validation," in which was basically the funding round. Because Heidi and I, we were like, "Are we? Aren't we?" One of us would be more into than the other from week to week, so we were just kind of, we were tiptoeing around it, and we couldn't make the jump given our other responsibilities in life without an injection of cash. So we thought, "Well let's make the injection of cash the decision point for us."
Lucy Lloyd: And you know, we threw ourselves into it, and then as soon as we started to get a little bit of traction in the funding round, we were like, "Okay, this feels like right. This is the right thing to do." But I don't think there was ever a moment where we were like, "Yeah, absolutely all-in." It was more, "Let's continue to collect the evidence, let's continue to validate this, and let's get to a point where we're comfortable with the amount of risk we're taking."
Kris: For you, this was your first company that you were starting. Heidi had obviously been there before. But it's always difficult when you're starting a business to decide who does what, and how are you going to split up the equity in the company?
Lucy Lloyd: Yeah.
Kris: How did those conversations go?
Lucy Lloyd: I'm so glad you're asking these questions 'cause it's such important stuff that people don't talk about a lot. I guess the first thing is, equity split. So you're right, Heidi had the experience running a business before. It was kind of her idea a little bit, and she had taken me along for the ride at this point, but she very sensibly was like, "Well it's 50/50 because I want to feel like you're working on this as hard as I'm working on this."
Lucy Lloyd: And it was such the right decision, and has been born out again and again in our journey that we are completely 50/50. I hear sometimes, early stage founders talking about their equity split, and how they're gonna work it out, etc. It's just like, you want everybody in the same amount. I guess it's harder if you've got more co-founders and stuff, but it was really straightforward for Heidi and I, that it was 50/50.
Kris: And then how about splitting up what each of you did?
Lucy Lloyd: We made this big list of all the tasks we both had been doing, so we just use Trello, and just had this huge list of basically role and responsibilities. Then we just dragged and dropped them into each others' lists, basically. That served us well for probably the first year or so, we would just move things across.
Lucy Lloyd: Everybody says we're pretty data-driven. I guess we like to use data to make decisions and so we tracked our time from day one. We use Toggl to track our time, so to see where we're spending time, and we have categories that we use to measure that. That helps us make hiring decisions, but it also helps us to keep tabs on who is responsible for what. Then if we need to have a conversation that's like, "Look, I feel like I'm doing a lot more lead gen than you, can you take this other thing off my plate?" Then we can have those conversations. But it's been pretty fluid.
Kris: You're the CEO. So at what point did you guys decide you need someone that's going to be the CEO? Usually when you start up, people make up titles and whatever they want to call themselves. Did you have made-up titles at the start?
Lucy Lloyd: Yeah, we did. The CEO still feels a bit made-up. When we first started, Heidi was the CEO and I was COO. It was really just Heidi was the boss and I was the other person. Over the course of our first 12 to 15 months, that kind of just shifted and it was just naturally shifted 'cause Heidi had a baby. We did an accelerator that I went to, so I lived on-site at the accelerator. So it just made sense that we shift it to me to be the CEO, and so that I have been for the last couple of years, but it's probably gonna shift back again in the future.
Lucy Lloyd: It just kind of depends what's happening in the business at any point in time. We've got different strengths. Mine is probably more operational, and Heidi’s maybe more bus dev, and the dream and stuff. It almost depends what stage of the business we're at, who's most appropriate, but we're still both co-founders and we're still both 50/50 in terms of equity.
Kris: Talk to me about this process of raising capital. You said you wanted capital to validate that it was worth going all-in on. You were shopping around this prototype that you had with your very small client base, what was some of those conversations like? How did that go down?
Lucy Lloyd: Yeah, it was mixed. I guess before we raised the capital, we had pretty much spoken to everyone in the Melbourne tech funding scene, and we had found them via Google mainly. Sometimes there were lists, curated lists, sometimes it was through introductions. We had spoken to a lot of people and we probably had a list of 100 people that we had spoken to.
Lucy Lloyd: And then when it came to, "Okay, we're going to try and raise this funding round," we probably narrowed that down to maybe 40 that we were like, "Okay, well these are people we actually gelled with, who we thought might be more interested. Let's go around to them." So we ran a structured process. I think we had heard about it from another startup company that was basically… it was kind of… there's all these stories about startups who get term sheets and everyone piles in, and that wasn't our story at all. Ours was we refer to it as a party round, and every round we've run has been a party round. Essentially we shop around a very short two-page document about the opportunity. We call it the opportunity, but it's about the business. We say, "We're taking expressions of interest by this date. If you express interest, then we'll open up the rest of the docs to you, like our data room and our financials, etc. Then we're hoping to close by this date." We try and impose deadlines on that process.
Lucy Lloyd: We went through this process with the 40 people we had spoken to. About 14 of them, 14 or 15 of them said, "Yeah, we're expressing interest to go the next round." Not that they're investing, just they want to see more. Of those kind of 15, 14 ended up investing. So we realised after the fact that it was a really good way to run it because the expression of interest got people… it meant you weren't wasting your time, basically, by continuing to have conversations with people who weren't going to invest.
Kris: One of the big issues with scaling any startup is the amount of equity you need to give up to have the resources you need to grow. If you go to a big VC firm - they aren’t going to just hand over a cheque for free… they’ll want some equity - and the younger your company is, the more equity they’ll be looking for.
Kris: You were raising from the start. Did you then have to give up a huge amount of equity to bring in funding?
Lucy Lloyd: We're pretty comfortable now. You're never completely comfortable with how much you've given up, or not that you're not comfortable, but I guess you're always trying to avoid giving up anymore.
Lucy Lloyd: I think it wasn't a huge amount. I guess it's just about traction. I think raising on an idea is really hard, and there's where you're giving up huge chunks of equity. We weren't raising an idea. We had some traction. Not only that, we could prove that we had put money into the business, so I think there's a little bit of reaching into your own pocket validates, but it also means that investors can't take the piss because you've actually already put money in.
Lucy Lloyd: I think for us, 1) we were really lucky. I guess we didn't go mad with our valuations, and so we didn't have that quibble on the valuations that you can sometimes get, which means that you can have these real swings in your equity stake... When you play a volume game, you speak to so many people that you very quickly are able to triangulate where the right spot is, in terms of equity, and I guess supply and demand. It's like where is the market actual valuation of this business. So that's good.
Lucy Lloyd: But the big thing with raising is learning to hear no. Because you're obviously optimistic, that's why you've started a business. You believe in what you're doing and you just think, "One more conversation, you'll get people over the line," but you waste a lot of time doing that. I think hearing no and taking the no as a gift, which hurts but you need to take the no because it's one step closer to the yes, that's the biggest thing that you have to change in your mindset when you're selling for investment as opposed to selling your product.
Kris: Do you remember the first no?
Lucy Lloyd: Yeah. It's much easier to remember the nos than the yeses almost because there's so many of them. Yeah. When you start something new, there's always reasons it's not gonna work. There's many more reasons it's not gonna work than there are that it is gonna work. It's not even nos. You can just remember people who are friends, and who believe in you just saying, "Ooh, it feels a bit niche." Stuff like that, "It feels a bit niche, Lucy." And so.. yeah, you hear a lot of nos basically.
Kris: What did your parents and your family think?
Lucy Lloyd: I think they were comfortable with the way we went about it, and both parties of my partners were comfortable with that too. We were probably on the risk-averse end of the spectrum of a lot of the founders we have spoken to, in terms of the time it took us to actually validate that we had something, and the steps we took to make sure we had a wage to earn before we went all-in. We did it in a pretty old school, risk-averse way. I think they were comfortable with that.
Lucy Lloyd: Yeah, it's a hard one. I think potentially there's still friends who are like, "Is this gonna come off?" I guess we're still proving them wrong, but to be honest, we're still so early in the journey that who knows. Every day we're still here, we're closer to kind of permanent survival, but sometimes it still feels like it's pretty tenuous.
Kris: That's like the eternal startup dilemma is like, "Is this gonna work? I don't know. It might fail."
Lucy Lloyd: Yeah, and it was big learning for us. I think two things. One is it's really exhausting to hold two truths in your mind that are contradictory at the same time. So on the one hand, it's like, "This is gonna work, this is right, this is actually gonna make peoples' lives better. We're an inevitable and huge success." On the other hand it's like, "Oh, I'm facing five things today that could sink us."
Lucy Lloyd: You've got those these two different truths that are contradictory that you're holding in your mind at any one time, and it can be really exhausting. And so you need to really have that Teflon coating that the conviction that what you're doing is right, and the why of what you're doing is right to help you get through that... kind of, I don't know, it's an inconsistency in the way you're thinking and looking at your life, basically.
Kris: When raising any kind of capital it’s not just a process of pitching to VC firms hoping that someone will invest - you’ve also got to make sure that the people putting cash into your company share the same vision for growth as you do. And Lucy says the more nos you hear while raising, the more likely it is that you’ll want to take any investment that is offered to you. However, Mentorloop has been lucky that their investors were all people they wanted in the business.
Lucy Lloyd: It's rare that someone's gonna want to put money into your business who's not gonna be a good fit with you because they're going to need to believe in you, particularly if you're just so early stage. They're gonna be more invested in you than you are in your business. So it's rare that you actually have those moments where you're like, "Do I want to take this money?" Unless, I don’t know, it was rare for us, anyway.
Lucy Lloyd: We've only heard it a couple times. In both cases, you can always just have another meeting. We just take another meeting, or we bring another party, and we have another conversation to just validate if we're sitting on the edge of something, then we need to do more research, we need to spend more time with that person to see if our hunch is right, that there's something not quite right in our relationship, or whether we just need to satisfy ourselves that they are going to be an ally for the business.
Kris: Raising money is one thing… but once you have that cash, what do you do with it? From speaking with Lucy it’s very clear that Mentorloop is a company driven by data. Every decision appears to be carefully calculated based on business needs… and they used this philosophy when figuring out the right time to grow the team. By monitoring their time Lucy and Heidi could see the business had a bottleneck that needed fixing and so that started the process of hiring more staff.
Lucy Lloyd: We tracked our time religiously for our first six months, full-time in the business, and then we analysed it. We could see that we were spending 40% of our time in lead generation. At this point we were still outsourcing dev. It was gonna be a very big ask for our first hire to be a solo developer, and for that person to actually be someone who could build the right product for us.
Lucy Lloyd: So we continued to outsource it to our original partner, and instead we focused on, OK, we can say that, "Lead gen is taking 40% of each of our time, therefore it's pretty much one full-time person, potentially with a big of automation, so that's who we hire first." So it was really, and I recommend it to any founders to track their time, 'cause it's a really good way to make hiring decisions.
Kris: Like it does sound like you're a very data-driven company. You care deeply about having this data, right through your decision making process.
Lucy Lloyd: We do. I think we could still be better though. It's a hard one because the more data-driven you are, the less likely you are to stumble on something that's gonna change stuff because sometimes, everybody's got access to data, and the data is potentially all telling us all the same things. It's actually the hunches that can give you that step change, if that makes sense. It's let's actually back ourselves with an instinct, then that's kind of where you see the biggest inflexion points in your business… It's if you always wait for the data to tell you, then you're gonna be making the same decisions as everybody else.
Kris: People always screw things up, early on, and in a business life. Can you give me an example of what's something that maybe you were hard set on, "This is the way it should be," and then it turned out it was completely wrong, and you stuffed it up, or you made the wrong call?
Lucy Lloyd: I think two things spring to mind when you ask that. One is the chasing down every single opportunity, regardless of whether it actually led us to where we wanted to go. That was a big thing. Probably the first six months we spent a bit of time wheel spinning before we actually got traction because people would call us up and be like, "Oh, my nephew John is studying this, and he wants to build you an app." We'd be like, Yeah, get John and let's build an app." They'd be like, "Ah, no. Sandra wants someone to partner with her to build this community mentoring things." We're like, "Yeah, we'll build that community mentoring thing." And we never actually stopped to think, "Is this actually getting our business to the goals that we have set for ourselves?"
Lucy Lloyd: So I think that just setting goals for your business in a six-month frequency was a great lesson for us, but also then starting to evaluate what you were doing based on that. It sounds pretty simple stuff, but it was something that we spent a lot of time... Just you're naturally optimistic, you want to chase down every opportunity, but you very quickly need to put some discipline around how you're evaluating those opportunities.
Lucy Lloyd: Then the second thing is people. And so Heidi and I, we started a mentoring company. We were like, "We're people-people, we know people, we can hire great people." We didn't have any rigour around that either. We just would hire people when they turned up and said, "Oh, I would love to come work for you. I've read an article about you." We'd be like, "Great, this person actually wants to work with us knowing almost nothing about us." And we didn't check to see if they have skills that actually matched any of the things we needed to get done.
Lucy Lloyd: And so we had a couple hires early on that were like that, and then we'd get to a point where we were like, "Ah, actually the way our team is working isn't getting us to the outcome we want to get to as well." And so we had to harden up quite quickly, and those people lessons are the hardest lessons to learn.
Kris: Was that sort of a difficult process for you then to have to realise that, "I know we've brought the wrong person in. We're gonna have to let them go”?
Lucy Lloyd: Yeah, that's basically what it was. It was heartbreaking 'cause everybody liked each other. The other things is 'cause you're so small, everybody is friends with each other as well. Yeah, you have to put the business first, or put the goals that you've set first. But yeah, it's hard. You learn that lesson quickly 'cause you don't want to have to feel that way again and so then you make sure with the next hire... And look, it's not always gonna work out, but we've got a lot more process around how we actually evaluate what we need to do next from a hiring perspective, and also then how we actually bring people onboard.
Kris: And we’ll have more of our interview with Lucy Lloyd… right after this break.
Kris: This is Building A Unicorn - I’m Kristofor Lawson.
Kris: In early 2017 Mentorloop went through Startmate - the most successful startup accelerator in Australia. It was an opportunity for the company to grow and expand - as well as meet more investors. The other thing an accelerator can give you is mentorship… and for a young company like Mentorloop, finding good mentors is really important. But despite being a company focused on mentorship, Lucy says it took a bit of time for them to realise that as founders, they, like every other startup founder, still needed that support.
Lucy Lloyd: I think we still had to learn a lesson about asking for help, and I think there's a bit of ... Well one is we're both chicks, we're both non-technical founders, so we felt like a little bit outsiders in the local tech scene. I think when you feel like an outsider, you can get a little bit of imposter syndrome. When you've got a little bit of imposter syndrome, you can have this urge to do it all yourself, and to prove that you're able to be in this industry or this community.
Lucy Lloyd: And so I think we had to learn to ask for help, even though we were running a mentoring company and knew the importance of asking for help, we still had to learn that lesson to actually properly ask for help from people in the community, which we very much learnt now.
Kris: What makes a good mentor?
Lucy Lloyd: It's starts with the mentee. I guess I'd more put it like, how does the mentee set themselves up to find a good mentor? It's starting with their why, or why they're looking for a mentor, what do they want to achieve? And making that short-term and achievable, and something that's definable. Something in six months, I want to have gotten to this revenue goal, if you happen to have a revenue goal for your business. Now go and find a mentor that can help you achieve that.
Lucy Lloyd: I think when you cast your eyes about and see just someone awesome in the community who you'd love to spend some time with, that can be a great mentoring relationship, but chances are, a lot of people are approaching that person to be their mentor. If you're not framing it around a very specific problem, it's gonna be hard for that person to help you. And so the more specific the mentee gets with the ask, the better the chances of success.
Lucy Lloyd: Don't stop at one. We believe in building your own personal advisory board. That's what Heidi and I have. We've got each of our, we've got shared mentors, but we also got our own mentors, separately as well. I've got one that I call on when I've got an issue that I need to solve with the team, or with something of how I'm building our team structure. I've got another one that I call on when I really just need to talk about product, and I've got another one that I call on when I just want to talk about hard metrics and financials.
Lucy Lloyd: And so If you build that personal advisory board, then 1) those mentors aren't gonna get fatigued by being called on by you all the time, but also it's greater than the sum of its parts. It's a whole team of people that you can call on when you need them to help you be the best version of yourself.
Kris: Say you were someone that feels like you need advice from someone, from a mentor, you want to find a mentor. What should you do?
Lucy Lloyd: You should start by yourself. And so start just working out what you want to achieve, why a mentor basically. I think a lot of us just fall into the trap of mentoring’s good, who wouldn't want a mentor? It's wonderful. They can be a cheerleader, they can hold a mirror up to you, they can provide insight. But really, you need to drill down into that why. So why a mentor, why now? Is it about a transition? And often it's about a transition if you want to change careers, for example. Is it about that you're not growing quickly enough? Is it about you have just started managing your team? You need to drill down into the why, so that then you can identify the right mentor, but also importantly so you can frame your ask in a way that it's really easy for them to say yes.
Lucy Lloyd: And so you don't want to rush into the will you be my mentor conversation. That's terribly awkward. Instead you want to start the conversation. So, "Hi, Kris. I see that you've done really well in building up an audience for your podcast. I'm at this stage of my journey. I'd just love to ask you these three questions. Can I take you for coffee next week?" Give them an agenda upfront so they know what you're going to talk about.
Lucy Lloyd: We always see like mentors, when we meet with them for the first time and just say, "I just want to talk to you about three things today," they visibly relax because they're like, "Oh, thank God it's only three." Also, someone's giving me talking points. I don't have to just impart wisdom willy-nilly. I can actually answer questions.
Lucy Lloyd: It's all on the mentee to make it as easy as possible for the mentor to engage. Then hopefully it blossoms into a long-term and beautiful relationship. But even if it doesn't, you've gotten the optimum value from that one interaction.
Kris: After graduating from Startmate in April of 2017 - Mentorloop had landed some great partnerships, including one with the Australian Olympic Committee. The business was going well and they felt the need to scale - so they started raising more cash… and in November of 2017 - closed a seed round of $725,000 Australian Dollars - bringing their total funding to just over a million dollars. And Lucy says this need to raise more cash was once again sparked by data.
Lucy Lloyd: Things moved quickly for us, and so we hit this seem of demand that we weren't necessarily expecting, and so we needed to service that demand. We needed to grow our team quite rapidly. That was one thing.
Lucy Lloyd: The second thing was let's say we couldn't raise and had to throttle demand, and they grow at a lower rate. We were worried we were gonna miss an opportunity 'cause we started to see our competitors start to crop up in the states, and overseas, that at the time we were worried about. We thought, "Okay, well this is an opportunity that we're gonna miss if we don't act now."
Lucy Lloyd: And then thirdly, in just a cursory few chats with the market, we had a bit of a profile now from Startmate, and we knew that there was money there, that we would be able to raise a bit of money. It wasn't a huge amount of money again. Even after that round, we had only raised a total of the million, but we didn't need anymore than that to achieve the next milestones that we wanted to achieve. And so it made sense for us.
Kris: How did you think about managing how quickly you were growing and deciding, "Okay, well we need to hire another three people," or whatever? How did you make those decisions? Was that just all data-driven as well?
Lucy Lloyd: Yeah, a mixture. I think it was. It was a combination of data-driven and the right people coming past us basically as seeing these right people that we could imagine being in the business.
Lucy Lloyd: So we still continue to use the time tracking method of just seeing where we're spending time and where the gaps are. We also, we were just introduced to a couple of awesome people. One of our dev team are from the partner that we were working with, the dev partner, so outsourcing our development, we could see that he was look around, and so we pounced to hire our CTO. That was the beginning of our internal dev team. Which has been a game changer for a company like us, when you bring that in-house. That was a big inflection point.
Lucy Lloyd: We just happened to meet this awesome bus dev salesperson who was keen to join a startup. Again, like customer success, we met some cool people. It was a little bit organic and a little bit data-driven, basically.
Kris: At that time, you had learned the lessons about hiring the wrong people. How do you then convince these people who are very talented, have their own career, etc., to then come and work in your little tiny startup?
Lucy Lloyd: Yeah. And this is where people do PR for many reasons. One is because it helps attract customers, one is it helps attract investment, one is that your parents really like it, and our parents really like it when we're in the paper. But for us, it was about attracting quality talent. Now that I look back on the PR that we did, 'cause at the time, we were just like, "Let's do some PR. That seems like a good idea." Now I look back on it and it's been instrumental. When candidates Google us, they find a lot of stuff about Mentorloop that's in established quality publications. They're like, "Are these girls are legit?" And you know I think it's been really a game changer for how we can attract and hire talented staff.
Lucy Lloyd: Now we've got a bit of a team. We're kind of 10 people, so now we can attract and hire talented staff because we've got talented awesome staff solving a problem together. But back then, the PR was a really big help for us.
Kris: So you've raised more than a million now. Are you done raising?
Lucy Lloyd: This is a hard one because you get on this hamster wheel of raising and your early investors expect you to continue to raise, as well to continue to fuel your growth. I think we will raise again, but our next raise will be different in the sense that it will purely be for growth and not for proving the concept. And by that I mean, we've always raised for growth, but we've raised to catch up to that growth, whereas the next raise will be about getting in front of the growth, if that makes sense, that kind of distinction.
Lucy Lloyd: I think we're so much more certain now about what we're doing, and the fact that we can sell this repeatedly, and that we can recognise patterns, and that we can use those patterns to build a better product. It's a totally different conversation now.
Kris: Mentorloop now has a team of 12 people… they actually hired someone on the day of our interview… it’s a growing company that is still figuring out some of the challenges with international expansion. But they do have a number of clients overseas and so they’ve dedicated someone in their team to focus on the UK Market.
Lucy Lloyd: It was really interesting. They just kept over indexing on our inbound inquiries. The way we attract customers is we basically run an inbound machine, is what we call it. It's essentially like a content and search strategy that allows people to find us at the perfect point at which they want to purchase a mentoring software platform, essentially. And so we then take those leads, we demo them and we move them through our funnel.
Lucy Lloyd: We had historically concentrated a lot of our efforts on Australia and the US, thinking that the US was the natural big market for us. We just kept getting this consistent 15% to 20% of our leads each month were coming from the UK, with us spending no time on the UK, and no money in the UK. We just were like, "What's happening here?" Then we started to close deals over there, and much bigger and more impressive deals than we were closing even in Australia. They were over indexing in our client base, so we're over indexing in our early prospects. Then as we started to get to know our clients over there they were expanding more quickly as well.
Lucy Lloyd: And so it’s just, there's just some market conditions that mean that mentoring is really popular, really hot for right in the UK. I think there's a lot of competition for talent over there that we just don't have any conception of here. And so companies are putting their people first in a really compelling way and mentoring is a cool part of how they're doing that.
Lucy Lloyd: In the UK, we work with the BBC, Just Eat, Sky. It's some big media companies. They're pretty awesome brands that we've even managed to sell from just being a 10-person shop based in Melbourne, Australia. Those signals point to it being a really fertile market for us.
Kris: Have you noticed any interesting trends now that you're a couple years in, you've got all these clients that are facilitating these mentor relationships. Are you noticing any trends in the types of people that are trying to be mentors or gaps in the market?
Lucy Lloyd: One of the consistent trends is that mentoring is more popular than people realise, and so our clients come to us and they say something like, "Oh, we're gonna put it out to this group. We reckon 80 people will be interested." Then they put the call to action out and they get 300 people signing up. This is this grassroots demand for mentoring at the individual level that companies don't have any conception of, and so that's something that we can obviously play to and is in our favour.
Lucy Lloyd: Otherwise, I think there's this trend now of companies moving their HR function beyond just process to actual making life better for their people. And the companies that do this are the ones who are winning the war for talent, and the ones who are going to win in the next couple of decades, in terms of they're going to be the ones who quash their competitors. And they're the ones that have mentoring. They're either building mentoring into their culture or it already exists as part of their culture.
Lucy Lloyd: So I guess one of the side effects of working in mentoring that we didn't realise when we started was we're always working with really awesome people, because they're the types who believe in the power of people to change each others' lives. And so they're always just nice to work with, essentially. We don't work with any dickheads.
Kris: In the past few years there’s been a big push for men to mentor more women into senior leadership positions. It’s part of a movement called MentorHer, championed by Sherryl Sandberg the Chief Operating Officer at Facebook… and if you look at the data, it’s vital that organisations think about the opportunities they create, and the culture that they’re building internally, because the problems with diversity often start from the top. In 2018 there was just 24 women leading Fortune 500 companies, a number which was down 25% on 2017. There’s a clear need to surface more women to the top of large organisations, and one of the ways companies can do this is by providing mentorship opportunities that actually encourage growth and development into those senior leadership roles.
Lucy Lloyd: A lot of our clients come to us because they want to solve a diversity/inclusion issue. It's not always about women, but often it is. I guess we have an expression we use internally, which is, "You don't want to create special programmes for special people." By that we mean we don't want to stream people off. Instead, you want to cross-pollinate.
Lucy Lloyd: And so as well as having senior men mentor junior women, you actually want senior women mentoring junior men as well, because that's how you actually create generational change, by having the women in the position of power so you're not kind of reinforcing the same stereotypes again and again.
Lucy Lloyd: We also, I guess with the way Mentorloop is built, it's about making the unobvious connections more obvious as well, because historically in mentoring, it happens from a beautiful place. It's someone senior recognises something of themselves, and someone junior takes them under their wing, but it means that like is always mentoring like, and you're getting these same advocacy pathways being trodden, where essential white dudes are getting the fast track. So mentoring is a great way to break this down.
Lucy Lloyd: I think the Mentor Her movement is a beautiful movement. It's for men and women to commit to mentoring more younger women coming up the rungs. But when I look at this problem of diversity in tech that people are talking about, I think the problem is with the definition of tech. I think that women are in droves, they are owning… this social influencer market, but it's just because they're not engineers, they're excluded from the definition.
Lucy Lloyd: And so there's a phrase we hear a lot, well we used to hear a lot when we were swimming in accelerator circles, which was “are they non-tech founders?” - it's like, "Yeah, but we're marketing founders," or, "We're sales founders." It's not that we're non-tech founders. We're founders who can sell.
Lucy Lloyd: I think that it's just about we are all in the tech industry, it's just that some of us are in reputation management, while some of us are in branding. They're the jobs that the women are doing, and they're doing them really well.
Kris: I want to stop for a minute because Lucy’s point on non-technical founders is really important. When you’re building any company it’s vital to have the right experience at the top. The truth is not every developer is that great at selling their products, leading staff, or managing finances… and without those elements it’s unlikely you’ll have a successful business. There are many examples of successful startups who have thrived despite not having a so-called technical founder. And Lucy says having non-coders leading a company can be critical, especially once you start to scale.
Lucy Lloyd: Actually when development is more expensive to you, you take better care of it, you're developing the right stuff. That's been our experience. But… I think that the tech stuff, even when you're a technical founder, you're only coding for a year. If you're building a big company, you're managing people before that first year is gone. It's at a premium for a very short amount of time.
Kris: In a bigger business, do you think that people are somewhat undervalued, and the development opportunities are undervalued?
Lucy Lloyd: Yeah. I just hate the expression human resources. It just points to this kind of accounting, this people by numbers. It's just a terrible expression, human resources. I hate it. It's just so mechanical. I think businesses, when they get to that big… the larger they get, the more they do treat people as resources and refer to them as resources. It's just the wrong way to think about it. And so even just that very terminology has these knock-on effects of how a workforce is viewed and how their development opportunities are crafted. It means that most of the time, people are left on the sidelines. A certain cream of the crop is selected for fast track, and these same, as we were talking about earlier, these advocacy pathways are repeated again and again, and people are disengaged.
Lucy Lloyd: The companies that are gonna win are the ones that build the people first culture, and the people first cultures means giving everyone opportunities. If you think about big companies who want to, let's say they just want to beat their competitor at some metric, if they are focusing on their kind of 5% of their winners, their higher potentials, they're focusing on this group that are already optimising for their own development. If they turn their attention to the other 95% of the people who work with them and just lift them up a little bit, then they're moving the needle by a lot more, basically.
Kris: Do you spend much time thinking about what your company is going to look like when you are 100 people or 200 people?
Lucy Lloyd: Kind of. It sometimes can seem pretty academic, considering what we've got to solve today, in this week. I think that's a bit of a challenge for us as a business, moving beyond today and this week because we have been so executional and so in the weeds for so long, we can see the big picture, like the long-term big picture, but the mid-term stuff eludes us a little bit, so we need to get better at those 12-month plans. At the moment we're still pretty much quarterly plans. We're just is like, "What do we need to do now to stay alive?" And yeah, we need to get better at that mid-range strategizing basically.
Kris: The reason I ask that is because a lot of the founders that we talk with are quite advanced, and so they're at this stage where they can look back and go, "Oh yeah, like the first 10 or 20 people, that set up the entire culture of the company." I wonder, like, how you think about culture in your company now and the way that that might influence the way your company grows?
Lucy Lloyd: I think the best way to sum it up is it's strong opinions held lightly. So we do these cultural sessions with our existing team... we think about those culture values that we're like, "Yeah, we really believe in this." But then with the slightest shift in how we're focusing, we're happy to take another look at them. It's strong opinions held lightly is how we're looking at our culture.
Lucy Lloyd: So it's not something that's set in stone at this point because we are only 12 people, and it's still revealing itself to us. We know that it's there, but it's just revealing itself to us over time. We want to give people a framework to operate in, in terms of what we believe, like the things that we hold true, but we also want to be as open as possible, like as flexible as possible for that to grow as we grow.
Kris: What are the values that you tell to your staff?
Lucy Lloyd: One of them is we take a position and we back ourselves. That alludes to the data-driven stuff I was talking about earlier. We don't necessarily always wait for data to take a position, and so even if we don't have the data, we make sure that we're all behind it so we back ourselves. One of them is “done then fun”. Basically we work hard and then we do like to have fun together.
Lucy Lloyd: This is a funny. It's balls to the wall. It sounds like we're referring to testicles, but we're not, so bear with me. Balls to the wall is an aviation expression. It refers to the ball at the top of the joystick, and so when you're going full throttle, that's balls to the wall. We do use this expression balls to the wall. It's when we're feeling strongly about something, we're like, "Well let's really test it out. Let's go balls to the wall on that." We do that in our work and our play. It's always balls to the wall. Yeah, that's one of our values.
Lucy Lloyd: I'm really sorry you asked that question, because it's a very internal value that we have to induct people into 'cause it sounds so terrible, but actually it's just about giving it our all.
Kris: That's great. That's great. Okay, so you're giving it your all. When you look at what you've created already, how do you feel?
Lucy Lloyd: Yeah, good. Amazing. I think one that's been really wonderful for us this year is going into the UK market. So Heidi and I did a big roadshow for three weeks, just in Feb, so just a few weeks ago. And we felt like founders again. I think we had gotten a bit comfortable with the way our business was going and how we were growing. And so in the UK, we're wedging our feet into doorways, we're hustling, we're getting that meeting, we're making pests of ourselves a little bit. It felt really wonderful, but it also made us realise how far we had come here with our business.
Lucy Lloyd: We are still really, really early stage, but we haven't stopped having fun. And now we've got more people to have with because the team is, it will be 12 shortly. That's how we feel. I think it's overwhelmingly just this sense of fun. Nothing's more fun than what we're doing day to day.
Kris: Thanks to Lucy for taking the time to speak with me for this story.