Tim went from a music loving, software developer into the world of investment banking and beyond into cofounding the conversational AI company Ambit.
Tim gets somewhat candid in this interview about the struggles of managing cofounder relationships alongside having to lead an AI "chatbot" business through some incredibly challenging times.
You can connect with Tim on LinkedIn.
Coal Mine Rhythm - Short Version B by Dan Ayalon
Tim went from a music loving, software developer into the world of investment banking and beyond into cofounding the conversational AI company Ambit.
Tim gets somewhat candid in this interview about the struggles of managing cofounder relationships alongside having to lead an AI "chatbot" business through some incredibly challenging times.
You can connect with Tim on LinkedIn.
Coal Mine Rhythm - Short Version B by Dan Ayalon
My guest today is Tim Warren, the somewhat polymath, music loving software, developing X, investment Banker now in startups and the co-founder of Ambit. In this conversation we get into a whole bunch of things, including his early introduction into startups, why he left investment banking to pursue the startup career and the challenges of building a conversational AI. In the actual episode we do quite an introduction. So let's get to Tim now. Basically, tim, as we kick off this conversation, you're concerned about your hair and that's not something that I've actually, to be fair, it's not something I experience concerns over here. So, yeah, interesting, interesting, kick off to this conversation here as we, as we record this, tim, why don't actually know where to even start this conversation? Because I was looking, I was looking at your LinkedIn profile this morning and I'm gonna just read this, for for people they will have already heard the introduction to who you are, but the head of this. But look, these are some of the descriptions and you can see why. I just don't know which three to pull on here first. So we'll just see how this goes.
Speaker 1:You're a founder, multiple times founder. You're a futurist. You're a speaker. You're an authority on AI. You're a writer and commentator on, you know auto things, travel reviewer, etc. You've been an investment banker with companies like Goldman Sachs and JB, where you're an angel investor and I didn't actually realize this. You were a COO at book track. I know Paul Cameron, so super interesting. Where do we start with a guy like you? What, what are we gonna talk?
Speaker 2:about this morning. Well, I, it's funny, like you say all those things, and when they're all said together it sounds like a lot of very varied things, but I think that there is a common thread there, which is I I do things that are especially intellectually challenging, where I can work with smart people, and I have to enjoy things. And when I stop enjoying things, I tend to tend to stop doing them. And a funny thing is that, you know, I'm always contacted by people who either do or don't pick it up explicitly, but I seem to have got this ability to move from one area bed of business or whatever it might be one area to another, but because I'm not lead, I'm not.
Speaker 2:I'm not led by the search for money, but the search for it's the search itself really. So I mean, I don't tend to think in a very linear fashion, but one of the ways to do it might be to start at the kind of the beginning. And you know one of the things, if you hunt down far enough, I don't don't know if you got there I'm a musician, right, so that very much started for me when I remember as early as when I was, probably for my my neighbor, a guy called Waldo Granwell who's a very smart guy and engineer, lovely, lovely guy. He built and he'd half built an amazing house next door and in it in one of the rooms he had a drum kit and I used to sneak over there because he hadn't put the doors and windows and anything like that and I would sneak in there and play with the drum kit very badly. He had a drum kit, he had a pool table about how long.
Speaker 2:Do it at this point like four okay, right, yeah, really young, and and even if I'd been fat, I pretend it was naughty, but if I'd been found, he wouldn't have cared at all, because you know, we were very good friends and he recognized my interest in music at that age and he gave me my first instrument, which I, which I have, which is a triangle and people joke about her, it's kind of the joke instrument through the orchestra, but I turned that into a career. So by the time I was 16, I was playing professionally and you know, in restaurants and with a jazz band, and it started from that. After I had this triangle, he then lent me the drum kit and it went from there. I started buying my own, etc.
Speaker 2:So, yeah, that that's where I got this idea for passion, of doing something that you just really like and then everyone laughs, is it? There's a common thing here which is that when you start doing something, especially start playing the triangle, I mean, everyone laughs at you. Even you had a little snigger there, so I had a big snigger.
Speaker 1:I wasn't even a minor, because I actually imagined you being a triangle player as the professional you know, in a jazz band waiting for your moment that would be old now I've got.
Speaker 2:The ultimate example of both success and failure simultaneously would be when I went through all of the rehearsals with an orchestra and it turned out the program was too long. We had about seven pieces now I cut down to about four. Now the pieces that were cut out were the ones that I featured in and the only one that was left. I played triangle in and the only thing I did was play triangle on the last beat. So I went through all of the rehearsals and then I went to the. There was just the one performance and I missed playing my beat. So I've done the whole lot, I dressed up, I've gone along everything, and then I missed playing my one triangle beat and that kind of sums up. I mean, I just laughed at myself and I think that's an important thing. You got to be able to laugh at yourself life's a journey.
Speaker 2:I'm crying as I tell this, right, but yeah, totally, totally unrelated to, totally unrelated to business in a way, but I think what I did there is. I learned this thing where I could pretty happily ignore. You know now they call them haters or trolls, but there's always people around to tell you that this won't work or that won't work. And now I'm not saying I could have set my sights on being an all-black. I certainly could have. I don't, couldn't if I don't have the physique or an astronaut or whatever.
Speaker 2:Not everything's that's actually possible. But if one sets one's sights on something that one's actually physically capable of, you can do good things. Which is why it was just completely natural for me to go home from school at 16, take off my school uniform, pack my drums into the car and get dropped off to the Ramsey's restaurant in Newmarket, which is Judith Tabrons, I think, her first, her first restaurant. And then, you know, at at 16 we were. We were getting paid as jazz musicians as much as the chefs were in the kitchen. And I didn't know this. I wasn't doing it for the money, I would have done it for free, the money just happened. It's like success must ensue. You can't pursue it?
Speaker 1:yeah yeah, it's a great way putting it. So what? Obviously you're a 16 year old musician. Did you go off to university sort of straight after school? Is that what you did?
Speaker 2:and then yeah, yeah. So I ambled my way through school and many stories of kind of combined success and failure there. So I had good friends, almost all in the music department and it was yeah, it was, that was kind of my the thing that saved me going through school. I wasn't particularly drawn, I realized. Now I look back I just realized that I was really bored and if I went to a school like my kids, we too which is Selwyn College, which they loved I probably would have been much more engaged.
Speaker 2:Anyway, I went through through university and but I was successfully convinced by the powers that be that music wasn't a proper career and I should do something proper. So I I did what I was told and I applied for electrical engineering and I didn't get in because my marks weren't good enough and I was like, oh, okay, and I didn't know a whole lot about electrical engineering, but that seemed to be what people were doing and I'm gonna give my age away here. But and that was when I was thinking about things to do, and that was 1992 and the internet wasn't around and computers were kind of a weird geek thing. So 1993, enrollment university comes up and I didn't know what I wanted to do so I just ticked the same boxes as I had done at school chemistry.
Speaker 2:I was crap at chemistry, pretty crap at math. I was crap at everything at school mostly, and I'll tell you what. Now this is an excellent piece of guidance that I got from someone at the Enrolments desk for chemistry. He said I never met him before. He said Tim, you don't even like chemistry and you're no good at it.
Speaker 1:He's correct.
Speaker 2:Yeah, At least he was accurate. And he said it's the morning, you go away and spend the day trying to find other subjects at university and if you can't find anything, I'll enroll you in chemistry. And I went and found computer science and what a brilliant piece of guidance that was. He looked at what I was enjoying, which was nothing in particular. Honestly, he said at least go find something different. And that was the right thing to do Was to go looking for different options, something different at least to try. I found computer science and just a few years later, Wink of the Eye.
Speaker 2:Computer science has been a core thread throughout my career and I honestly, I do things for fun in the computer realm and as I followed that thread throughout university, when I did things because I thought I should, I didn't do particularly well, and when I did things because I was just interested, then I did better on it. And one of the key things I worked out. At university I studied computer science, maths and physics. I discovered that I was actually better with words than numbers and subtle distinction at that stage in a way, but very roughly. That led me over time to working with people and working in.
Speaker 2:I guess call it management or leadership, and I wasn't thinking of becoming a presenter or anything at that stage, but by then I had a couple of things going on. So music actually, I continued playing jazz and various other forms of music and that paid for my degree and I didn't have conventional jobs like other students and I did music because I liked it, but I had this leadership there finding gigs, doing gigs, getting paid, organizing that I was always the call it, the leader of the band, Not that meant anything musically, but just finding gigs. And then I found that I was more not so much rewarded, but I was just better when I was expressing myself through my words and there's a creative element there, as opposed to the very definitive stuff that came through maths. Yeah, that was a thing that I discovered by my early 20s, I guess.
Speaker 1:And then how do you go from that into investment banking? Did you pretty much come out of out of years in between there?
Speaker 2:So roughly my life was delineated in my 20s. I was studying computer science and I managed to. I really squashed my degree. So I took a three-year degree and I managed to squash it into five years. And so by the time I was taking the last few papers of my degree, a friend of mine had started doing this thing with the internet.
Speaker 2:And the internet I don't know if you remember was this fad thing from the early 90s that only gigs were in too and it wasn't going to last and all that kind of thing Anyway. So I was chatting with a friend, this friend and he seemed to be pretty interesting. So I had a party at my place and we had a chat on the stairs and I remember explicitly my interview, if I had one was over B-52s, that he had poured on the stairs of my parents' house, the internal stairs, and we chatted about this thing and the internet. Yeah, it could get quite big and he's running the software and that's kind of cool. It was called Wingate and yeah, maybe I should come and give him a hand. So Monday morning the hangover had had rolled off and I rolled up to his place. You know, nice and casual, and that was 1996 and again people had really heard of the internet and I started working with my friend, adrian. Now I knew Adrian through music and this is the theme where music had got me into meeting very smart people, and smart people who can have a yarn and have a laugh and all that kind of thing.
Speaker 2:So a year later we'd gone from receiving some of the first payments. I wasn't the owner of the company, that was Adrian. Some of the first payments for that arrived by check to a PO box and we would take that to the bank and they would do their things and the money would arrive three, four weeks later from overseas. Well then we went red. Then we invented this thing called selling stuff online, which meant someone would type into an email their credit card numbers. They would send that to us. We'd put it into a word doc, we'd print it, we'd fax it to the bank. The bank would do fancy things over their end and they'd fax it back and money would arrive in the account. It's like this, selling things online. This could be big. There were a couple of us then. Now the internet was very small. It was like a village. You trusted everyone. We called them all white hats. Everyone was good, you didn't worry about passwords and you were very friendly and I knew the founders of lots of this early software.
Speaker 2:But, yeah, again within a year that had expanded quite substantially to the level where we had a thousand global resellers in about a hundred companies, and I was 22, I think, and I don't really know what a reseller was. I used the words right, use your words. Okay, sell again. Okay, so I'm selling. And then they're selling okay, so that's a reseller. That's how I worked out what a reseller was. And then one day, literally I just got an email arrived in my inbox and it said hey, I'm Bob from Compact. Do you guys want to do a deal? And, long story short, we ended up in. We ended up in Texas doing a deal with Compact Global Computers, now bought by Hewlett Packard, and it shipped, I think, something like 20 million computers worldwide. That's pretty cool, yeah, and I was like 24 by that stage. So this is the business world that I knew.
Speaker 2:So I went through. There was the business side and there was the software development side, and then after a while I guess roughly when I worked out I was still learning a reasonable salary, but this is not like had I been in the US, there would have been stock options and big salaries and all that, and I got a little bored. Honestly, there was no development of my career and I didn't even know what that was, but I just essentially got a little bit bored with about 26 old people in the company and so I just I left, for for a couple of years I've been learning about stock market and I worked out. There was this thing and if people had this thing, a particular thing, then they got fancy cars and boats. And I didn't have fancy cars and boats and the thing was called equity. And in New Zealand, software in the 90s and early 2000s no one talked about equity. Staff didn't have it. It was just sitting with the owner of the company and so I left there with nothing to go to. But I'd been studying, learning about equity in my own time. So I did three university papers and it was on the back of that that I went into Goldman Sachs.
Speaker 2:So I had for my own investment purposes. I created the concept of a managed fund and I just asked about to my friends if they wanted to join my managed fund and surprisingly, some of them said yes and so I took in their money like someone might invest $10,000 with me or $5,000. And I unitized that. I turned it into the concept of a managed fund. And then one of those units that cash I bought shares and I did reports, full transparency and logs and everything. So everyone knew what was in the portfolio and I did monthly updates and I was training myself to be a fund manager and I did it from the perspective of being a software developer. So as a software developer, you get given a problem, you know nothing about it, you master the problem and then you build software to build a model of it. And that's what I did. And so I just worked out the way this unit fund approach must work. And I had a cash balance and dividends and all that and I counted for everything.
Speaker 2:So when I went to interview with Goldman Sachs, they said, oh, you've been working as a software developer and those weren't even very common in those days and the internet was kind of new. People only just tweaked on that this might be going to be a thing it's only six, seven years old by that state and they said well, what's your experience in financial markets? So I was able to give them full records for, I think, five years, of all of my transactions, every stock I bought, my investment philosophy, a list of all the admittedly anonymized investors, all the amounts, everything. Wow, they said, okay, that's really good. And they offered me a role as a business analyst. Oh, they said, well, would you like to apply for this role? So I quickly called a friend of mine and I said so, what's a business analyst? This guy, steven? And he told me oh, you kind of take the complicated bits, like the numbers, and you turn them into words. I said that is me. I understand the numbers, I just can't express the numbers. I use the bullshit factor, so I use words. I totally, I can do that. So I got the job.
Speaker 2:Long story short, I got the job after many, after many interviews, and the funny thing was this was a turning point in my career in many ways. I was interviewing for a dot net evangelist role for Microsoft. This is dot net was new and they wanted people. You know I would buy that stage. I was one of the kind of rarely senior developers in the New Zealand software industry and so they wanted to get me onto dot net and I was going to travel around being an evangelist. Honestly, it would have been a cool role, but it was very much a tech led role.
Speaker 2:And so I took the role at Goldman Sachs, with telling myself that I didn't really want it, but I was doing it like a paid intern Just to learn. And from there, after six months I got a role as an investment analyst, so moved on to the investment side out of the IT side, and then I just started finding opportunities and people were they talk about this thing and they'd never get it done, so I'd just do it. So, you know, they were trading fire exchange, but they were just doing it with the bank and I thought to myself well, if we trade it internally, I reckon I can build a model for this and we can make money out of it. So I built a basically you know, a simple program and I wrote all the software for everyone, for the trader, for all the advisors and everything, so they could put trades through. And it made I won't give you the exact amounts because, believe it or not, it's still running it made seven figures a year with no staff Right. Very impressive, yeah. So I rolled that out just as the GFC was kicking off.
Speaker 2:So I kept to my job, didn't I, cause I was paying off a significant multiple of my salary. You know, investment bank's pretty simple. You know we pay you X. You're making X okay, that's not good enough, get rid of you. You're making 10X okay, that's good enough, you can stay. That's the way they think of it. So I was making a good multiple. And then was that Making bank? Yeah, making bank, yeah, directly. But I did it cause I saw an interesting intellectual challenge and, honestly, it only took me about a week to make it work. And then the training took at least as long, but from idea for me to selling, suggesting it to the CEO, who said, yes, good on it, to it actually operating and making money was six weeks, and I'd challenge other people to creating a six week business that can make over a million bucks a year.
Speaker 1:And did you teach yourself how to code Cause, or was that all part of the year?
Speaker 2:That was in my twenties. I mean, I studied it right, I studied in a few times and then I was coding throughout my twenties with Wingate and we didn't think of it like that. In the old days. We used to call it selling things online. Someone started calling it e-commerce. If we needed something, we just wrote it, yeah. So at one stage we needed a mail server, so I wrote one and before we knew it was one of the most popular mail servers in the world. There were so many opportunities then we just created I created one of the first online chat things in 1996 for our resellers so we could all talk to each other.
Speaker 2:This was before ICQ or AOL or any of that, but I didn't think of it as a product. Now this is the downfall and this is where I think key re-innovation. We actually got it executing. But in that very innovative area I must have generated, along with the people where I worked with 100, 200 monetizable ideas, and I did none of them because I wasn't of that mindset. I was the product generation execution idea. Hey, I'll just get it working. And, unlike you, know a famous thing from New Zealand engineering early days, hayes Engineering created a wire strainer and before we knew it. We're selling it around the world and it's still for sale today, but virtually a vision one. But I hadn't thought like that at that time.
Speaker 1:It's very true and I think, yeah, our distance from the rest of the world over the last 150 years or so has meant we've been incredibly innovative, and I was in an interesting conversation yesterday where we were talking about why, actually, we often then don't think that we should listen to the outside. You know the views of outsiders when they come into the market. But I want to fast forward a little bit to Ambit and I'm keen to sort of dig into that story a little bit and understand. You know what was the origin story? What is Ambit? What is it? Is it a chatbot? You know what is it? I'd love for you to explain to those listening what was Ambit all about and how did it get started.
Speaker 2:Well, it started with people, and the first thing that we did as a founding group and I'm using that title intentionally there was a group of us about six of us got together on a regular basis with the idea that we had time, we had knowledge you know, I'd been through a few things by then, as had the others and so we got together I think every two weeks for probably six months. We had lunch, we talked about some ideas. If the ideas had merit, we'd whiteboard it or we'd run a lean canvas until we got down to a handful of ideas. But we didn't just approach it from product up. Roughly, the idea was we looked at what are the core areas that are going to provide a rising tide over this next decade or something. And roughly, the two ideas that we came up with was it was going to be the time for AI or it was going to be the time for blockchain, and I would say we were roughly equally split on. I mean, some of us supported both, but it was all a friendly discussion and we ended up choosing AI because one of the issues with blockchain came up that a lot of the things that could and would be done would be call them nefarious or, my favorite word, piratical. A lot of it was avoiding authority and all that, and I'd worked in regulated financial entities and I think if you do the right thing, you don't need to worry about it. So we went down the AI route and then we started looking. We consumed a lot of McKinsey reports and that kind of thing. Like I said, about six of us. Then A couple of people dropped off through that time. One person went, in fact, the two people that left early on both went and got CEO roles of significant companies that you would have heard of. And hey, you know, they said Doug, we love what you're doing, come and talk to us when it's up and running, but we've got other things now. Let's look down to four people.
Speaker 2:And then we the idea of conversational AI really jumped up at that stage because it had been very difficult. If you're just using something like a phone, it's hard to get that much processing power that you need on a local device. But cloud had come into its own by that stage. If you roll back to 2011, there wasn't really sufficient cloud accessibility or trust. Five years later there was.
Speaker 2:So we thought you know, we can do something with this and then we started looking for use cases and really one of the first and we came up with many but one of the first use cases was the concept, again, of putting technical things back into humans language. What if humans can talk the way they want to and get the best out of the machine? So you know, if you think of clicking and touching and swiping and scrolling, all of that is about the language of the computer and the limitations of the UI. So we thought, what if you can get rid of that? What if you can just put it in the way that humans like to interact? So the two ways that humans prefer to interact is through voice, but also this growing phenomenon of direct personal messaging. Now people forget about it. Now, whatsapp's huge, but in 2016, it was quite recent that Facebook bought WhatsApp for a record amount of the time. I think it was $2 billion, and in 2016, facebook Messenger had just become the busiest part of Facebook. There was more traffic going through Messenger, peer to peer, that you can't see, than there was on all of the rest of Facebook. All the posting and images and the videos, all of that that you see gets people into Messenger and that's why there's been a huge battle Now, if you think back to 20 years before, I'd literally created these direct messaging things, and so I felt really comfortable in that area.
Speaker 2:So we started thinking what are the ways that we can use that Now? One of the ones that came up early on was executive coaching, something that I'm sure you've done. Some of Everyone in our founding group had done some of them. We really liked the idea. So my tech co-founder, gareth Cronin, he's like, hey, you know what? I reckon I can put together an engine to do this. So he put together this engine. But what he did early on which is really smart is he abstracted the concept of the conversation from the content. And we looked at this thing. We're like, hey, this coaching thing's all very nice, but, holy shit, there's an engine in there that can have any conversation.
Speaker 2:So we had the rule of fight club. The first rule of fight club is don't talk about the server, the engine. So we had a conversational AI server. No one was talking about it. Now I love it when there's language which you don't have, because if you come up with the language, you can define the direction it goes Like. One of the terms that I essentially created was a conversational designer. That wasn't a thing used. So we well I say Gareth put this together and then we could see it had legs. And we got to the stage, the four of us sitting around a table, and right at that time one of that group. He had some very significant family changes and he couldn't commit to being a founder, which was upsetting, but is still a good friend of ours, and he actually invested in the company and I still see him regularly, so the three of us. Then, at that stage, we shook hands and we put cash in, which is actually very rare for founders. We put cash in and we started hiring developers.
Speaker 1:And you got started. I know Gareth. Gareth is probably the smartest guys that I've met but, interestingly, also loves music and polymath polymath brain.
Speaker 2:There's a thread there. So Gareth is one of those people that you can sit down with and you can have a yarn about just about anything. You can give them a book or a Wikipedia article and then you can have an academic or a call it, an intellectual discussion with them about that, and I love it. I find people like that kind of effortless when you're having that kind of a thing. And there's definitely thread in software. I've worked in quite a few software companies. I would say that at least, if not more, 50% of the people that I've worked with are musicians.
Speaker 1:It's interesting, isn't it? Yeah, I followed Ambit from a distance and watched what was going on. So, like you built a product, how long did it take you to get it into market?
Speaker 2:So that was an interesting journey and probably one of my favorite parts of it, which was that we had this engine that could do kind of anything, and then we had to. Instead of just selling one use case, we realized, oh, we've actually got to go broader. The first use case we thought we could monetize actually was helping banks sell mortgages, and we thought, if we can sign one bank, this company is going to be worth money. If we can sign four banks in the country, it's going to be saleable. So we started off with that. We set ourselves, I guess, a relatively achievable bar of valuation and we went out and we did some market research. So we talked to thankfully, by the time you're in your 40s, you've got a good bunch of gray hair, or no hair, in your network and so we talked to the leaders of companies that might need something. So we talked through one of the areas we came up with, or we came up with a range of areas, and the key one that we came up with was essentially customer service, and although we didn't have it quite nailed at that point. So we went out with a generic offering of conversational AI and we ran a design thinking workshop approach from one of our early team created, which was really cool, and we came up with ideas that we could solve.
Speaker 2:Now, in the early days, we had those innovators and early adopters who said we want to do something cool with AI, what can we do? So we go in there and we look for problems and we start solving them. Now we could do a very good job of Q&A conversation, finding out how to solve things, and it roughly fell into two brackets external and internal. So we built a couple of IT service desks for different companies HR support desks and, honestly, they work very well. But we came up with one significant problem, which was it didn't have the sufficient volume to justify a product. So it was that that's what you mean by doesn't have sufficient volume. You might get 50 people a day using it, but to get value out of it, you needed a couple of hundred people a day using it. So, and also, if you did a good job, the volume tended to drop off. So if you had people a day using your awesome IT help software or IT help conversation, they could say well, in terms of efficacy, it does its job, but in terms of cost effectiveness, it isn't there Right, because of where we pitched it. We pitched it as a very high end solution. It was yeah, I'll admit it, it was. I mean, expensive is a relative thing but for compared it was the cost of roughly the cost of an inexpensive person. But internally it wasn't always doing the full work for person. We got busy, everyone loved it. But on the outside and we signed with Helmsdine Glassons early on and they had high volume, hundreds of people, we were solving a lot of problems and it was an inexpensive employee across Helmsdine's and Glassons brands and it was doing a really good job and was really worth the investment. So it's roughly where it fell was external worked really well and I'm kind of scrolling forward here in the product lifestyle.
Speaker 2:So that was a question of marketing. We only marketed it then for external use cases and if people wanted it internally, we would say, look, we'll sell it to internally, but it won't meet kind of KPI or ROI type measures, do you understand that? And we would sell longer, we would sell longer timeframes. And we said, look, we can do this for you, put in an external use case and then we'll provide this internal use case for you. But don't measure it, don't put an ROI measure around it and I really should have described it in a different way, which would have come, but really it was internally was a compliance, it was a need. You don't measure needs or compliance based on ROI. And also, the other thing I came up with was this phrase, which was if you're using an avant-garde innovative technology, it's actually a mistake to wrap ROI measures around it at the beginning.
Speaker 2:What I used to say to people is for innovation, roi comes at the end. That's when you can assess it. But I had and I won't say who, but let's just say it was a big bang. Yeah, I had the funniest conversation with it. We want to do something that no one else has ever done before. It's going to be this amazing marketing thing. It's going to be so cool for our brand and this and that, and we want absolute ROI proof and we want you to sign off that it's going to meet this. You know this KPIs.
Speaker 2:That is not the way innovation works. It is not. You have to go in and be prepared to have people talk about failure, and I don't love the way people talk about it. What you do is you go into uncertainty, you go into ambiguity and you embrace it as it comes, you learn from it and it's an ongoing process. I think there's a lot of discussion about failure in the New Zealand context or in kind of software where you do something and then it passes or fails. I don't believe in that. I don't think that's actually right Overall. There might be the outcome, but actually all the time you're getting little things that work, little experiments and you're doing three or four a day. That's the success and failure. But I'll tell you what if you have a company fail after a number of years, that's just painful and you don't want to yeah that's just such.
Speaker 2:I know you've had things like that.
Speaker 1:Yeah, you have, and you've experienced that too, so then it sounds like it would have been pretty tough going selling a product like this. So it's a technically challenging problem it was.
Speaker 2:It was. Look, it was always too hard to sell and it was so frustrating because when you put it into the right place, oh my God, it was so successful and people would love it. Let's say it's the best deployment we've ever done and we had such a good team and people would even say this is the best project management we've ever had. For the work we were doing. We should have been getting 10 times as much. You know, you could have given us SAP or Salesforce, and our team were good enough that they could have built it, sold it, implemented it and made it successful. And I think you know, going back, what I do thinks different. Yeah, I do everything different. Right, but we had such an incredibly hardworking team who really understood it and they did it because they loved it.
Speaker 2:But three years in, a couple of things came together. So Gareth, you will remember, was still at zero and so you know, bouncing time between zero and Ambit. Josh was in the midst of a move to Australia, getting ready to get married and again, kind of a bunch of life changes. And then COVID came along. And what do you do when you're faced with this kind of global thing that you haven't planned for Long story short. I went from being COO and one of three founders to CEO and the other two stepped back. It saved some costs from our P&L and I mean they were still available if we wanted to quiz them, but they weren't operational in the business and we went from 26 people. We never laid anyone off and I'm really proud of that. I don't think anyone appreciates how hard we had to work to achieve that, but I went out and raised on my own by that stage raised the best part of a million dollars in late Feb Remember late Feb 2020.
Speaker 1:2020,. Yeah, so COVID hit March 2020.
Speaker 2:COVID was just a thing late Feb and March and it's like this is going to be a big thing Went and proactively raised money to keep people employed, laid no one off and we went from. We only took as people left. People did some weird things back then. I've got to tell you Some people left. I had someone leave in the middle of lockdown because they said we're not getting together face to face enough as a company. I'm like you're literally in your comfortable clothes with your camera off on Zoom in lockdown and you're complaining we don't see each other enough. And then I swear that older people in the business has actually handled it really well. And there's one person I worked with, melissa Shaw, and she was just an absolute rock. She'd been through the GFC in finance and the younger people struggled more. I think they hadn't been through this ambiguous time of work. But we got through it anyway and we just took as people naturally left, organically left the company.
Speaker 2:We slowly whittled down until our burn was lower and then we focused incredibly hard just on the high return aspects and really focused in then retail. It was all customer service, so retail and utilities and financial services, and those were the areas where we could prove the ROI and that's where things improved. So we doubled revenue from there over the next 18 months. But it's really interesting you double revenue through COVID and you have investors complain oh, but this other company five years ago, when things were really good, they doubled revenue in a year and I'm like uh-huh, and you didn't do that? No, or they tripled revenue and I think that a lot of our investors generate. They got to the stage. Some investors were very good, but some investors and some commentators common commentators they looked at the results where we slowly grew to 2 million recurring revenue and complained about it.
Speaker 2:And at that stage, as a CEO, you're pretty exposed. You know what do you say. You can always go in an opinion shop and find a better a company that's done better. You know, oh, you could be selling alcohol online and you know they've gone up 10 times over a year. Well, they've gone out of business now, but that's the thing you're facing. So actually the harder thing was because everyone was like in a bit of shock was post COVID, when a lot of companies had disappeared and we're still there and starting to recover again. And you're in this situation where, man, we took a $940,000 and people are expecting us to grow like a US company that's taken in. Our closest competitor took in $100 million.
Speaker 2:I was gonna say like you must have been in the conversational AI space in little old New Zealand to be up against some really big players who started to jump into the space Absolutely, and that just makes it so hard it must have been New Orleans, microsoft, google, the very biggest companies in the world, and what would have been amazing if people had said you know what we only raised if, actually, if you look at us from a capital efficiency perspective, we were on the most efficient companies in the world. We raised about $3 million, $4 million, but we'd returned about six or $7 million in revenues. So, from a capital efficiency perspective, which I reckon capital markets, investment markets, have only just started to, even only just started to discover Most investors are not understanding that yet, but we were brilliant. And then you look at a company that's got 5 million revenue but they've taken 100 million to invest and then they double, they go to 10 million or 15 million. Of course they can get there because they've got a fricking marketing department.
Speaker 1:Yeah, that's right. So where's the company now? What's happening with it?
Speaker 2:Yeah, so the board have placed a new. They placed a new CEO in there who I guess maybe didn't have the ideas of where to go with that. So there's now another. Since I stepped back as CEO in July last year officially as of the end of October, october 2023, yeah, yeah, last year. And then so you had a short-term CEO go in there and then that person was replaced and now the company is servicing its existing customers and it's, you know, because it's we've always struggled to raise that big money from overseas. I guess you'd say doing the best with the investment that we've got in the existing customers. So, again, if you've got a customer that likes Ambit, they do really well, but it's not, it's really a niche play, it's not a mass market play, but it's a fabulous company. You know, if someone came along and want to get into that area of customer service, it could be a CRM player, it could be someone who wants to do a bolt-on. That's the future for the company, which has been bought and folded into something.
Speaker 1:Yeah, interestingly, with the, ultimately the three co-founders for you and two others that you formed Ambit with you went in there presumably as mates initially and then, as we all know, startups are super challenging from a co-found relationship point of view. How has that gone?
Speaker 2:So it got really challenging, certainly around. I mean, it couldn't have been more challenging in early 2020, right, and it's almost like we were trying to work out a way forward and it was almost like it was changing day to day. The most important thing for me is how do we make sure we do the right thing for the customers and the team, et cetera, and insulate people from those a kind of leadership challenges or leadership changes? And it wasn't really a challenge, it wasn't. It was a, I guess, just an extremely challenging time when the other two stepped away. Honestly, they were very good and gracious and did that and gave me some operating space.
Speaker 2:I think one of the challenging thing is, you know, if founders leave but they don't really leave, and then they're coming in all the time and telling you what to do. But if I'd made a call, then they would have helped me and you know, call it from a compliance standpoint. They were always there. They were always there to help, but you know it was. You know I'd say, you know, for the best part of a year, I mean, we were managing COVID, so I was kind of busy, but you know, since then Gareth in particular I've reached out to Gareth and I hired a.
Speaker 2:When I hired, you know, senior technical people, I actually included Gareth in that because I really respect, you know, not only his he's got great stakeholder management but also a really good technical mouse and knowledge and bullet technical, but from a product perspective, not just ones and zeros and so he was included in those processes and he continued to be an advisor on our advisory panel and advisory board and you know, I've met up with him and chatted with him and it's interesting how we've moved on and are in a really different space now that we're both non-operational in the company that we started. And it's a really weird thing. It's like it's like you've raised a kid and, you know, gone through those difficult teenage years and then they're going to their 20s when they don't need or want their parents, and then late 20s this is not where Ambitus yet late 20s they come, start coming back into your scope, you know.
Speaker 1:It's almost like. It's like being a band member, where you start a band and then a band member's leave and then you've got new band members and what is the band? Yeah, it's like.
Speaker 2:Roger Waters leaves, and then you know something like that and then it's like hey, what is Pink Floyd? You know one of my favorite bands, so it is just like that and I guess, to come around full circle, I've really what I'm doing now is I'm focusing on what's what I love. So you know, I've reached out to, you know I stay in touch with the guy that's running in that now and it's a simple thing, whatever you need, you know. So I talk to investors, because I bought them all on every single investor I've talked with and it's a very different. It's a very different thing when you've bought on someone's money and I take that incredibly seriously.
Speaker 2:It's like this fiduciary responsibility. I think it comes from working, especially in. There's a basic integrity thing as a person. But then when you work in financial markets, you develop this hey, one cent off is wrong, you have to be zero, flat, absolutely, never sleep until you're right. And that's where I was with. I remember one of our rounds. We raised $1.7 million and I was four cents off in the reconciliation and it took me so long. It turned out that that was the difference between six and seven decimal places on the unit rounding. No one could see the difference apart from the spreadsheet. Not even the orders are picked it up.
Speaker 1:Right, but you know you were looking for the four cents. I'm keen to chat a little bit about AI and the direction of AI broadly in the world now. I was at an event last night where this was the topic of conversation and there's a lot of quite disparate views, from excitement and optimism and wow, this is such a cool thing to fear and we are seeing AI present itself into our lives now constantly. You know a lot about AI. What's your take on where we're at and what we should be considering in the next year or two?
Speaker 2:Yeah, there's kind of two ways of thinking that I commonly use and I ran them in parallel right, which is bottom up and top down.
Speaker 2:So the bottom up, roughly you could call it okay, what are the little areas that it's gonna creep into your life. And I say to people often when I'm presenting who's used AI today and usually very few hands go up because often I'm presenting in the morning 8.45 is the one yesterday, for instance and I say, okay, well, who used Google Maps or Apple Maps to come into town? Almost all hands go up Okay, well, you all used AI. It's just you haven't seen it. It's crept in slowly. So predictive text that's been that's 10 years old Predictive text is just probability wise, what's the next most or the three most likely words you're gonna type? And often it's right, you know. So it's creeping in.
Speaker 2:So there's the bottom up area is what are the areas where it's gonna creep into your life? And when I asked a group the other day and it was about two PM, sorry, in the afternoon who's used AI today? Admittedly it was a more techie crowd and about 90% of the hands went up and so I asked people what did you use it for? Oh, I had a bullet point list and I just needed to turn it into a quick email to my boss. It's like, okay, awesome, that's really real. People aren't even thinking of that as AI now. It's just because co-pilots sneakily rolled out over the last couple of weeks for big companies. And have you got access to a co-pilot yet? By the way, microsoft co-pilot.
Speaker 1:Not for me personally. I'm not a big user of Microsoft products.
Speaker 2:No. So it's kind of they're rolled out across big companies, it's coming out to smaller companies and so I haven't got access to it either. But I've seen the demos and it actually looks quite cool. But that is small, it's iterative and it's just like spell check. You know, spell check changed our world, now you know so.
Speaker 2:Then the top down and the top down is you know, to be a little bit silly it's the robots marching round with guns, right, so I don't see that happening, but I do see that there will be some accidents and watch out for it. Just as we had Mt Gock, you know that Bitcoin exchange fall over years ago now, and we've had, you know, a couple here. We've had some other ones blow up FTX, et cetera. There will be examples like that where it's not really going rogue, it's not really AI going rogue, it's people who don't appreciate it, white hat people, maybe with too much trust, or people taking the piss. The danger is when the black hats get hold of it. Now there's some trade restrictions going in, so it's very hard to export the very best Nvidia capability. But if there's one company that could be call it nationalized or controlled, it could be Nvidia. That is one of the largest companies in the world. Now it's grown exponentially. It's just extraordinary because they run so much compute power and they can't go fast enough.
Speaker 2:But then you look back down the chain and it's going to cause global geopolitical upsets where you know there'll be some galleon asinide needs, for instance. You know galleon being a relatively rare element and you dig back down. You know maybe that chemistry professor shouldn't have banned me from his class, but I know enough about galleon. You know it's kind of hard to get hold of it, it's kind of hard to manage. Where is that sourced from? Those are the kind of questions. And so there'll be the second and third round of effects. I think it will be geopolitical. I think there'll be some major mistakes and, by definition, they can't be predicted. You know there'll be. They will be black swan. There's a few people calling the advent of ChatGPT's release of black swan. Those people don't know what they're talking about, don't listen to the, the ignorant of AI and the ignorant of financial markets, which is where the term came from. Now same Nicholas Tilley coined that term to, by definition, be things that can't be predicted. Yeah, it's really interesting.
Speaker 1:The conversation that I've heard a lot lately is people, I guess, can see that AI is on a, you know, a rate of assent that is actually quite phenomenal and it can do in very short time. In the last couple of years it has grown in its capability dramatically and so I think people can now see that everything they do from a digital point of view can be, or even in a physical, robotic way can be, done by AI at some point in time. And I had Rob Vickery, the bench capitalist, on the show here today and he was talking about how he would never want to go and see a fully AI produced movie, even though that's, you know, very much the world he lives in, because it lacks soul. As humans, should we be concerned by that? Like what will our role be?
Speaker 2:I would break it up. I mean, what is one of the benefits I've got is, I guess, is a creative, so I've gone to the extent of creating short movies that will make people's doors drop right. So I think a lot of that can be bought in. But I liken it to another favorite area of mine, which is motor vehicle racing. So I love watching motor bikes and cars and the whole lot.
Speaker 2:Now I know, ultimately, that the machines will be able to go faster than the people, but I'm not interested. I'm not interested in that. I'm not even very interested in unmanned spacecraft when a man or a woman is on that spacecraft. That's what fascinates me. It's the human endeavor. And I've said, you know, for all of humanity, all of our history, the story has lived in us and if we lose control of that story, it gets a bit sad. And I think if AI starts consuming its own ideas and producing us things and the perfect playlist and all of these things that you know that it can do, we become passive consumers. That'll be a sad world. I think it will be a bit of a soulless world and I think we could forget what true human emotion could be like A true human story. I know that you and I could catch up for a beer at three in the afternoon, 11 o'clock at night. We'll get kicked out of the bar.
Speaker 1:Right, that's a very likely. That's a very likely possibility. Yes, yeah.
Speaker 2:Yeah, so that is where I want to be Now. It's really funny. People say, oh, but you're a computer guy, you should be a nurse in this computer world. Computers helped me relate with people, and some people I don't need computers to do it with. When I got married, I was, you know, deeply in love and all that. There was never a computer in the way, in fact, messaging enabled that. But, holy shit, being with the person that I loved 24, seven, holding each other, that was the experience I want. When did I think of bringing a mobile phone into the mix? Never, right. So I think tapping into that true human thing is what will keep humanity, and we need this is where we need regulation.
Speaker 2:I don't often push for regulation, but I do in this area because I believe that it will bring us a better outcome. Now the problem, I think, is that regulators you know that not one regulator's ever talked to me and like I've been called some funny terms, I'll give you two. Mr AI, that's kind of cute. New Zealand's AI Overlord I really love that one. But how many people in government or regulation have talked to me? Zero, zero, but it's clearly not that important.
Speaker 1:I'd love to do it. It's going to be fascinating to watch this all play out. That's probably a really nice way to kind of finish off today. Tim, it's been a real joy chatting to you today. I'll include some links for people to be able to connect with you in the show notes to the show. So really appreciate the time that you've given today. So, yeah, thank you. Thanks, it's been awesome.