AB Andrew Bassat
AL Andrew Leigh
AB You try to rely less on lacking business strategies. So, you really try to position yourself so that you’re… And you need to take risks, but the risk you take in poker, there’s a 66% chance you’ll lose the hand and be out of the tournament, you never want to take in business.
AL My name’s Andrew Leigh, and welcome to The Good Life, a politics free podcast about living a happy, healthy, and ethical life. In this podcast, we seek out wise men and women who have lessons to teach us about living life to the full, with humour, pleasure, meaning and love. We chat with musicians and athletes, CEOs, and carers, about making the most of this one precious life. If you like this podcast, please take a moment to tell your friends or rate us on Apple Podcasts. Now, sit back and enjoy the conversation.
Two decades ago, Andrew Bassat’s younger brother, Paul, was trying to buy a house in Melbourne. Trawling through newspapers, they began to wonder if maybe there was a smarter way in organising real estate listings. As the two corporate lawyers drew up a business plan, they quickly realised that if the internet was to truly transform a sector, it was more likely to be employment than real estate. And so, SEEK was born.
Today, SEEK is one of Australia’s most successful companies. It operates in 18 countries, lists over 4 million jobs. Each month, over 400 million people visit its site. The company is worth over 6 billion dollars. Andrew is its CEO. Now, what strikes you about him is he’s delightfully lowkey. Named EY’s Entrepreneur of the Year a few years ago. He lacks swagger, dresses casually and seems to relish working in a workplace where the signature colour is hot pink and arcade games adorn the foyer. Andrew, welcome to the podcast.
AB Thank you.
AL Now, when you and Paul started SEEK, you were a lawyer. But you did have a background in computer science and management.
AB Actually, Paul was a lawyer. I had been a lawyer, but I was a management consultant at the time.
AL There you go. Okay.
AB And I had a weak, very poor computer science degree as part of my background. That wasn’t much help.
AL Had you thought for a long time about starting a business?
AB Look, I was doing my own thing. I was not much an employee. And then Paul had been actually looking for a house, so we were excited about the idea of having a crack at something. At the time, we weren’t really internet users. We hadn’t really run our own businesses or been involved in direct businesses. So, it was a bit of a stretch, but we thought we’d have a crack at it.
AL So, you had used the internet, but…
AB I hadn’t… I just started to use the internet to do the business plan, so…
AL I love it. That’s great.
AB I really was finding out about the internet for that reason. So, I’d never used it before. It was the early days.
AL And at what point in that preparation did you segue from thinking this is going to be a real estate business to thinking this is going to be an employment business?
AB Quite quickly. I think the original business plan was real estate, cars and employment. And then I think we just decided employment was a bigger category. We thought it was more amenable to our mind. We liked the idea of helping people with jobs more than cars or real estate, not this… They’re perfectly good industries. We just liked the idea of jobs first, so we quite quickly went from being real estate first to employment first. I think it was real estate second, cars third. We got busy so we never got to them.
AL So, there’s a business plan somewhere which has seen…
AB All three.
AL Going into all three.
AB All three, but because on other measures we did better than the business plan, the shareholders have never really given us a hard time over that.
AL Did you worry about the fact that you were going from a stable pay cheque into being an entrepreneur?
AB Look, we didn’t… Not too much. The worst case… We had very supportive wives and the worst-case scenario for us, to some extent, was that we could go back to being a lawyer and being a management consultant. My employer warned me that I’d go backwards in my career, but they’d take me back. That’d probably set me back a few years. It didn’t really feel like it was an existential risk and probably, to be honest, entrepreneurs don’t really think that way. They think of the opportunity rather than worrying about the challenges or the things that could go wrong.
AL Where does the entrepreneurial drive come from? Do you have parents who are entrepreneurs or?
AB Look, it’s… I do suspect, because of the risk aversion aspect to it, entrepreneurs tend not to be particularly risk averse. I think somebody’s being made rather than... They’re born rather than made, to some extent, is my suspicion, but I think we always felt that we had a crack at being successful. The challenge for us, there were a hundred competitors and we had to win. So, it’s the winner’s actual game. So, we knew going into it there was a serious chance of failure, but it just didn’t bother us as much as it might have bothered other people.
AL Why do you think you were able to take on these huge established empires? I mean, Fairfax and News Corp are looking ropy now, but if you go back to the 1990s, these are massive, long-standing Australian companies. What gave you the spot to think you can take them on?
AB Yes, it’s a good question. I think we kept asking ourselves in the business plan what were they going to do about the internet, how they deal with the challenge. I probably put myself in the role of the challenger. So, what are these guys going to do as a result of the internet coming through? And I found it very hard to find stronger strategies for them in a world where, for us, we could come to work every day saying we’re going to use the technology to make life better for job seekers, make life better for hirers, build a better marketplace.
Fairfax and News had to come to work every day saying, how do we stop the technology from taking away our beautiful rivers of gold? It’s a very different set of problems and it’s very hard to come up with strategies to deal with that sensibly, even though everyone knows if you don’t cannibalise yourself, someone else will. It’s hard to actually pull the trigger, if that makes sense.
AL Yes. I just have to segue for a moment. I assume you’re a regular news consumer. Do you ever feel slightly guilty…
AB Yes. I do. All the…
AL About the fact that you always undermine these traditional, democratic institution in newspapers?
AB No, all the time. And if you look at the political debate now in the news, it’s all… There’s no doubt that… More than just us, and I think if it hadn’t been us, it would’ve been someone else. I don’t feel too guilty, though, if I’m going to digress a bit, I was a little bit the victim of some bad journalism not too long ago. And when I complained about it, somebody said to me, if anyone deserves to cut the bad journalism as a result, it’s you. And I said, fair call, that’s okay.
But it does trouble me that the money that was… When we did our original business plan, more than 100% of the profits came from classifieds. So, I’ve just cleared the ones classified time to go. The news perhaps would be in a lot of trouble, and it does trouble me.
AL But, I guess, as you say, you look around the world and this is happening in markets where SEEK doesn’t have a presence.
AB If it wasn’t us, it would’ve been someone else, yes.
AL And so, in those early days, you’ve got this classic challenge of an internet start-up where you have to grow fast, which means that you’re not making very much money, but you’re spending an awful lot. How do you deal with the psychology of that? Of basically burning through piles of cash as you try to build up a userbase and not turning a profit, which would be anathema for most traditional businesses?
AB Yes. Because I was… Things run… By the way, there was a third partner, Matthew Rockman, who joined us at the start, but the one thing that we all three agreed on and we got right was we recognised that it was a winner takes all game. We recognised that eventually Fairfax and News Corp would get it right and be super aggressive. There was already people like Monster, the US giant, was already in Australia when we launched, and a bunch of other competitors.
So, I think we realised if we were going to win, we had to get big. We had to be the first crack in the marketplace. We recognised that we had to build the marketplace first and then worry about making money second. So, all of our strategies aligned with that. Part of that was a recognition that we needed to lose a lot of money before we’d make money.
And we were fortunate. We were making enough progress on the metrics that we were telling our shareholders to focus on, which were the job ad, the job seeker, the applications, those underlined marketplace metrics. That they were okay to continue funding us until I think about five years and 25 millions of losses before we started making money. And we were fortunate the shareholders support that. So, we knew that that would be the case, if that makes sense.
AL It all sounds so easy looking backwards. And here you have this very phlegmatic approach to talking about it, but they had that…
AB No. It was easy.
AL But the dotcom crash comes along just the year after you launch, right? You launched in 1998, and then the tech wrecks there a year or two…
AB Yes. We had a few challenges. It certainly wasn’t easy, but one was the tech wreck… It was a bit later.
AL No, you’re right. Sorry. It’s early 2000s.
AB Yes. And that was a bit of a challenging period for us because it did change things a lot, but the thing for us is we’re always focused. We never… We were very close. I think when the tech wreck happened, within weeks of that happening, the day when Naztech first fell, we had an IPO prospectus ready to sign.
And we said we better hold off and then it held off an IPO, which is a lucky thing. Lucky we weren’t out. But we were always focused on the fundamentals of the business, which was helping people find jobs, helping organisations find people. And after the tech wreck, that was still happening. And the challenge would have been finding capital at a decent valuation, but we were fortunate the round of capital rate before the tech wreck got us through the profitability.
So, the timing was such that the impact was a lot less than it might have been. It wasn’t fun though. I won’t pretend it was fun.
AL Absolutely. Did you… Had you handled the stress of that okay? Did you…
AB We’re okay with stress. It makes sense. So, it’s… We had the GFC hit and it’s kind of funny because when the GFC hit us, our share price went from about $9 to about $2, but it was paid [?] that off. We knew at some point the market would crash. We actually had some work that we’d done, it’s when the market crashes, this is what we should do, and dig it out of the hole and do it.
It sounds strange, but because I worried about it, and then, when it happened, we were still making money, not as was much money, but we were still around. We fought strong. We thought that actually we’d still invest and go forward when everyone else was panicking. It actually didn’t stress us out too much because this is… Worrying about it happening, wasn’t as bad as the actuality. So, my stress levels, if anything, didn’t really get up in those periods, if it makes sense.
AL And that was because you had done the preparatory work…
AL To thinking about what the risks look like?
AB It just wasn’t as bad as it might’ve been. So, for us, we still made money through the GFC, for example. We were still getting the metrics, we were still driving the metrics during the dotcom crash. The dotcom crash did have some stress because we were getting pressure to lay off staff. And one of the things I’m proud of that Paul, Matt and I, again, were all agreed on was… We were getting pressure from the board and from others to lay off staff because really it was touch and go whether we’d get to profitability.
One of the things we really didn’t want to do was go down that path, even though most dotcom companies were aggressively doing it. Because we knew that our culture, our people, really the key competitive advantage that we had, and once you start randomly laying off staff just to get costs through or something similar, it’s hard to be able to get culture back.
So, there was a degree of tenseness around the fact that it was touch and go to get to profitability, but beyond that, I think we just always knew the fundamentals were working. We always saw the underlying things that we were focused on, heading in the right direction. And so, the noise around us tended not to bother us as much as it might have.
AL You seem to have quite a positive workplace culture and in the lift, I saw you’ve got ads for Hacknine, your internal ideas competition. A lot of profiles have talked about the way in which you try and encourage ideas to emerge from employees. How has that come about? Has that been a conscious decision of Matt and Paul and yourself in the outset or it’s just something that’s sort of developed?
AB There’re two different things. One is, I think the people piece was always with us, so the fact that people are important. And we sat down however many years ago. Paul and I and Matt had a lot passion, not many skills, so we knew we’d be relying on other of people. And also, we were competing with Fairfax, News, and Monster, as I said before, and those guys had all the job seekers, all the hirers, all the money. So, really, if we were going to beat them, the only thing we could beat them on is our people being more passionate, more committed, more talented than theirs.
And so, I think we’ve always realised that having good people, creating an environment where people wanted to come to work, were empowered, were positioned to do their best was the only way we could be successful. So, the culture piece was there from day one, we all agreed. Probably the innovation piece you pick up. It’s only been in the last five or six years because, going back the last 20 years, I think we’ve always been entrepreneurial. We only really figured out how be innovative in the last six or seven years, out of necessity as much as out of option.
AL So, what are your approaches to innovation?
AB There are a few things. The starting point of what really changed for us going back six or seven years, we’d beaten the newspapers. We were flying along, the shared price was very nice, we were doing well in international and educational markets, but all of a sudden we woke up and realised Indeed and LinkedIn, which were both very large US companies. LinkedIn now won’t buy. Microsoft, obviously, were not only challenges in Australia, but has stolen a match in a lot of areas.
We also realised the key bologram with those guys were going to be areas like product and tech and data, and a range of things. And those guys had teams that were 20 times the size of ours and much more capable. And so, we… Not panicked, but we realised we needed to change everything about what we did.
There were three or four concepts I could spend an hour talking about, so I’ll try to cut myself short, but the first thing we did was measure placements, which is how many people were responsible for placement in companies. And we were about 25% and the next best was 2.5%. But the insight we got out of it was there was 75% of people that were not placed by us.
So, the urgency and the drive for innovation which we needed to stay in front of our competitors, but also, we wanted to meet the needs of those 75% of people that we weren’t meeting the needs of. And that led to a lot of drive around what we needed to do better in product and technology and data, etc.
AL 25% though. I mean, the typical Australian has probably been placed into a job by SEEK.
AB Yes. Well, no. I mean, we’re in a good spot. It’s now 33%. As I said, the next best is now about 4%, but we still have this argument that we can do more. And so, we talk about Nirvana, which is being responsible for 100% of placements in the country. We’ll never get there, but don’t tell the staff because they are all working out of their ways, what we need to do better and to start moving towards that 100%.
AL How much autonomy do they have to work on individual projects or to explore new ideas?
AB It’s a bit of both. So, there’s a fair bit of stuff and things like the Hackathon are really great. So, out of the Hackathon comes actually projects that we ship… There’s a shipping award every year that the guys are taking off their other work, and they just work on their project to deliver. And there’s a bunch of stuff that’s happened like that.
A fair bit of strategy is top-down, as we all know, but there’s so much stuff that we could be doing, so many different ways we could go in terms of the marketplace we’re in now. Particularly now that we’ve talked about a broader human capital management market that, unless we have a degree of top-down prioritisation and strategy, it becomes chaos. So, there’s an element of both.
AL Day or week working on your own project, so I assume, works for Google, but you haven’t found something that structured works for you. Well, the approach of having allocated time to work on your own projects.
AB Look, we don’t do anything on a regular basis beyond the Hackathons. Beyond that, people are allocated projects that… There’s an element of choice in what they want to work in in the areas, but it tends to be more top-down projects rather than this idea that a day a week or two days a week people are on their own projects. We don’t do that. And, as I said, it’s such an unstructured world. There’s so much… I think a big part of our strength has been correctly choosing where to play and how to play. That tends to need to be done a bit top-down.
AL And tell me about how SEEK Learning fits into your vision as to managing people…
AB Yes. I’d like to sound like strategic genius. Originally, it was a little bit accidental, we just recognised. And just education in general has been a wonderful area for us because our purpose has always been to help people with their careers. And at one point in time, that may be finding another job, but for many people, the best way to take their career forward is to have a career of latent education. Whether that be a three-year degree or a shorter course.
And so, our role in there is one that we’re very proud of, but it was a little bit accidental. We just realised people knocking at our door. Education providers knocking at our door, looking for an audience. I set up an area for the site with another guy that we could barely find, it was so buried. And, all of a sudden, we were driving quite nice volumes too, as education providers. [Unclear] led to SEEK Learning.
And SEEK Learning was very successful before the Government changed its mind on some things and has led to a lot of other things in education that we’re continuing with. So, we’ve helped hundreds and thousands of students who actually got a better return to education financially than we have in employment. So, we’re very committed to education.
AL Where do you think online education is going to go in the next couple of decades?
AB Yes. It’s not so much online education. I think one of the things we wanted to play a role in where we see SEEK helping a lot. And, to be honest, we’re committed to this, even though we haven’t figured out how we can make any money from it, whether we can it or… It’s just such an uncertain world with so much change in terms of jobs disappearing over here and being gained over here. The skills you need are not clear with everyone what skills you need to make yourself employable in the future.
Even once you decide what skills are appropriate for you and what you need, finding out where to get the education is very mixed in terms whether you’re going to get quality or poor quality. We think we’ve got a very large role to play in helping guide people through that.
So, one of the services we’re offering, again, we’re not planning to charge for this, is to both put a lot of online resources to help people navigate through that, but also have people on the phone to speak to. They aren’t salespeople, they will get no commission, but will give you advice in terms of where your career might go, and I think there’s a massive need for that in the community.
AL Are there broad pieces of advice that you’d offer to somebody leaving school?
AB I’ve got two kids. I’ve got an 18-year-old son. I’ve got four kids, but two kids about to leave school. One’s in Year 12, one in Year 11. They’ve made their own choice around doing something around science or engineering, something around recognising the world’s changing. And the more they can understand the new areas that are opening up, the more employable they’d be. I think that’s a sensible position they’ve taken.
It’s not that there’s not room for more accountants, more lawyers and more all sorts of things, but I think if you understand the future, you’ve got more chance than if you are fighting the past.
AL And, in terms of when you’re acting as an employer rather than placing people, what do you looking for in a new hire?
AB A lot goes around that. It’s less the skills. Those skills are important, and it’s probably become more important now that we’ve got a little bit more choice, that we get skills as well as the right sort of people, but a lot of it’s the right sort of people. And we’ve honed in on a few attributes that we focus on and care a lot about in terms of they’re the ones that have shown success in the past at SEEK. I wanted one attribute originally, which is passion. That people are really passionate about what we’re try to achieve, our purpose around just taking SEEK forward.
But that didn’t work. So, we needed to also add a few others like judgement decision-making was one. There’s also something around the craft skills. And obviously for leadership. There’s something around leadership skills. But it’s really getting the right sort of people and you can kind of fill the gaps in their skills. You can’t necessarily turn the wrong sort of people into the right sort of people.
AL Do you use interviews? Do you use tests? What do you find is the best way of learning about these particular qualities that you’re seeking?
AB Yes, it’s a good question. We don’t… I don’t do a lot of recruiting directly, so you’ve asked the wrong person. My team has been very stable for a long time. But I think it’s a bit of everything. But a lot does… You do need the interviews, you do need to meet the people, you do need to understand what drives them. So, you can look at their CV and say they’ve done this and this and it looks great, or it looks like a good fit. But understanding the people and their drives and where they’ll fit really is important. So, the people element you can never do without.
AL And you’ve talked previously about being productively paranoid about being aware of what competitors might do. Where do you see that next set of disruption coming from, and also, psychologically, how do you maintain the balance between being productively paranoid without being just straight out paranoid?
AB Yes. The productively… It’s a very good question you’re asking. You’ve done your research very well, which I appreciate, and you’ve asked me very big questions. I’m trying not to talk too much, but you’re making it hard. And we originally wanted to put in there… One of our values and one of our beliefs is around paranoia without productive in there and one of our directors pointed out quite right that paranoia is a mental illness, and it tends to lead to bad outcomes, not good outcomes.
And we couldn’t find a better word which fits with productively paranoid around something else. We did have a period, I told you before, leading up to 2011. Probably a couple of years. We should’ve seen the signs with people like LinkedIn and Indeed and we didn’t. We were so happy with how we were going, we definitely got a bit complacent. So, I think the message now is there’s always going to be competitors and, in terms of where the next [unclear] instructions coming from, it’s not difficult for us to see.
We’ve not only got LinkedIn and Indeed that are very powerful globally. LinkedIn are now owned by Microsoft. Google’s just entered jobs. Facebook’s just entered jobs. Who knows how long before someone like Amazon enters jobs?
So, really, it’s such a big category and it’s so important to people that I think our assumption is the biggest and the best will be in there. So unless we’re really not only ahead but moving very fast and always evolving our business, we’re going to be in trouble.
The truth is most Australian companies face the same threats. I just don’t think too many have figured it out and we’ve got the advantage of knowing that if we don’t move really fast, we won’t be globally competitive. We talk about the fact that we must be the best in the world at what we do, and the logic is very simple. If we’re not best in the world at what we do, that means somebody’s better than us. And if somebody’s better than us, they’re going to beat us. And I think that logic probably applies to most industries. I’d like to see more people expressing that logic and pushing that direction.
AL Now, one of your great successes, of course, is now drawing a majority of your revenues from overseas. Not something that most big Australian companies can boast of. I understand you’ve moved into those overseas markets initially by taking minority stakes in other companies and then growing them into majority stakes. Have you found that that’s been an effective strategy for approaching markets?
AB You’re going to put the journalists out of business very quickly. You’ve done your research very well. That’s how we’d be [unclear]. It’s been… We originally thought about the idea. We started looking internationally at about 2001 and then, because we had no money, and they didn’t really just need our brains, it didn’t really work very well. But we went back in about 2005, 2006, but then we’d figured out that going to a market like China ourselves, as SEEK, was going to be unsuccessful. There are plenty of smart Chinas doing a great job there.
So, the starting point was always we can actually help a good company and a good team get better rather than the fact that we could beat those good teams in a foreign market. I think that logic was a little bit more a humble approach to going overseas. It has really been the right approach for our business. So, it’s hard to compete organically anyway with these businesses, but with the lack of local knowledge, going up against local owners would be harder again, if not impossible.
And I think most people have found that, so that did lead to our approach of starting with minorities, moving to majorities over time. But working with local teams and backing them and helping them, rather than trying to assume we can compete ourselves. And that’s worked very well for us.
AL Has it given you a sense as to what makes an Australian management style unique?
AB Yes. I think probably for us, Australian companies do have an advantage in Asia around the fact that they’re moving in to prioritise, whereas American companies tend to think of Europe first and Asia second, is the set of expansion. But also, perhaps a little bit more humble approach and more understand that Asia is not one country. It’s a series of countries with very different markets. The people are different, the cultures are different, and you need to be a little bit more slow, a little bit more sensitive.
You need to not assume that everything’s going to be the same, and the strategies or approach you’ve had in Australia is going to necessarily work over there. And there’s just the experience that a lot of Australians have worked in Asia, had some success that gives you a management pool to draw from. So, there are some advantages Australian companies have in Asia. I don’t think we’re exploiting this as aggressively as we should be right now, and I don’t think the window will be open forever.
AL Do you enjoy the overseas work?
AB Yes. I don’t enjoy the travel. I mean, no one enjoys travel, right? But…
AL With four kids.
AB And if I was going to be completely selfish, I might have chosen France and Fiji or other markets rather than the ones we’re in. But, oh, it’s exciting for us. When we talk about helping people without purpose, part of the attraction to China is all of a sudden, there’s billions of people who can help rather than tens of millions of people.
And the fact that we’ve actually taken a business, had a really… It's taken us 12 years, but the fact that we’ve taken on the challenge in China, we’ve probably had five years of every shareholder telling us to back out of there and we were being punished for being there rather than being rewarded for being there. And the fact that we’ve persevered in markets like China and had success now has obviously… Gives us all a sense of achievement.
AL Do you have tips or tricks for staying sane when you’re on the road?
AB No, I don’t really. If you speak to anyone who travels with me, I don’t really stay sane when I’m on the road. So, I’m the wrong person to ask. I’m the most impatient person in the world, but I’m a particularly bad traveller. You’re asking the wrong person, I’m sorry.
AL What makes you a bad traveller?
AB I just get very… It doesn’t take much to get me frustrated or impatient or accuse me of being slow. Or my guy is a bit slower than the next guy in terms of processing Visas, all those things. I’m not a very good traveller, I’m sorry. I’ve gone into too much detail. I probably shouldn’t have admitted any of this, but if I’d said the opposite, anyone who’s travelled with me would’ve called you up and contradicted me, so.
AL Now, one of the things that really impresses me about you is your skills at the poker table. You are a seriously good poker player. What is it that poker teaches you about being able to be a good manager?
AB Oh my goodness. I enjoy poker. You really have done your research. It’s a bit a business strategy, but in a shorter form. So, really, there’s definitely luck involved, which lets me sit down with some good players and have a chance that I’ll beat them, even though I probably won’t. I feel I’ve got a chance. There’s enough luck involved.
But there really is a lot of skill, a lot of thinking. And usually when you’ve done well or you’ve done badly in a tournament, it’s because you’ve played well or you’ve played badly. And it’s just, the thought process is fantastic, trying to think about what you’ve got, trying to think about what they’ve got, trying to think about just everything. There’re so many variables in a game of poker that getting it right feels good, getting it wrong feels like it’s something to learn from.
AL Do you manage differently the week after you’ve played a big tournament than the week before? Does it give you a…
AL A sense of calmness or…?
AB I’ve got a job and maybe a shareholder or two listening. I play by the tournament a year because… I just don’t have the time to play anymore. So, probably when I do leave this job, I will play at a few more tournaments, but… I play one or two tournaments a year and if I played more, I don’t know if I’d feel the same. It’s exciting for me because I do it so rarely and it probably lets me concentrate for the few days the tournament takes because I do it so rarely. I think if I was playing more regularly, it might be more of a grind, if that makes sense.
AL But it’s not that dissimilar from business, right? I mean, there’s that…
AB It’s very similar.
AL Lovely line from Phil Hellmuth that if it was a pure game of skill, I’d win every time.
AL And that element of luck, as you say, comes into the prospects for SEEK in the future. You just never know who’s going to enter the market and how they’re going to disrupt you.
AB I think that’s right, but you should play poker as well, by the way, do you, or?
AB Aren’t interested?
AL I have an interest in it, but I don’t play.
AB Okay. No. I can teach you, but the… Maybe not. But the strategy is similar. You try to rely less on lacking business strategy, so you really try to position yourself so that you’re… And you need to take risks. But the risk you take in poker, which is there’s a 66% chance you’re going to lose the hand and be out of the tournament, you never want to take in business.
But I think there was similarities to the thought process that, really, the more… Usually, when you make mistakes in either, you look back and say, really, there’s an error I should’ve thought of more deeply, and in hindsight, had I thought more fully or had I done a better job of strategising, I might not have made that mistake. That probably happens. You’ve got more that you can control in business than you can in poker. And so, therefore, that deep strategising that thought becomes more important.
AL Right. Yes, I’ve argued elsewhere that, to me, people see politics as being a game of chess whereas politics has much more in common with poker than chess. Yes.
AB Maybe because there’s definitely some luck involved in timing. And the advantage we get is we can… Shareholders don’t always love it, but we can measure things over a few years’ time period. So, for China, if we’d measured in anything less that an eight-year time period, we would’ve seemed to be failures. Politicians don’t get that luxury and most businesses don’t get that luxury.
So, the stuff that… Long-term optimisation, by definition, when you use the word optimise, you can optimise for the short-term and the long-term and most businesses operate on too short a timeframe and politicians are forced to it. So, I have a lot of sympathy for you. It could take a long-term approach that I think is what the country needs, but it’s very hard.
AL How do we encourage more of that in business? More of that long-term thinking?
AB I think to some extent… I’m lucky because I’m the founder. It gives you a bit of licence that you might not get as a new CEO. I’ve had a supportive board for the most part that allows us to take a long-term viewing. Periodically, we’ve had shareholders annoyed at us when we say we’re going to invest more. Usually, the response from shareholders is very negative that it’s created criticism, the shares price goes down, but we’ve been big enough to just wear it through and not care.
It’s harder for a new CEO, but I really think you need the board from the CEO to say, I’m going to do this. This is what’s right for the company. We’re going to frank up to shareholders and say, I know this is not what you want to hear this time, but this is what we’re doing, and this is why.
And you do find there are some good long-term supportive shareholders out there who will gravitate to you when you’re willing to stand up against the short-term guys. So, there’s people like Fidelity and Capital and a bunch of shareholders that have supported us for a long time, who really like the long-term messages and give us… At least there’s one man out of the ten doing the road show where they’re not beating me up. And that gives you a bit of confidence behind your strategy.
AL So, then potentially we need more investors who are thinking about that long-term…
AB Investors are very short-term and they’re in turn measured on a pretty short-term basis by their own investors. But when you think about the quarterly measurement of superfunds and the really high emphasis on short-term returns, and the fact that, on average, people’s money is buddy superfunds for 20 years, it’s pretty screwed.
It’s just wrong. And it really is hoping to lead companies down a path of being way too short-term focused. And, as a result, none of them… It’s unfair, CEOs are trying their best. It’s really hard to get a licence from your shareholders to take a five-year view.
And if you want to be globally competitive, if you want to deal with the fact that eventually people like Googles of the world or the Amazons, they will all be competitors. You have to invest if you want to grow overtime. If you want to give yourself the scale to be globally successful, you’ve got to go to markets like Asia or elsewhere to give yourself the scale to compete with the biggest and best. But people aren’t getting licenced for their shareholders at the moment to do that.
AL And one of the things people say makes Silicon Valley is that you’ve got a lot of entrepreneurs turned investors. People who are willing to put out capital, having gone through that experience themselves of hard times before things turn good.
AB They’ve got some massive advantage. They’ve got that, they’ve got the fact that there are so many shareholders who are used to that growth path and are willing to allow people to invest, recognise that actually you need to invest to grow. There’s not much joy in just returning dividends and cutting costs, which is where many Australian companies were in the cycle of doing. They’ve got things called founder share that I’d love to have, which basically lets the founders say piss off to the share market and if you don’t, they’ve got extra voting rights.
And shareholders can choose who they follow and founders were explicit about what they’re doing that if they’re investing long-term and everything else, shareholders can follow or not follow. But they can’t boot out the founder that’s pushing down that path. And a range of other advantages.
AL Yes. So, to wrap up, Andrew, what advice would you give to your teenage self?
AB My teenage self. Gee. This was irredeemable. I don’t know where I could start, but it’s worked out okay. More for other teenagers. I got a little bit lucky. I didn’t really know what I wanted to do until I probably got to about… Then when I started working at SEEK is when I started to really get passionate and committed. Before that, I kind of mucked around a bit, but I did keep my options open.
But really, it’s finding something you’re passionate about. So, the sooner you find something you’re passionate about, I think for everyone, that’s when you tend to do a good job. That’s when you enjoy yourself at work. Doing stuff that looks good on the CV or doing stuff because somebody else tells you that’s what you should be passionate about, never works as well.
AL What’s something you used to believe, but no longer do?
AB Gee. For example, you’re not talking about Father Christmas or the Easter Bunny or any of that stuff, right?
AL They are possible answers?
AB No. Probably the big change for me is when I started and a bunch of people I’ve worked with moved me down the path. I used to be much more pure logic and I had the strategy background. It was always about the intellect. I really learnt to trust instincts and how much both the people side and the instinctive side are as important, if not more important, as the logical side. That’s probably not so much directly answering your question, but that’s the closest I can get.
AL Where did you learn those skills on the people side?
AB Oh, on making plenty of mistakes. My partner, Matt Rockman, quite a few times he and I disagreed on candidates and, because he didn’t have a good explanation, the person I preferred, their CV looked better and more fit with what we needed. Because he didn’t necessarily articulate as logically as I might have why he didn’t like that candidate, I tended to just go with him, but I was wrong every time. And I started to learn that just the instincts that says this person’s not right, even if you can’t explain it, tend to always be right, if that makes sense.
And since then, every time my instincts have told me not to go with the person or not to go with the deal, I’ve just trusted those instincts. And I’ve rarely been wrong, once you’ve had that feeling that somebody or something’s not right, usually those instincts are pretty sound. Works in poker as well, by the way.
AL Interesting. When are you most happy?
AB Good question. When am I most happy? It’s sort of a relative concept, isn’t it? But it’s more… To be honest, I enjoy work, but more family and friends, of course. Spending relaxed time with family and friends, perhaps because I work hard, is the time when you’re most relaxed and happy, of course.
AL Are all four children still at home at the moment?
AB All still at home. One’s threatening at some point to go out, which we desperately don’t want, but yes. So, all four at home. He just finished exams last week, yes.
AL Congratulations to him or her. What’s the most important thing you do to stay physically and mentally healthy?
AB Exercise is important. I mean, I tell my family and friends it’s, obviously, important. Exercise has become a bit of an issue because I keep hurting myself. So, I had a shoulder operation three weeks ago on my left one and I’ve had hamstring injuries, but I tend to try to play a bit of soccer or touch rugby or something. When I’m not doing that, I’m not as fit, then it’s not as good. So, I’m a bit… I play for a month and then I injure myself and then I’m off for two months. So, I’ve got to probably find something a bit more age appropriate.
AL Maybe a non-contact sport perhaps?
AB Yes. Maybe. Or maybe play with people who are a bit older than 25 or something like that.
AL Do you have any guilty pleasures?
AB Not that I’d probably talk about, but I’m probably just eat and drinking moderately and badly and all the rest of it is my… I keep telling myself I should have a better diet and I should drink less, but both are too much fun.
AL And which person or experience has most shaped your view of living an ethical life?
AB It’s a tough question. I think you probably said it to get that far down list and so… My parents. I’m probably lucky to be brought up in the household where my parents just always did the right thing. And that was a very normal thing, they didn’t really punish us, but they always made it pretty clear when we’d gone down the wrong path.
And I do think a lot comes from the family in terms of that’s probably the thing we most try to teach our kids, is the… Although, they’ve figured out themselves pretty well the basic wrongs and rights. And if you learn that right when you’re young, it probably sticks with you.
AL Andrew Bassat, thank you for taking the time to speak on The Good Life podcast today.
AB Thank you.
AL Thanks for listening to this week’s episode of The Good Life. We love getting feedback. So, please leave us a rating or a comment on Apple Podcasts, formerly known as iTunes. Next week, I’ll be back with another inspiring guest to discuss living a happier, healthier and more ethical life.
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