SPEAKER_01 0:00

Hey, welcome everyone to another episode of Beyond the Case. This is a podcast where global leaders from Howard Business School's OPM community join in a personal capacity and they share the real lessons, life principles, mental models that go behind building enduring companies. Today's guest is Kobe Jones. Kobe is from OPM 65. We connected a few months ago. We tried to arrange for a conversation, but you know, very hectic schedule. So I'm glad we're finally able to do this, Kobe.

SPEAKER_00 0:33

Welcome to the show. Thank you, Sahin. It's really a pleasure to finally meet with you. And uh as you know, it's uh 8 a.m. my time and it's uh I think 6 p.m. your time over in New York. So yeah, thanks for having me on on the show.

SPEAKER_01 0:46

Yeah.

SPEAKER_00 0:47

Kobe, how do you introduce yourself to the audience today? Well look, yeah, I've uh I started my business about 15 odd years ago. My background's primarily global financial markets and and private wealth management. I worked at three of the four major banks here in Australia before I moved to a boutique firm for a relatively short period of time. Uh and then I founded my company about 15 years ago. I think as you know, entrepreneurship, uh, it's not just about your value proposition, your business model. Um, the world doesn't owe you anything. Uh, but it's just more the personal challenges. So when I started my business, I actually sold the family home and and and used that capital to start that business. I had three young kids at the time. I say had young kids because my daughter is 22 and a half. She's she's just finished her psychology degree and been accepted into a law commerce degree and works with me part-time while she studies full-time. My son will be 21 next month. Um he uh yeah, he he also works with me part-time and studies full-time. He's doing commerce. And then my younger son, uh, he he's uh he was 19 back in March. And uh he he also works with me part-time and and studies full-time. He's just he's more into technology, but he altered me once again into the military. But I just share this with you, uh Sahim, because when you're when you're starting a business, you definitely shoulder most of that responsibility. But it is a very much a team effort. And so I'm very grateful for their you know support throughout my journey in establishing the organization. One thing that I did too, through that process of of establishing the business is I I chose to use my own capital and I've never raised any external capital. I've got no corporate debt. And so bootstrapping an organization over 15 years is quite challenging. It's it's certainly not a an easy exercise. Um, but we've grown to a point where we're about 30 odd staff and we generate very healthy revenue. Uh as you know, too, when you're bootstrapping something, you're always juggling, you know, the uh I guess the desire to ensure that you're always in the black, you're not, you're not into in in the red. So you always, you know, you got net profit. Uh but that just also means that you take a very much a different approach. You're a bit more disciplined, you're a bit more frugal, and your thought thought processes and your decision making very much are uh are long term. I mean, aspirationally, I want to have my kids uh not only stay in the business now, but but I I do want them to leave at some point and get external experiences, but just you know, come back at some point. And for me, that's you know, leaving a legacy for for them. But yeah, it's certainly starting a business and and bootstrapping, it's not for everyone. But it's certainly a hockey stick. It's funny too, Sir Hin, uh when I say I sold the family home, started the business, it for the for the first three years, I didn't pay myself a salary. And then when I did pay myself a salary in the fourth year, I paid myself like a thousand dollars a month. And then I felt grateful enough to pack to double that in the fifth year to two thousand dollars a month. But it's kind of kept sort of doubling ever since. So th there's that compound effect. But but also being privately held, it just means you've got a lot more uh flexibility and freedom to make different choices versus having external capital, private equity, you know, family office, whatever, I guess determining your direction of the organization. I I don't think anyone knows my company better than I do. Um, and I and therefore I should be making uh the decisions on behalf of the organisation and the people in it.

SPEAKER_01 4:09

Do your children recognize uh the significance of the effort you've taken here, bootstrap the company? Do you have a conversation around this with them?

SPEAKER_00 4:18

U Not looks not specifically. I think one thing you do as a dad is you I guess protect you provide and you protect, you know, your your children. You also want to invest in them in terms of values and disciplines and you know, focus and goals and aspirations. Uh I don't know if the kids fully understand and or appreciate the the I guess the sacrifice and the opportunity cost that that is attached to to bootstrapping something. I I do hope that they understand that in time. They're just hitting their early 20s, and uh that's also a very interesting period that I'm going through with them. Uh they're challenging me and uh they're questioning me and they don't they want their own identity and their own levels of freedom. So I'm going through that challenge, you know, right now, personally, with with the kids. You know, I love them very dearly, uh, but part of that love means that I've also got to step back myself as a father and allow them to make their own mistakes and explore the world without me, you know, without my input and decision. So it's a very challenging time in in some respects. I I'm not saying I'm a helicopter father or anything like that and put them in cotton wool. In fact, I was I was fairly I'm I'm one for tough love, so I was fairly intense with them growing up, and uh I certainly invested a lot in terms of conditioning them and preparing them for the real world. But but it's a really interesting time that that that they're going through, and I'm going through watching them go into to adulthood and standing their own two feet. But I don't know how much they fully either appreciate, understand, or recognize the amount of sacrifice that's attached to um starting up a business and then uh doing it, you know, uh without any external capital, uh, no corporate debt. It's a it's a real, it it truly is a real, real challenge.

SPEAKER_01 6:07

And was it their natural natural inclination to to maybe be part-time involved with your business or were you actively trying to recruit them and force them into getting some exposure to your side of the world?

SPEAKER_00 6:22

Yeah, so you know, it's it's so funny you say that. I mean, look, my business is in funds management services. So we provide what we call trusteeship, uh, fund administration, registry, custody, uh, and licensing services. So a lot of middle and back office services to funds and fund managers. And we deal with, you know, venture capital funds, private equity funds, private credit funds, property funds, listed, unlisted funds, feeder funds, funder funds. There's there's all different iterations of funds. And I just mentioned that because them growing up, they don't fully, they didn't fully understand what I did. And so I don't think they've come out of their high school and said, Oh, you know, I know what dad does and I want to work with him. It's really been through primarily my encouragement, but also just a product of employment conditions here in Australia. So Australia, uh, as we're talking about before, is very got is got very high standards, you know, a great lifestyle, highly regulated, uh, you know, fairly, fairly uh educated society. And that means that there's a lot of competition. And so sometimes getting an entry point into a professional services firm, it's not an easy thing. Uh, but uh if you've got networks, if you've got connections, that certainly helps. So them leveraging my you know organization is something that I certainly want to give to them. And I think it's only through time that they've really started to enjoy the the work environment because they fully understand, you know, what you know, what we do and and the type of clients and the stakeholders. I even share with them the uh the financials. So I've I've organized uh uh family meetings, family discussions uh to talk about not only our goals and our objectives and our values, but philanthropy and you know, uh holidays and these type of things. So we uh I I really want to open up further and further to them around the organization. Aspirationally, uh I I want to build a, I guess, a family office in in some respects. Um I've been fortunate enough to deal with many family offices here in Australia and they're just wonderful people and they're you know, I've just got nothing but huge admiration for them and and respect for them. Uh they have their own challenges, just like every other either family or or organisation does, but but the insights and the the the way they think, they are certainly in the top 1%, and it's a it's an incredible privilege to to be speaking with those people and dealing with those people. And they're not they're they're very humble. It's not like they're they're show ponies or they're you know extroverted or anything like that. I mean everyone has their own characters, but just wonderful people to to learn from. And I'm just very grateful that I've had a platform to be able to do that. But but just going back to your question of, you know, did they have an aspiration or, you know, did that did they have an inkling into coming into business? I I wouldn't I wouldn't say so. I mean, it might be a 50-50, you know, dad encouraging them versus their, you know, them. But I think as they've you know sort of moved more into the business and had different learning experiences across operations or compliance or tech or sales, etc., trusteeship, they've really started to to come to into their own and and and really enjoy the the the work environment. Um actually I'll I'll I'll caveat this by saying that my younger son though, he he uh did Air Force cadets when he was younger and and I did that too, and he rose to the ranks. He ended up being a a a squadron leader. And so yeah, he he did really well. Uh and he was quite good at uh rifle shooting. So he's number one in uh in the the state that we live in, Victoria, and is number two nationally, you know, for that. So he has an aspiration to move into the military. Uh but he's in the business, I guess, in the near term, uh to to uh I guess provide him some cash flow but also experiences before he he looks to move into the military.

SPEAKER_01 10:08

And now that all three of your children work with you in some capacity, uh, and forgive me for staying on this point for a little longer, but I think it's just such an interesting phase where most business owners have either inherited a business and I'm talking to you know the next of kin, or someday want to pass on the business, but you're actively going through an experience. So I'm curious, do you find your children questioning your assumptions, uh making you reconsider some of the practices at business, or have they not reached that phase yet?

SPEAKER_00 10:40

No, Sohin, it it they certainly are challenging me. So it's it's and it's probably more uh challenging me, not from a business decision-making perspective. They're they're probably doing it more from a personal perspective. So they do worry about my health, my balance in my life, my mental health, my physical health, these type of things. And so, you know, they're like, Dad, you know, go and get a hobby, you know, is it golf and go to the gym and you know, try these different things. And I love them for that. I I really appreciate their care because that's you know, that that's where it comes from. They they care about their dad. I I try and reiterate to them that my my uh my my hobby is my business, and and I don't I don't feel I work every day. I I feel I'm uh pretty lucky actually building a platform that allows me to meet great people like you, to have you know nice lunches, to travel, to give back, to leave a legacy. And I I love building and creating things. I love being productive, and that that for me is is is my hobby. Please don't get me wrong, your mental health and your physical health is extremely important. So yes, I go to the gym and uh I practice affirmations and meditation and uh breathing exercises and these type of things. I mean, I personally, when I was in my corporate world, I I I worked for for large institutions, big banks here in Australia, and I was very good at what I did. In fact, um I was number one in derivatives uh for one of the major banks here in Australia for the market segments that I serviced. But although I was highly performing, I started to suffer anxiety and I was about 31, 32. And that for me was a real wake-up call in that anxiety can be a physical thing. So so you make sure you sleep well and you're hydrated and uh you do exercise and these sorts of things. But for in my experience, the anxiety was more my mental health. And being in that environment for a big corporate um just didn't align with my values. And I thought my integrity was being compromised. I really didn't believe in what I was doing at that point. And so I had to remove myself out of that environment, and that's why I got to a stage where I started my own business. I always had that aspiration of starting a business. Um, but again, as I said to you earlier, the world doesn't owe you anything. You've got to create something that you know brings value, that is differentiated, that you know is a compelling proposition to people to work with you. But I, yeah, I I myself suffered uh anxiety that uh that I just couldn't explain. I I couldn't understand why I could be sitting here talking to you even uh and my heart rate's you know completely elevated. And you know, I I couldn't get words out, and I'm you know, it it affects your vision and you have tingling sensations in your hands, and yeah, you know, as I said, you you've got not only your heart rate up, but you've got this tension in your stomach. But but what it was was I was in an environment that I just didn't truly believe in. My integrity was being compromised, I didn't uh enjoy, you know, the that that that that work environment. And please and please don't get me wrong, I'm I'm very grateful for the corporate experience that I had because it's you know, you get experiences and skill, develop skills, knowledge, qualifications, networks, that you just it's it's incredible. It truly is. But you kind of outgrow that and you and you realize that there's more to life than than just that. And so yeah, I I um I understand the importance of mental health and and physical health. And so when my kids tell me that, hey dad, you know, you're doing really well with work, how how about you know, your health and you know, it could be your spiritual health as well. Uh I I take on board what they they they they mean. I try and reassure them that yes, I've got to balance that with uh uh I guess my my my personal passion, which is build you know, building businesses. When you were working a corporate job, did you at any point feel your identity was attached to your performance? Absolutely. I mean, I I l I love success. I I love doing really well, I love pushing myself. And yes, certainly your your identity gets attached to that in a corporate world, but you really you realize very quickly that well I realize fairly quickly that you you're just on in this this uh this this wheel, this, this, this, this mouse wheel where you're running really hard, but you're not really moving forward. I mean, you're the the the the big institutions have got you over barrel. Uh you your your career is is determined by them. And what my personal experience too is is is twice um I got made redundant for for bad decisions by by the corporate corporates that I work with. Uh and and so I was collateral damage. And and for me, I really wanted to empower myself by starting my own business. So when I started the business, people are saying, oh geez, that's high risk. But in my mind, I was actually de-risking myself. I was empowering myself so that I wasn't determined by other people's bad decisions. And so, yeah, I I thought that when I was climbing the corporate ladder, so to speak, that my identity was attached to that that lit that type of success. But you realize that's only one type of success. There's different types of success in life. Uh and for me, empowering myself was more successful. Um, being able to determine when I can take holidays, how much I can spend on things, having that freedom and flexibility of choosing. Even even the choice of saying no to things to me is a successful as a sign of success. But yeah, it's very natural in a corporate environment, Sahin, you're, you know, you you you you're trying to reach the numbers, you're trying to impress, you know, you're always, you know, uh yeah, s sort of managing up, so to speak. But you realize it's just it only gets you so far and in a big corporate, you're just a number. So yeah, that's the that's the that's where I got to.

SPEAKER_01 16:14

I'd like to stretch one of the statements you said a little more and dig deeper. You said saying no is a sign of success. Over the weekend, I read something around that. And uh I feel that is so relevant, you know, uh making sure that you're comfortable saying no and uh shortening your to-do list so you can stay focused. Could you talk a little more about, you know, the philosophy behind the statement you made on saying no being a sign of success and you know, maybe some experience you might have had around that if you recollect any?

SPEAKER_00 16:47

So here, that's actually uh thank you for focusing on that. But also it's a good point around just staying focused. Uh, I think as entrepreneurs, we're always thinking we're we're we're we're highly active in our minds, and we we we we we do something that we're very passionate about, and it's 24-7. And sometimes we can really stretch ourselves too thin and and say yes to too many things. Uh, we think that being busy is is uh you know a sign of success. Um but yeah, you're right. You have to narrow down your focus and ensuring that the activities that you either undertake or agree to are in your wheelhouse or aligned to your values. So I personally, uh under my company, have have multiple different companies, but they're all focused on funds and and funds management. But then outside of that, I'm part of industry associations as well as on not-for-profits. And so I certainly am conscious of ensuring I allocate time to those activities outside of outside of uh work. Uh and I've always got a sense of giving back. Uh I think if you're in a privileged position, you should be giving back to the community that supported you. But no also means saying no to certain types of clients. It might might also mean no to certain types of uh stakeholders or staff, you know, et cetera. No, as I said to you, I've said no to capital. Um and so you you need to get yourself into biz into that position where you can can say no. I've I've certainly when I started the company, I was very happy to get any client. It just validated my proposition. But when I look back at the type of clients that we perhaps agreed to, uh we've leveled up and we've got rid of uh a number of clients. I mean, dovetailing into our OPM studies, you've got uh, you know, the uh the the the chart which Das your Dash, you may recall, talks about with the uh the the the the cost to serve versus willingness to pay. And you have uh you have these quadrant of of of clients that perhaps you should be dealing with because they are high cost to serve, but they got a low willingness to pay. And so saying no to those type of clients, if they're not strategic clients, is for me uh uh one of the examples of saying no uh and a sign of success.

SPEAKER_01 18:57

You started your business at a point where you had three young children. You sold your house and you did not collect a salary for three years. Was your family behind you in that decision? Was it supporting you, or is this something you went out on a living?

SPEAKER_00 19:09

Oh no, you definitely need it definitely needs um your your family. And it's your immediate family that you know I'm I'm really talking about. Uh I think your wider family you know really cares about you and you know may actually deter you from from ta from making that decision because in their minds it's high risk. In their minds there's a high likelihood of failure. But but but if you've got a a family that sort of believes in you and you've got a high conviction on on your own self-beliefs, as I said, for me it was it was de-risking. Uh it's to it's certainly not a journey and a pathway that everyone wants to take, and and I appreciate that and I acknowledge that. I actually didn't fully understand that when I first started. I thought, why isn't everyone else starting up a business? You know, there's so much freedom attached to it. But actually, the security of a monthly salary or a perceived security of a monthly salary under a corporate, many people are attracted to. And it's funny because I mean I've been at this business for 15 years. Uh, and those that were sort of encouraging me, uh, I think uh in the in the outset, uh, were very much it was very much superficial encouragement. They sort of pat you on the back and go, oh good on you. But I think inside they're like, geez, I wouldn't be doing what he's doing. He's a he's a crazy guy. But I'm glad I'm gr very grateful for the support that I had from from my family. I mean, without that, I I just wouldn't get to where I am. And it's not just my immediate family, it's also really close friends. Even my business partner, I've had incredible support from you know, f from them. Um, and so yeah, without that, I don't think you can get so far. There's no such thing as a solopreneur in my mind. Uh an entrepreneur is is yes, you shouldering most of it, but uh but it takes a a team and a community around you. But there are, yeah, there's plenty of people rooting for you to fail. Uh they might not say it ex explicitly, but uh people want you to do well, but never never better than them. And and uh, you know, I've I've certainly experienced that, you know. But uh yeah, as I said, very grateful for for uh the family's uh support in my journey.

SPEAKER_01 21:10

You're now b you were back at school at a point where your children were at school as well. So walk us through the mindset on what encouraged you or motivated you to apply to the OPM program. How did your kids react to that?

SPEAKER_00 21:23

Look, the motivation was was a multifold or a number of reasons. I I guess I get to a stage in my organization where I had that ability and that freedom to choose. I'm I'm one for continuous learning and investing in my in myself and just conducting the research, uh just the nature of of my organization and uh my aspirations. I was very much aligned to you know to to where I want to head. And so when I when I explained this to the family, there was a there's a whole bunch of pride and joy uh with uh with my acceptance into the Harvard Opium program. Uh we went out for dinner and I got uh uh a very nice watch for for for For uh as a congratulations from the family and and and including my business partner, and I'll be taking them over later this year for my for my graduation. But yeah, I uh my I've always sort of studied on a part-time basis throughout my career. I've so so when I when I left my year 12, which is the final year here in in Australia, uh I had three days off. So I didn't work for three days, and and I've worked ever since. And so I've just turned 50.

SPEAKER_01 22:28

What have been some of your biggest takeaways from your OPM program or any cases or any professors that have left an impression on you? What advice would you give your children today if you could give one piece of advice to either the three of them or one each? Thank you, Kobe. In closing, my last question is Is there a book that you can think of which might have changed the way you think? Thank you. Thank you very much for your time and for reminding me of when Genius Failed, because that is a book which left a huge impression on me as well. I would never bet against those guys and then just seeing what unfolded. I think is a good reminder in the kind of times we're living in today. Amazing. Thank you, Kobe. Appreciate your time so much. I know you have a full day ahead of you now. So uh thank you for prioritizing this call early in the morning. And uh I wish you well. Sounds good, Kobe. Bye.