A Chat with Simon Smith from Nabo

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Nabo is an online community to make it easy for local neighbourhoods to connect and interact. Gen caught up with Simon Smith, the new CEO of Nabo, to talk about his journey, where Nabo is headed, and how to retain top talent.

Watch the video here or look below to read the transcript:

S: Simon Smith
G: Gen George
G: Hi, guys! It’s Gen George again here with Simon. I guess we can screenshot that later. And basically, today we’re gonna be chatting about Nabo and the stuff that Simon’s been doing and how he got involved with this amazing startup, or I suppose tech company now, who were working out of We Work, if you can’t tell from the awesome digs behind us. I’m going to hand it over Simon, quite literally… and he’s going to introduce himself and tell us a bit about Nabo and what’s been happening
S: Thanks, Gen. So my name is Simon Smith, I took over as CEO of Nabo about four months ago now and I’ve done all sorts of things in my career. Probably the most relevant was I that I ran eBay in Australia from 2000 to 2008, before that I marketed premium brands online and before that, I worked at McKinsey and since then I’ve done a variety of things–big data, I ran a couple of divisions of Pacific Brands for two years and I spent the last five years running the virtual office business of Servcorp, which is an Australian multinational that no-one’s ever heard of but a great product nevertheless. And after five years, I decided it was time to get back into an online pure play and so I defined what I wanted to do a lot of and there were three or four things. I wanted to be an online company I didn’t mind whether it was BtoB or BtoC, because I had experience in both. I wanted to, obviously, have technology at the core and I wanted to have a lot of data. So when I was introduced to Nabo by one of my old contacts from the eBay days, Debbie Gilligan at Reinventure, they fitted those criteria perfectly and as I investigated the business, I was impressed by both the metrics that I saw and the success models from overseas and also just the fundamentally exciting and positive nature of what we’re building here, which is we are aiming to build a local social network for Australians. So, a way for people to connect with their neighbours, if they’re neighbours are people that they don’t know, but we believe they would like to know. 70 percent of Australians say they want to know their neighbours better, yet only 11 percent of them are actually friends with their neighbours on their existing social networks. So the idea of Nabo is that we connect people with their neighbours and their neighbourhoods and then wonderful things happen.
G: That’s awesome, just in time. So, how long have you been with Nabo now?
S: You weren’t listening–four months. 
G:That’s early days. 
S: I still have plausible deniability, just about. 
G: How long is that going to last you?
S: About another two weeks. 
G: I hope someone from the Nabo team’s watching! So now that you’ve kind of hit the ground running, what is the focus over the next six months to a year for Nabo.
S: So we’ve got three things that we’re focusing on. Obviously, to continue to grow the size of the community. So we recently welcomed our 350,000th Australian onto Nabo, which is exciting. We are continuing to focus on bringing interesting, locally relevant content to our members and that content is generated by themselves but we’ve also have got relationships with councils, community organisations and there government and charities, who have locally relevant content. And then third and related to the second, is that we’re also starting to sell advertising to monetise the site and our focus there will be advertising that is relevant to people as they engage with the communities around them.
G: Wow, so that’s cool.  So if you’re doing that, it means you’d be able to get quite like literally in suburb by suburb and get very relevant advertising. 
S: Yeah, so in theory we can advertise not just the street level, but the household level. But we’re starting off with the suburb level. So we think that gives advertisers a pretty unique ability to micro-target. Yeah and also the way that people interact with the site, they are usually engaged and ready to hear about what’s going on in their suburb. 
G: Do you find people like this, who are using Nabo, that they don’t use Facebook?
S: Around 15 percent of our members don’t use any other social network… Our members skew slightly older, but we have a full range. So we have retired people, empty nesters, people with young children, probably don’t have that many twenty-somethings. Because we believe that people begin to engage with their neighbourhood when they settle down. So people are much more likely to own a home, they’re more like to live in a house, they’re more likely to spend time around their
neighbourhood rather than running around the city go to nightclubs.
G: We don’t go to nightclubs. [laughter] Fair enough. And so it’s a two-sided marketplace, technically, right? How are you scaling on both sides to keep that density?
S: People talk about two-sided marketplaces and they talk about my old employer eBay as a
two-sided marketplace. But when I started at eBay, we just thought about the members, so a member could buy or sell. And I think that’s the way that we’re thinking about Nabo, you know, obviously a lot of neighbours will just look, but in the end, we would like everyone to participate in terms of asking questions, responding to questions, selling things, buying things. So I wouldn’t think of it as a two-sided marketplace at this stage. Yeah, it definitely is a community so the more
people who are engaged, the more value there is in a neighbourhood. And now, not only do we have 350,000 Australians on the site, we’ve got 16 suburbs with over 500 members and over 500 suburbs that have a thousand members.
G: So, does it hit that tipping point then? What’s the sort of number that you need in a suburb for it to really start taking off?
S: From our own experience in talking to sister businesses around the world, that we’re not technically related to but we build good relations with them, we think around four or five hundred. But activity racks up fairly evenly until then as well. 
G: Yeah, so what’s your relationship then with your competitors, shall we call them? What do you call them because you’re in the similar space but not really.
S: Yeah, I call them sister businesses. So one of the things I learned from eBay was the power of being able to talk to people. Back there it was the other country managers, so people who are in a very similar situation to you, facing similar problems and can maybe think about things in a different way. Obviously, here we’re an Australian business focused on Australia but we’ve got relationships with the guys in Germany, who are doing a similar thing, we’ve got great relationships with the guys in New Zealand, who’ve done an excellent job over there. We’ve spoken to people running the UK business, South African business and also spoken to the guys at Next Door, which is the business that we’ve all been inspired by. It started off in the US about seven years ago. I normally call them sister businesses.
G: With those companies, what are the biggest lessons you’ve learned about their growth that you’ve been able to bring here?
S: They’ve all approached it very differently really. The the guys in New Zealand have done a great job of building a very close relationship with a media company over there and they’ve leveraged that excellently and I think they’ve probably got the best metrics of any of our sister businesses around the world. The guys in the US have taken a kind of classic Silicon Valley venture capital fund and approached it from a very long runway. They’ve be going about seven years and they’ve taken the classic kind of growth in a handful of areas and grow out from there. So we’ve tried to be inspired by both of those. 
G: Find a smart way in the middle.
S: Is there a massive growth hack? If there is there a massive growth pact I think it’s finding that people are keen to engage, but we’re not at the level where we’ve become a habit yet. So the more opportunities we have to remind them, “Come to the site, something interesting’s happened in your neighbourhood, come and have a look.” We’re seeing great return on
G: That’s awesome. And so with the business that you’re trying to scale to become a household name. As a leader, I guess, how do you guide your team not to knee-jerk their way through. You know, if they see a shiny light, “Let’s go that way!”
S: Two things. One is I think you have to lead by example of using the site I think.
G: How often do you use it?
S: Easily every day. I don’t post every day, but probably every couple of weeks. You have to use the site and every time you use the site, you get an idea like this happens, that happens, have you noticed this? So just being very, very engaged with the product. And then, coming from a big data, a consulting background, I’m a huge believer in just the value of analysis and seeing what’s working now yeah and really drilling down into that, rather than making a guess. But I do also think that has to be balanced. One of the great things about running an online business, which it might not seem so when you’re running one, but compared to running something like a division of Pacific Brands, it’s very easy to test it. And can see very quickly whether it works or not. 
G: And what sort of parameters do you set up? I mean, from your much larger business experience. Obviously, you’ll approach something very differently to some of the first year start ups, who if they make a mistake, it’s a thousand dollars. How do you balance that between kind of creating that space where your team can kind of try out some things out and test it completely.
S: Yeah, well we have to have some structure, because our bottleneck is essentially the size of a development team, so we can’t just throw things up all the time. So we need a degree of discipline and it’s just about trying things and then being completely open. You know, “Is this happening? Is that happening?”-obsessively going over it every morning, checking the metrics. Let’s talk about it, let’s not be ashamed or embarrassed about it. Nothing wrong with having tried something and failed, but let’s take it on the chin and see if we can learn from it.
G: It make sense. So, yeah, how do you create that culture and make sure as well that you’re not losing that? 
S: I mean, we’rea tiny team. I guess when I was at eBay, we started with a tiny team and built a big team. You have to live it, you have to demonstrate it and you also you have to talk about it. So I find that as the leader of a business, whether it’s a small business or a big business, everyone is to a degree that you don’t appreciate, obsessively watching you… for signals over what you’ll do and why you’re doing it, how you want them to behave and what your expectations. So you have to be very consistent about doing the right thing or doing what you want other people to do and
talking about why you’re doing it then.
G: How do you attract the right talent? By the sounds of it, your team really direct the business.
S: Well, at Nabo, I’ve been lucky because the team I inherited has been really good. I’m very impressed by them. I think in my previous business experience, it’s been a question of–I mean if you’re trying to recruit great talent, you have to recruit that great talent yourself and show an enthusiasm for the business and enthusiasm and a focus on finding the right people for the business and articulating on why they should be excited by it. 
G: And then, how do you maintain them because I’m sure there’s a lot of competition, especially in a building like we work, do you find that when there’s a shiny light opportunity?
S: I think you just have to keep people engaged in the business. I’ve been lucky to generally work for businesses where we have a great product and you can get excited about it. But you do have to remind people to look at the impact to share success stories and if something goes wrong, to we’ll talk about it, rather than try and brush it under the carpet. Because there’s nothing more obvious than a big pile of dust under the carpet in the middle of the room. Be genuine about genuine about the business, display enthusiasm and engage people. I mean, I do love hiring people and I think, you know, at eBay, we probably had 50 or 60 people before I stopped meeting everybody who joined. And even after that, when someone did join, I’d spend an hour with them, talking about the values of the business and where I’m coming from, where we’re taking the business, and the sort of behaviours I wanted people to see. And I’m a big believer in making things explicit. 
You can think you’ve got a great idea and then you try and write it down and you’re like, “Oh, that’s not very good, after all.” So writing things down, people are always looking for why you’re doing things, so tell them why you’re doing things. Particularly if you’ve been saying, “Well we need to go here” and then for legitimate reasons you need to take a bit of a diversion, talk about why you’re taking that diversion and how you feel about it. I realise I said here and that’s why we’re going here and so help people understand it, otherwise they, particularly in Australia, people are wonderfully direct and willing to sign up, but also extremely skeptical. 
G: So, I mean with all this change in the startup space, in particular the tech space, there’s a lot of stuff around mental health, you know, being able to chop and change deal with failure. How do you, as a leader, manage that for yourself from within your team? 
S: For myself, I think I’m very lucky to have a very supportive partner which is great. Thanks, Deborah! I am also lucky that one of my previous colleagues is also in this building in a similar business so it’s great to catch up yeah with him every week for lunch or a beer and just kind of say, “Have you seen this or have you seen that, don’t you find that when that happens, you feel really bad?” All that kind of stuff. So having peers and then with your member of YPO, so that’s another peer support network. And then over the last five years, I’ve discovered the power of exercise. So you never feel quite so good in a day when, sorry… a great start to the day is going out. I run to work, go for a cycle, go for a swim. It might feel pretty grotty at the swimming pool at five to six but when you get out after, you feel great. So huge belief in the power of exercise and just peer support, reaching out, saying, “Oh, can you help me? I need you perspective and feeling a bit…” 
And then within the business, I think the same, so encouraging people to kind of have a balanced life showing some care for people when they may be quiet or withdrawn or they’re going through a tough situation and also it’s being enthusiastic about where the business is going. “Okay, that hasn’t worked but this is working. Look at this great story here, look at the impact we’ve had on this person here so…”
G: It’s very true and I guess then with that sort of engagement with your staff then, how do you keep them developing and learning? Not just about mental health and you know trying to split their day, what about their skill sets they’re dealing with and how you want the business to evolve with the different paths you can go on. 
S: This is quite hard for me because it’s quite a small business. I’d really like people to have KPIs so I wrote down what the KPIs were and basically my management team, each person would have about two-thirds of all the KPI’s… I think, first of all, you all need to have an explicit discussion with them about what they want to learn, where they’re going, what they enjoy, what they don’t enjoy and then be open about where you see the opportunities are for them and the business and then tying those two up.
G: Even with such a small team, when you’re changing so much for day one or first year startups, can it be difficult to try to put that sort of process in place?
S: It’s difficult, I guess. There might be a whole process you’ve forgotten about and like, “Sorry, I’m going to have to ask you to do it. You want to do something else?” I think it’s interesting–you learn a lot when this is happening as to what the other things you wanted to do. And also, all through my career, in my first role, I had it drilled into me the power of teamwork. Which, because I was never very spot at school, I’d never really had very much exposure to working in a team but I knew it was something that I wanted to do. So, if we have a big challenge, I always like to bring together the management, even in some cases the whole staff and say, “Okay, how are we going to approach it?”
G: So what’s the biggest challenge you’ve had as a leader across all of the businesses and things you dealt with? And then how did you deal with it?
S: I think the biggest challenge was Pac Brands, which I was running a division that when I inherited it, consisted of, and this sounds like an exaggeration, but it was three or four businesses that were competing with one another on innovation, sales, pricing, everything. Tooth and claw competition against each other. I also had to work out whether that was a sensible thing to happen and surprisingly it wasn’t and then to merge them and that involved some very difficult decisions with people who been in some of those businesses, in some cases for decades, very wedded to those businesses and found it very difficult to change. I needed some hard conversations there and then. 
G: And how did you deal with that as a person–the business going through that time and you having to tell people they’re going to have to finish up? They’ve been there for 10 years, it’s a tough conversation.
S: Well, the tougher conversations are when you can’t tell somebody, because they’re asking you and you can’t say whether or not the decision has been made because you know it’s not right time to say. I think once once you’ve made the decision, you kind of have to hold back and you desperately want to help them because they need some closure. Once you’ve made the decision you just, “This is why we’ve made it, this is how we’re helping you come to terms with it. I’m excited about this decision, I feel really bad about you, or you know I think you should do this, not that… ”
G: It’s never easy
S: No-one said it was going to be easy
G: There’s no correct way of saying this, but what’s the best way to handle it, letting someone go.
S: Just being honest and genuine. When I was at eBay, we had a customer support team based in Australia–we’re very, very close to them and we’ve learned a huge amount about customer experience by virtue of the fact that we were sitting next to the customer support team and then they were moved over, the team’s moved over to Vancouver. Firstly, we were able to kind of create a very, very cost-effective expat deal with some of them so we can see the Vancouver team with some of the guys from Australia, which was great. But other people, we had to let go and we managed to let them go in such a way that we actually hired some of them back later. So I think just explain why you’re doing it and make sure you look after people as well as you can. And there have been a handful of times in my life when I’ve kind of been too aggressive after my own interests and that, 25 years later, I still feel a clench in my stomach when I remember then. So, you know, you’ve got to be able to look at yourself in the mirror every morning. 
G: That is a tough one. What do you think the next big challenge is for Nabo over the next six to twelve months to get where you want to be?
S: I think continuing to grow because it’s–we’re providing a channel for people to advertise at a very local level for us. For us to grow that channel, it would be really great to get advertisers, so there’s innovating around what our growth challenge should be. We’ve got some great media partners, so we want to work with them more closely as well. Understanding the right dynamic around the community and connecting them to the content and getting them to produce more content. I think it’s really interesting, practical and intellectual challenge as well. And then advertising, so despite the fact that I’ve worked in a number of online businesses, I don’t have an advertising or sales background. We don’t at the moment have the ability to hire someone to do that, so it’s a question of learning, me and the rest of the teamlearning this whole new industry, which is going to be our revenue stream.
G: And what do you think corporates roles are in the startup tech space? 
S: I think they are to be great shareholders. And invest in companies for lots of free promotion.
S: I’ve worked in corporates that have been desperate to innovate, it’s incredibly hard yeah. I think nearly all of the cases of successful innovation come from a corporate buying a company that’s already successful or being a shareholder in a company that can grow to success. People who think that they can grow kind of entrepreneurs or grow a new business from within the shell of thatexisting organisation, I think they’re killing themselves. 
G: So how do you think more corporates get involved? Is it straight up investing is it starting accelerators external to their own company, you know? Or is it getting involved in the existing co-working spaces? Or its it a bit of everything? How is it gonna get there? 
S: I think it’s a bit of everything. Get involved, get a seat on the board, look for where you can support the company and just, I think, initially probably have a lot of vets and then see which businesses are working and really par behind them and support them. And think very carefully about how you can support them and be aware of the fact that what if you do decide to support them, you need to be all-in on supporting them. And not expecting that business to go and every meeting they have with a middle manager, articulate why that middle managers should care about supporting the startup, rather than hitting their targets. You know, there should be very clear instruction from the CEO–“This is what this is now, we’re gonna help them and everyone’s going to help.”
G: Yeah, that makes sense. So then, when you’re going out as a startup to try and find investment with corporates and utilise for startups who are trying to figure out how to piece that together.
S: No, because I haven’t done it.I would to start with corporates. Well, start with your friends and family and then VCs.
G: And how would you suggest that people would approach? Have you ever had to pitch to a VC?
S: Not yet. But I think the good VC–Reinventure and Air Tree are two great VCs with really great management teams. I think a good VC is going to make themselves reasonably permeable to new opportunities. They’re not gonna have a huge wall around them and you’re gonna need to know someone who can get you an introduction. Because that’s like a bullshit VC. Because a good VC is looking for great ideas, it don’t care where they come from. So, if it’s too hard to get to know a VC then too bad, you probably don’t want to know them. Just go to the website and send them your idea. 
G: What’s your biggest piece of advice to anyone who’s thinking about starting a start-up or going to work for one?
S: I think starting one is very different from going to work for one. I think starting one, you need to be insanely excited by your idea. So I was lucky to be on the board of a company and we sold it so Telstra last year…Thank you, it was great. I think but for the CEO and his near insane enthusiasm for the business, the board would have closed it two or three times over the three or four years. So it’s just like, look you need mad passion for your business. Working for a start up is a bit different. You’ve got to really believe in the CEO and believe in his idea, but you’ve got less at risk.
G: Do you think people should do that first before going out on your own?
S: There are some very successful founders who’ve never worked for anybody other than themselves, because they satisfy the first part very well. You’ve also got to be really lucky. It’s got to be a great idea and it’s got to be a great idea right at the perfect time… yeah, and it’s like scoring a hole in one. And what no-one ever talks about is the “graveyard of forgotten failures”. We only see the successes. And that’s probably right because you do need such a massive passion about your idea to get it through. I think working in a startup is different so you’ve clearly got to becomfortable with the founder and about the business and the team that he’s built, but you do learn a massive amount, it’s kind of like extreme business. And just as you learn a lot more working in a in a medium-sized than a huge company, because you’re just exposed to so much more, working in a startup is like that on steroids. 
G: And do you think there’s a sense of tall poppy syndrome in Sydney or in Australia in start-up space or do you think that’s probably sorted itself out to a degree?
S: I don’t really think so. Where’s the evidence for that? I think the successful guys all seem to be heroes, as far as I can see. 
G: Yeah, especially the ones who are big outside of Australia as well. 
S: Lots of people are world famous in Australia.
G: Do you think you guys will have ambitions to go overseas?
S: I don’t think so at the moment I think we’ve gotten more than enough to focus on in Australia. I think a lot of Australian companies then expand to New Zealand and we’ve got our sister business in New Zealand is phenomenally strong, so I’m not going to pretend that we would ever try that. And then the UK–I think is too far away and not as similar as it looks. And then looking at Asia, my experience from my eBay days of Asian businesses is thatAsian online consumers behavein a completely different way to Australian businesses. So yeah, I’d be cautious about stepping overseas at this stage. 
G: Do you think if something like eBay if was started today, it would be as successful?
S: Something like eBay? Like an online marketplace?
G: Well, do you know what I mean or was it right time and right place?
S: Well, everything was. At the time, people were getting online just to join eBay. That was why they got internet connection. I mean there’s a lot of different varieties of eBay that go under different names now. Airbnb is similar. As someone pointed out, a lot of people made a lot of money from eBay. But you have to look at it now and say given the number of other two-sided marketplaces, or particularly ones that started as consumers to consumers, eBay missed so many of those. 
G: That’s a shame, especially because of the housing space with Airbnb. 
S: Yeah, they invented the feedback mechanism, which is at the heart of Uber and Airbnb.I mean Airbnb’s basically eBay for space yep and I think it’s interesting because when I was at eBay, it was like, “Well, we’re going to own everything, even in the option space.” Or kind of small VC commerce but now you’re seeing players like Etsy, which is very similar to eBay, but they tailored it to a niche.You see Chrono 24,  so I think they’re beginning to demonstrate that you can compete with a platform player.
G: What do you think changed in the eBay business or didn’t happen in the business that it missed so many boats?
S: A quarterly earnings focus. Look at the two companies that haven’t been boxed in, Google Alphabet and Amazon. I mean, Amazon, I don’t think they’ve ever really made more than you know a hundred million dollars profit. They’ve just ploughed everything back in. They’re never had a quarterly earnings focus, they’ve always said they were building for the long term. And now it’s one of the most valuable companies in the world and everything…So eBay very early on made a very aggressive revenue plan. It was something like we’re going to make three billion dollars and we’re going to make a thirty percent margin in three years time. They made three billion dollars in two and a half years’ time but for a higher margin. And everyone had stock options and it was all about getting the share price up and I just think we under invested. It would have been better to be like Amazon. For a long time, while I was at eBay, Amazon was worth less than eBay. It was a books business, they kind of moved from books and media into building their options platform and we were like, “Hey, they kind of like our business model more than their own.”
G: Do think there’s potential for eBay to shift and regain market share or category share?
S: I think it’s a bit like Britain in the Industrial Revolution shrink? Well, because it started at 80%. It had to. So I think, eBay market share was massive, way bigger than most, so it had to change.
G: Yeah, there’s a strange concept going. You could almost say, if we connect X amount of households to the internet, we’ll be able to get money, you know, which is totally different to today which everybody has…     
S: Well, you still have a great business in shrinking market share, yeah, if the market’s growing. E-commerce is going to grow for a long time yeah, Amazon is like two percent of total retail in the US. And drones are going to change the world, both for good and bad, so that’s going to change everything.
G: And I ask everyone this question–if you could have a superpower, what would it be?
S: Perfect self-control.
G: Oh, I haven’t hear that one yet. Well, thank you very much for letting me harass you on a Friday afternoon. Guys, I’ll see you next time but stay tuned, check out my Facebook page and you can RSVP to the next one.
S: And go to nabo.com.au  and start interacting with your neighbourhood!
G: Thanks, guys. Bye.