Cogent Conversations: Episode 2
Andrew Ritchie from EstimateOne
Episode 2: EstimateOne
There must be a bunch of business around Melbourne just like EstimateOne: boot-strapped, profitable, medium-sized and thriving.
EstimateOne is a ConstructionTech business based in Melbourne, helping builders, subbies and suppliers connect as they work on commercial construction projects.
While EstimateOne is not yet a household name outside of the construction industry, they’ve been (relatively) quietly going about their business for the past decade, learning about their customers, building a profitable business, and doing it in a way that means the people who are part of the organisation love being there.
Our conversation was with Andrew Ritchie, one of EstimateOne’s co-founders who cares deeply about people and creating an organisational environment designed to bring out their best.
Hear Andrew talk about topics like open sourcing the organisation’s operating system, creating an environment where frank feedback is the norm and the benefits of sharing the startup journey with an aligned co-founder.
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Meet the host: Adam Murray
Adam has led digital business, consulted to start-ups and corporates, run co-working spaces, and created his own podcast. Currently, he’s a Product Manager at Cogent, helping organisations verify their venture ideas and enable them to evolve their culture (but just quietly, the thing he loves most is coaching his son’s team of aspiring under-10 footballers).
Full Episode Transcript
Adam Murray: This is the Cogent Conversations podcast made by the people at Cogent. Cogent Conversations is about understanding all the things that go into making a digital business thrive. Helping create these types of organisations is what we love doing best. We also want you to have the opportunity to take the learnings from the best of what Melbourne has to offer, so you can apply them to your own business. To learn more about Cogent, check us out at cogent.co.
Andrew Ritchie: We want to win, but we want to win the right way. Want to share the benefits of a highly profitable business. Both within the team, but also through the industry.
Adam Murray: Hello, it’s Adam Murray here and welcome to this episode of Cogent Conversations. In this episode we are talking with EstimateOne. They are an organisation that I’m currently working at, consulting to. I’ve been there for about a year and a half. It has been fantastic to work there as a consultant and get such a great inside look at this organisation and to watch the pretty amazing transformation over that period of time. In my opinion, EstimateOne are thriving, in the way that they work, their ambition, what they are seeking to create in the industry, and how they enable their staff.
Adam Murray: I talked with Andrew Ritchie, CEO and co-founder of EstimateOne. Let’s get into it. Ritchie, very good to be talking with you on a podcast.
Andrew Ritchie: Yes, always great to have a conversation with you, mate.
Adam Murray: Yeah, have you been on one before?
Andrew Ritchie: Never.
Adam Murray: No?
Andrew Ritchie: No. Unfortunately, I think there’s only going to be my mum listening to this. But, there is a risk. Hi, Mum. I’ve made it, I’m on a podcast.
Adam Murray: I think Tony might listen as well.
Andrew Ritchie: Tony? Tony is a staff member at EstimateOne. So yeah, Tony and my mum.
Adam Murray: Yeah.
Andrew Ritchie: Two very divergent audiences, actually. But we can cater for both.
Andrew Ritchie: Why not?
Adam Murray: So, yeah. The purpose of this conversation, I suppose, I’ll give a bit of background, or give the audience a bit of a background. We’ve worked together for over a year now.
Andrew Ritchie: Yeah.
Adam Murray: In my capacity as a consultant with Cogent, and helping out EstimateOne, and so we got to know each other really well over that time. And I’ve got to see EstimateOne change what I think is quite an amazing amount over that 12-month period.
Andrew Ritchie: Yeah, I agree.
Adam Murray: I’m interested to hear what your reflections on that are, but yeah.
Andrew Ritchie: Yeah.
Adam Murray: Maybe we start there?
Andrew Ritchie: Sure.
Adam Murray: Maybe we start with the last 12 months and what you’ve notice change over that time and I can come in on as well.
Andrew Ritchie: The changes in the last 12 months actually started with one particular moment, which was an exit interview with a staff member. And he’d been with us for three years, and he sort of joined us for when we were about an eight-person business, and left when we were about 20. Someone else was sort of doing this line management so I wasn’t having day to day conversations with him. And we schedule exit interviews for either the last or the second last day of somebody’s employment; he was moving to Canada for… his girlfriend got a job over there. So, he was moving, so I was kind of thinking, “Wow, this is one of those situations where you have no control over that, with the employee leaving, so, hopefully he says a few nice things.”
Adam Murray: Yeah.
Andrew Ritchie: And he was really brutally honest, which you really get in an exit interview unlike any other kind of experience. Which is why now I love exit interviews. It’s sad, but you gather so much raw, unfiltered intelligence on your organisation. And he sort of, basically outlined his experience in the business which was quite hierarchical, direction being set by me, that everyone kind of believed in but didn’t quite understand and couldn’t contribute to. And so, to be completely honest, I felt really flat after that. And went and found a consultant that I’d had a relationship with before, James Law. And he did some interviews with all staff, without me being in the room. And basically, put forward a set of recommendations, which we then riffed on and basically turned the structure of the organisation completely on its head. And that’s been the 12-month process.
Adam Murray: Yeah. Did you feel like you had a choice at that moment? That’s a pretty, I guess, a pretty bold thing to do as the CEO and co-founder of the business. Did you think, “There’s a couple of ways I could go here,” or was it pretty clear in your mind?
Andrew Ritchie: We didn’t know what the answer was, and we also felt like our experience was particularly unique. And I actually think that most organisations’ and most individuals’ experiences are deeply unique, and therefore require bespoke sort of solutions, and a lot of first principles thinking about who’s in the business, what are the current challenges in the business? Where does the business want to go?
Adam Murray: Yeah.
Andrew Ritchie: Rather than just sort of taking tools or processes or reading a book and going, “Okay, this is what we’re going to do.”
Adam Murray: Yeah.
Andrew Ritchie: So, it was probably three or four months of playing with the problem and ideating what solutions could look like. Much like we would develop a product, or hopefully, how we would develop a product. So, we took that same lens against our organisation, and I think change wasn’t required if I was happy being the CEO of EstimateOne until I was 65.
Adam Murray: Yeah.
Andrew Ritchie: It would have worked. I wouldn’t have been particularly happy, and I would’ve been sort of the literal and metaphorical road block to people’s success in the organisation, because they would always sort of come up against my direction. And not really kind of deeply understand how to solve problems themselves. And so, in some sense there was no choice, in that it was so obvious to Mike and I that we didn’t want self-employment, and that we wanted to reflect on EstimateOne’s journey, and be really proud of how we enabled the whole set of careers to really flourish. And so yeah, there was a choice but there was really no choice.
Adam Murray: Yeah. I think one of the things that has impressed me, apart from the amount of change that’s gone on, and how it’s stuck to the organisation, is… my reflection of your role in that is that you’ve got this ability to be very open to new ideas and adopt them quickly after you’ve processed them and they resonate with you. And so, change has happened quite quickly, I think because of that, and in also a very intentional way. Yeah, I’m wondering if you agree with that for starters, and if you do, where you think that comes from?
Andrew Ritchie: Yeah. Yeah. Well, I have a sample size of one, so, I sort of do it how I do it. And it’s only at moments like this where you get some positive feedback about it and you can kind of go, “Oh well, it’s working, or at least someone other than myself thinks it’s working.”
Andrew Ritchie: Where it came from, I think, I did one of the Myers Briggs personality tests the other day, and I was ENFP or ENFJ or whatever, I don’t recall specifically what it was, but one of the traits. And I was reading this going, “Should I approach this with the scepticism I would approach reading my star sign for the week? Or is there a bit of science behind this?” I’m sort of leaning towards the latter now, because there was this particular phrase that I think that the personality type that I was, was called a campaigner. The campaigner really likes to flesh out ideas and have them rapidly challenged and sort of torn apart, and then reconstituted back up in a slightly different form. I like working like that. I think that’s a style that has suited my entrepreneurial journey. And it allows for that sort of almost to present a solution, and then enable the team to rip it apart, and not them to sort of go, “This is the CEO’s solution so we better endorse it.” But really encouraging them to rip it apart, and then together, sort of building it back up. I think that’s been really important.
Andrew Ritchie: I think I went probably for a little while, too far the other way, which is not presenting any solution, and just going, “Hey, everyone. What’s your ideas?” Without that direction people can get a bit lost. And so, finding a balance between providing a straw man that can be debated internally, and then getting excitement around what the solution is, and then capitalising on that excitement by putting it in place the next day. Rather than coming and going, “Okay. Well this is 2019’s plan now.”
Andrew Ritchie: Yeah. If I had my time again, I would have done more of that over the last ten years rather than just the last year.
Adam Murray: Yeah, okay. Maybe we can talk about some of the specific things that I’ve noticed, and you can come in on those. But I’m also interested in how you now feel, 12 months after this, and what you’ve noticed amongst the people in the organisation. So perhaps you can think about that? But let me talk about some of the things I’ve noticed. Like you’ve really trusted and empowered people who maybe have been a little bit inexperienced in the roles before they got promoted or installed into those roles. There’s… in the all-hands meeting this week, you talked about how it’s less command and control and more dynamically forming teams, as well, that come together around an issue and swarm to solve it.
Andrew Ritchie: Sure.
Adam Murray: And I’ve seen a lot of that happen, too. And people, I think, there’s a lot of empowerment, and a lot of ownership, in the organisation. Like people, it’s quite a metrics driven organisation, and they’re quite available to people. And people run with those and learn about those, and draw on other people’s expertise as they need to, to understand them. So yeah, that’s some of the things I’ve noticed, anyway.
Andrew Ritchie: Yeah.
Adam Murray: What do you reflect on?
Andrew Ritchie: Yeah, so I think that I’m quite deeply a numbers guy. And most of my professional life before EstimateOne was probably sitting on Excel. Or coding. And there’s a sort of an elegance to numbers, in that there’s a solution, and there’s a process. You sort of get quite binary outcomes that you can measure, “Did we hit that goal, or did we not?” And people are completely different in that you can’t measure them. Any attempt to measure someone usually is a big waste of time, in my view. You have to, to a certain extent, maybe, in a performance review setting. But ascribing a quantitative result to an incredibly complicated, multifaceted human being is an impossible task.
Andrew Ritchie: And so you, as a leader of any sort of business that is trying to drive quantitative outcomes, and we’re trying to drive quantitative outcomes in terms of NPS, or shareholder value. You have to balance that with an understanding that people are people. And I think what I attempt to do and what I rarely see happen but when you see it happen it works so well, is to run an organisation through a people lens, concurrently with running the organisation through a metrics driven lens, and that can be a point of tension when you didn’t hit your quantitative goal for the cycle, because your sales manager is having mental health issues, for example. That’s a people challenge and a quant challenge, together. And I think that’s the role of leaders. And when I say leaders, I don’t mean just executives, but anybody who’s playing a leadership role within an organisation, to sort of bridge those two things. It’s challenging, it’s challenging.
Andrew Ritchie: I think people swarming around issues is what they natively want to do. I think it’s sort of programmed into us, and I think a lot of corporate culture is actually working against the human psyche. And we’ve spent so long in a command and control environment that people immediately kind of get confused by this expectation that they’ll just solve the problems themselves. And lean on you and lean on others – and they need to – but once they get over that kind of confusion, and that kind of, “Oh, this is a bit different to working in a bank or working somewhere in a big corporate,” it immediately resonates with them because it’s kind of what we’re supposed to be doing. And so I think it’s uncommon and yet extremely natural. So, you’re tapping into a natural flow.
Adam Murray: Yeah, I think so.
Andrew Ritchie: And I think that people get excited about it, and people, they want direction, but they also want to innovate and problem solve themselves. And so, you’re just basically saying that that’s okay. It’s pretty easy. I don’t think much of what we’ve done is complicated. I think what we’ve done is just kind of gone, “Well, how would I want to work?” You know? Let’s first validate that I’m not an exception to the rule and everyone else is pretty much like me they want a level of autonomy; they want a level of direction. They want support but they don’t want to be micromanaged. And then just roll that out. And the hard thing is I think having the courage of your convictions that that’s the right model. Not actually rolling it out. Rolling it out is like, “Hey guys. This is how it works now. We’re doing this. We’re doing this. What do you think? Give us feedback.” You know?
Adam Murray: Yeah. Coming back to what I was saying earlier, bearing how you were feeling then, a bit flat, and maybe even pride about that sort of more hierarchical model, and how you were feeling as a CEO and as a person. And how do you contrast that with how you’re feeling now?
Andrew Ritchie: It’s different. I think that there is a lot more things happen now without my involvement. And that can be a great thing, and that can be an internally hard thing to do it. So, a great example would be I went on holidays recently, and I was away for five weeks. And I didn’t look at Slack, I didn’t check any emails. And I came back and there was a new staff member, Morgan, in the business. And when I left there wasn’t even a job ad up. And so, the business took upon itself, the people in the business took upon themselves, to identify the need for a role, write a job description, put it out online, short list the candidates, interview, select and on board somebody – who’s an absolute legend. The fact that it happened without my knowledge, let alone my approval, is wondrous to me. Because that’s what we’re trying to build. We’re trying to build something that’s not just a collection of people that do our bidding. We’re trying to build something sort of sustains itself and has a little bit of a life of itself. So that’s awesome.
Andrew Ritchie: And then sometimes I look at the app, and there’s three new tabs. And I’m like, “Why are we adding three new tabs? No one asked me.” And you’ve been empowered to make those decisions and not to ask me, so the challenge of self-management is having baked-in mechanisms that allow that feedback to be stated and to be heard and to affect the next action. And my feedback on the app and on those three tabs shouldn’t be sacrosanct because it’s the CEO’s feedback. It should be based on, we are trying to develop a meritocracy where it’s like, “Oh okay, well listen to Ritchie here because he knows a bit about XYZ, and let’s listen to Zaigs over here because she knows about AB and C.” So, I guess that’s the current challenge is developing out those systems that enable self-management to occur, really successfully over a long arc.
Adam Murray: Yeah. And I think some of the things you might be thinking about there are what are the agreements we have about our common way of doing things? And then what’s everything else? Yeah. Is that one of the ideas that you’re trying to implement to enable it?
Andrew Ritchie: Yeah, yeah, yeah. I think we need ground rules. Self-management doesn’t mean free for all. What happens if you say there are no rules, is that all these informal rules actually come up, and they are sort of between social groups within business or different functional teams. You do need rules. You just want those rules to sort of set the parameters of behaviour. And then within those parameters there are no rules.
Andrew Ritchie: And when I’m talking about rules, I’m talking about things like, how do we do a performance review? We don’t want to do it; we don’t want to do that bespoke for each individual. There would be way too much bias that gets generated if we did that. How do we recruit people? How do we have a stand up? When do we have a stand ups? And what time do you have to be at work? What’s the working from home policy? How do we exit somebody? Those things should be repeatable. Because A, it’s too expensive in terms of your time to develop them on the fly in every sort of particular circumstance. And B, they’re usually quite important, and so people need to know what to expect.
Adam Murray: Yeah.
Andrew Ritchie: Yeah. And another thing is as much of a challenge, working out what should be a rule and what shouldn’t. I think it’s pretty obvious. You also need to make sure that those rules kind of reflect the organisation of the day. And we can develop them and change them and hopefully remove rules as we grow.
Adam Murray: There’s a purpose of the organisation and some values, and perhaps I can’t recount the purpose word for word. But I know the sense of it. But it would be good to perhaps talk about that, and how that relates to the organisational changes and what you want to create.
Andrew Ritchie: I wasn’t a big believer of having a vision and a purpose statement and value statements. I thought that that was a luxury of large corporates, who had branding teams with too much time on their hands. I though the goal of a start-up is to start up and to actually build product, put it out to customers, generate revenue, recruit people, develop people internally. To me that was like, priority number one. And writing down your vision and your mission and your values was priority number 94.
Andrew Ritchie: And I think when you’re recruiting people, you start to tell the story of EstimateOne through a historical context. “So, my business partner had this idea, and then he approached me and we had a beer and you know, yada yada yada.” And every year, that story that I’m telling in the interview process gets longer and longer and longer. And you’re sort of getting to a point where you’re saying, “Is this even relevant? What happened nine years ago with the founder? With the co-founder? To this person who’s just here?” Do they want a story of the past or are they trying to understand the story of the future? I think they all want to know the story of the future. It’s kind of like, the past is good context, but fundamentally it’s like, “Well, if I’m going to join this organisation, what’s it going to be like in three years’ time?” And I think sometimes we spend so much of our time selling to new hires, and we’re not selling or painting a picture to our existing hires, including ourselves, as employees of the organisation.
Andrew Ritchie: So, you know, it became pretty clear to us that we needed to just tell the story of what this company was going to be. Why that was important, and how we were going to do it. And what this company’s going to be is our vision and that’s to intelligently connect the commercial construction industry. Why that’s important? Well, it’s important for a couple of reasons, and we loosely refer to these as our internal/external purposes. So, it’s important because through intelligent connection, you can basically save people time. And you can also give them great opportunities to grow both as individuals and as organisations. So, a lot of Australian commercial construction companies use EstimateOne, to generate revenue, to grow their business, to employ more people, and that’s something that we can sort of be really proud of and we can sort of rally around that.
Andrew Ritchie: Separately, we’re an organisation of 27 staff. Most of us don’t have a particular connection to the commercial construction industry. We’re not from that industry, our families are not from that industry. And so that purpose to grow or to accelerate the growth of individuals and organisations can be applied to our own organisation and us as individuals, too. And so EstimateOne really is about enabling that growth in our staff, through things like self-management, and by taking people that probably wouldn’t get a role elsewhere as a senior product manager, and saying, “Hey, we trust you. You’ll learn on the job.” Yeah, that’s the way we want to develop. And then the values are sort of the bed rock of how we behave.
Andrew Ritchie: So, they’re almost like the first principles of behaviour within our organisation and our values are cranes before code. Which is basically, the outcome is more important than the process. So, let’s not get fascinated by gigabytes and the Cloud and coding standards. Let’s make sure that when we focus on those things we’re focusing actually on the customer and then deriving our actions based on what the customers and the industry need, rather than some sort of pursuit to be accredited as an agile organisation. Our customers do not care about that. It’s cranes before code, enabled expertise, which is basically allowing people to do their best work by giving them everything that they need and then getting the hell out of the way. I think a lot of organisations are good at the first one, which is like providing a great desk and a great office environment, and a great computer, and great learning and development opportunities, but then getting the hell out of the way is really important, too.
Andrew Ritchie: Forthright and frank, which is all about how we communicate with ourselves, sorry, with our peers and with our customers. So, fundamentally it’s a bit about honesty, well, it’s a lot about honesty, but it’s also about speaking up early and speaking concisely, and then being really open for other people to be forthright and frank with you. With our customers, if we do something a bit stupid in terms of you know, we’ve accidentally double billed people before, rather than try and covering it up, forthright and frank says, “Let’s get on the front foot and call them straight away. This is what’s happened.”
Andrew Ritchie: And then the last one that we’re toying with, and because values should reflect the organisation of the day, and a lot of these were written three or four years ago now, so, it’s important that we sort of evolve them, is authentic ambition. Which is this, I guess, we’re an ambitious group of people but we’d like to think we’re kind of a little bit more humble about it. Being featured in the AFR is not really important to us. We want to win, but we want to win the right way. Want to share the benefits of a highly profitable business, both within the team but also through the industry. And that’s sort of one that’s certainly anchoring a lot of my behaviour at the moment. Yeah.
Adam Murray: Yeah, I think they’re really cool values. Well, they’re very catchy, to start with. All alliterated, so you know…
Andrew Ritchie: Yeah. That’s right.
Adam Murray: But yeah, cranes before code rings true a lot, and one that I hear in the office a lot, too. And it’s referred to through everyday decision making. Authentic ambition… it resonates with the other things that are happening within the organisation, too. And enabled expertise, of course, as well. But the one I wanted to just drill into a little bit more is forthright and frank. We went away on a leadership retreat, it was, was it last year now? Or was it the start of this year?
Andrew Ritchie: The start of this year.
Adam Murray: Start of this year, yeah. And one of the things you talked about was Daylesford, a beautiful part of the world.
Andrew Ritchie: Beautiful part of the world. One that I’m going to be writing for mayor of Daylesford. So, on the record, that I think Daylesford’s beautiful. Telling my mum and Tony that Daylesford’s beautiful. Got a couple of converts.
Adam Murray: One of the things you talked about there and started EstimateOne on the journey of, was this idea of radical candour, as well. And wanting to be famous for feedback. And I’m about to, this afternoon and tomorrow, go through my version of the process that is being part of it.
Andrew Ritchie: On the receiving end.
Adam Murray: On the receiving end, yeah. I’ve contributed to other people’s process, yeah, but rather than me explain it, do you want to explain what that is and why you think that’s really important?
Andrew Ritchie: The feedback process?
Adam Murray: Yeah.
Andrew Ritchie: Yeah. So maybe I’ll explain the particular process that we have, and then with reference to how the values shaped the development of that process. So basically, what we do is we attempt to give written feedback to every staff member, three times a year. And we’ve just started, so we are about to, with you, complete our first round of feedback. That feedback is a Google doc, and we select, our Chief of Staff selects, five or six people that we think are a good cross section of staff within the business, that have worked with a particular individual that will have meaningful feedback to provide. James sits down with those people, that sort of feedback committee, if you like, on a one on one basis, and asks them certain questions, to really get an actionable piece of intelligence about that person. And there is a way, I think, that he does it that sort of evokes radical candour. So, he will say things like, “If you’re being too harsh, I’ll tell you. If you’re being too soft, if it’s quite clear to me that you really want to say something and you’re not,” he has the opportunity to push there on those things, which a survey wouldn’t do.
Andrew Ritchie: He basically writes them up as dot points. We try and be word for word, to what the individuals are saying. And we put them into a Google doc. That Google doc is usually about five pages long, so it’s a lot of feedback. And we thematically organise it. So rather than just saying, “Here’s all James’s feedback or here’s Rami’s feedback,” we sort of go, “Okay, there’s a bit a narrative going on here.” And we try to construct that narrative and so we’ll say something or we’ll have a headline, “James is an extremely valued member of the team, in large part due to his gregarious personality.” And then you’ll have sort of proof point, proof point, proof point, which is the actual statements from the individuals, “But we think James could work on the body of his discipline,” and proof point, proof point, proof point. What I think is a little bit remarkable about that, is that it’s not anonymous, and that we put people’s names to it, to their statements. I think forthright and frank requires it.
Andrew Ritchie: I think to really enable someone’s expertise, you need to give them a follow up opportunity. So, if they don’t understand something, at least they know who they can talk to, to flesh it out further. We don’t want a bunch of whispers kind of cascading through the organisation. Like, “Oh, well now I have to go ask James about this thing where I don’t know who the original author is.”
Adam Murray: Yeah.
Andrew Ritchie: And I think the way that people have taken that feedback demonstrates authentic ambition. Because I was worried, because it is a step change in how honest we are being as an organisation with the people in that organisation. Like a three x or a four x times, honest. And I was worried that would be like three x or four x times the disappointment, and it’s actually been the complete opposite. And people have really read it, and gone, “These people are trying to help me.” The fact of it is, one thing I should mention is before we provide it to the individual, we get all the reviewers to review the aggregated content. So that they can point out if one reviewer is saying something that is the antithesis of some feedback that another reviewer has given and therefore the whole document is going to be confusing.
Andrew Ritchie: The other advantage of that is that because the person we are providing feedback on knows that that process is happened, they know that basically five or six people are standing behind this entire document, not just the words that they’ve said. And that gives a real sort of weight to it, as it should have a lot of weight. And I think that causes the individual to really reflect on this as something that really is the positive intent of the organisation, and the positive intent of the feedback providers.
Andrew Ritchie: There is no doubt that we have already seen significant change in people’s behaviour, as a result of this process, which is cool. I think that the risk with any process is that there are unintended consequences and the unintended consequence could be that people wait until the feedback cycle comes forward, before they provide feedback. So, they don’t sort of say it there and then, they go, “Oh, well, you know. I can say it in four weeks in the document.” And so, yeah, that’s another challenge for us that we’re working on at the moment, is how do we make sure that culturally, we don’t just defer feedback to this particular process? That the process actually encourages more feedback to be given at a higher frequency.
Adam Murray: Yeah. I’ve been impressed with how ready and able people are to receive feedback. Even prior to this, it’s like that value of forthright and frank has laid a lot of the ground work, I think, for enabling this tool to be a success. It’s a very impressive thing. I’m feeling a little bit nervous and excited about mine tomorrow, but, yeah.
Andrew Ritchie: How are you receiving yours?
Adam Murray: I’m going to… James is sending it to me tonight.
Andrew Ritchie: Okay.
Adam Murray: He asked me how I wanted to receive it.
Andrew Ritchie: Oh, he did? Okay, great.
Adam Murray: Yeah. Because of the success plans, which we could talk a little bit about as well?
Andrew Ritchie: Yeah, I guess just briefly that a success plan is a document, is basically a design, another Google doc, that is designed to set everybody up for success. One part of that is asking the staff member to articulate how they want to be communicated with. It’s a series of bullet points, usually. And then we copy and paste those statements into the feedback documents, so that when we’re providing feedback to that individual, we’re taking into account their desires on how to be communicated with. And I think that the first bullet point that you had was, “I prefer to be communicated with in person.”
Adam Murray: Yeah.
Andrew Ritchie: And so, when we have a Google doc, I worry that, “Oh well, you know, that’s not going to work.” So, I’m glad that James asked.
Adam Murray: Yeah, that was good. I think the other one I’ve got in there, which you referred to as well, is… Like, I talked in there about how I liked to receive feedback and I’m open to receiving feedback, but I like to be asked if I’m ready to receive feedback before I do. So, it was nice to have a bit of a prep that this is coming, for me, tonight.
Andrew Ritchie: That’s the system working.
Adam Murray: Yeah. So, there’s a couple of really, I think, pretty unique artefacts. I mean, not unique globally, but in a majority of organisations wouldn’t have those, like the feedback and the success plan. And you’ve been pretty open in talking about them as well, which is something that in some ways a little bit of an advantage, I suppose, of the IP you’ve developed. Why do you feel so, it’s almost like you want to share it?
Andrew Ritchie: Totally.
Adam Murray: Yeah.
Andrew Ritchie: Well, I think if you really believe in the purpose, which is to accelerate the growth of people in organisations, it’s kind of agnostic of… It doesn’t say who, sort of, kind of go, “We care about all people and we care about all organisations.” So if there’s another organisation, another start up, that is kind of encountering some of the same challenges we had, and they can kind of rather than going through six months of work, they can do sort of one month of work, and draw on a template, and hopefully modify it to suit their needs, rather than just using some off the shelf solution, which invariably does not work, when you’re talking about really important things.
Andrew Ritchie: But if they can be inspired by something like that, that’s a win for me on an emotional level, but it’s also a win for the business because that’s our purpose. I don’t think that that is… I don’t think our direct competitor in the market is going to take those documents. I don’t think they would value those documents. I think that’s why we’re winning, to a certain extent. And if they change their mind, and they really did decide that they valued those things, and they were like, “Oh, well let’s just use EstimateOne’s framework,” that would be a net win for me.
Adam Murray: Yeah, wow.
Andrew Ritchie: Yeah. Because for a variety of reasons. One, is it’s like kudos to us. Like a billion dollar company has just borrowed the ideas of a company worth 17 dollars. And it’s also affirming to the team. They’ll feel like they’re best practice. And it’ll make a better competitor as well. And we spend so much time when we’re thinking about business ideas, and starting businesses, obsessing with competition. “Oh, I had this idea but somebody else is already doing it. So now I can’t act.” I think empowered competitors are the single best thing you can have if you want a gun product. Certainly, having a strong competitor in the domestic market here in Australia has allowed us to… has meant that both our competitor and EstimateOne are now best of breed, globally. So, we’re investigating, and going to the UK market and it’s just… there’s light years between us and the current vendors.
Adam Murray: Is that right?
Andrew Ritchie: Yeah.
Adam Murray: Yeah. Yeah.
Andrew Ritchie: Yeah, so, yeah. If our competitors get a hold of it, I think it would be a net win for me. If someone else gets a hold of it, that’s great. If people go, “This stuff’s crazy.” We like command and control, that’s up to them.
Adam Murray: That’s okay as well.
Andrew Ritchie: Yeah, of course.
Adam Murray: We won’t talk about any specifics, but we’re starting to work on a new project together. And I think it’s triggered you to reflect on EstimateOne and your journey through EstimateOne. And some of the things that you might have done differently, or you might do differently if you’re going through the process a second time.
Andrew Ritchie: Okay.
Adam Murray: Can you talk about, elaborate, on some of those things?
Andrew Ritchie: Are you talking about the intent behind the business, or you talking about the process, or…?
Adam Murray: Not so much the intent, more the process. But if you want to talk about the intent as well, yeah.
Andrew Ritchie: Well, I guess, when you’re starting a business in your mid-twenties, you’re, well, I shouldn’t speak for anyone else. For my business partner and I, Mike, solving a financial problem was kind of key, right? We didn’t want to work 50 hours a week for the rest of our lives and be absent fathers. We wanted to kind of solve a 40-year income challenge in five years. Ten years later I’m still here, so I sure haven’t done that. But certainly, EstimateOne has generated a significant amount of wealth for both Mike and myself. And so, when we’re thinking up the next move, money doesn’t really kind of come into it. We’re kind of solved for that. And we’re both far more interested in solving for different things.
Andrew Ritchie: And most of the world’s intellect, I think, is channelled to solving problems of productivity. In terms of, “All software is a service tool, effectively productivity gains and solving for vanity or entertainment.” So you know, gaming and Hollywood for entertainment, and fashion and beauty for vanity. They’re all part of the human psyche, and they’re problems that deserve to be solved. But no one is really solving for government, or community, or parenting, or ethics within an industry. Harder to measure and harder to generate income out of. That we’ve generated income already, really empowers us and enables us to tackle some of those issues. And one thing my father always talked about was this concept of ‘noblesse oblige’, which I think is the French for ‘the noble obligation’. So basically, if you’re privileged, or if you’ve won what Warren Buffet would call the ‘Ovarian Lottery’, then there is a sort of moral and ethical requirement that you have. And it’s placed upon you because of your success, to help those less fortunate.
Andrew Ritchie: And so, Mike and I, and I think you and I think others that are in my close professional circle, are really interested in big ideas that solve for things other than generating cash. It so happens that probably good ideas, probably do generate a lot of cash as a by-product, but it’s nice if that’s not the primary motivator. And it’s not in this case. So, yeah, without going into specifics, we’re keen on developing a new business within construction tech, that we think will solve some of the more ethical challenges that we’ve encountered or at least observed in this industry. So, excited about that.
Andrew Ritchie: And I want to do it quickly. I want to take every learning that I’ve had at EstimateOne, and build a model of a business that isn’t perfect, and that will have its own challenges, but potentially skip some of the… actually it doesn’t skip it, it’s like playing the business on fast forward. With the benefit of hindsight. So, what we talk about is a business that’s constituted of waves, or layers, a couple of VCs that I’ve spoken to think like this, and I think it’s a really good way for an entrepreneur to think. Which is, “How does success in your current model give you the special key? That others can’t get, or it’s really hard for others to get?” Which allows you to unlock layer two. And then how does success in layer two give you a key to unlock layer three? And so, we talk about this business as a series of horizons, with quite clear metrics at each horizon. Quite clear, strategic areas of focus in each horizon. And each horizon might go for like, sort of one to two years.
Andrew Ritchie: And we sort of built this model because we can see that’s exactly what we did with EstimateOne. We just kind of didn’t know that we were doing it. We call it sort of, ‘The Trojan horse within the Trojan horse within the Trojan horse.’ So how we set up a notice board of construction tenders, which is a one-pager, which generated all this engagement from sub-contractors, which is the Trojan horse, in order to sell to builders. Builders providing documentation around their projects was the Trojan horse that allowed us to sell to suppliers, and so on and so forth. And so, I think being a little bit more intentional about that, can’t be a bad thing. It might not be a great thing. It might not lead to some sort of multi-billion-dollar, game changing, ethical business. It probably doesn’t increase our chances of failure.
Adam Murray: I’m learning so much from your learnings, working on this with you, so that’s great to have someone who’s gone through a ten-year journey to be able now to reflect on something new that you’re thinking about. So yeah, it’s really cool.
Andrew Ritchie: Yeah, it’s exciting. I think we all love starting things. I think the challenge for the long-term founder is understanding that it’s no longer your job to start things. That it’s the role of other people in your business to start things, and for you to support them and guide them and mentor them. But after ten or 11 years of this, I’m kind of keen to start new things. Whether that’s to start a family, or start a renovation, or start a new business, the start is fun.
Adam Murray: Yeah, yeah. We’re just about to wrap up. So, I guess I’ve got one, maybe it’s one question, maybe it’s a couple of questions… Now I get the sense that you have been quite intentional about, maybe it comes quite naturally to you as well, but getting to know a lot of people in the Melbourne start-up scene and the digital and tech scene. Just from snippets that I hear, people that you’re catching up with and that, so I’m interested I guess in why you are doing that, your intent behind that, first of all.
Andrew Ritchie: I think there’s a big part of me that is just a novice, right? This is the first time I’ve run a business. In actual fact, EstimateOne was the first time I was a line manager. I am not a professionally trained computer programmer, I’m not… I dropped out uni, of a law degree. I have no legitimate reason to be here. And the beauty of that, is that, if you’re a curious person and I would say that curiosity has been baked into me since I was a toddler, then if you don’t know something, then you’re forced to kind of go and seek out some answers or at least some opinions about what the answer could be.
Andrew Ritchie: There’s a danger of knowing too much, and I think maybe what Mike and I did well, was not know too much. Approach an industry with this sort of, we would call it innocence as innovation, that’s how I once heard somebody describe innocence as innovation. I think that’s so apt, that you don’t have any preconceived notions, so that allows you to go and discover best of breed and then apply that to your own business and go, “Oh, well, that’s not really working. Let’s do some first principles thinking and change it up. And it doesn’t matter if what we’re doing here is unlike anything elsewhere.” So, I think getting ideas and thoughts and energy from people outside of your business is critical. And that can be done through listening to podcasts, it can be done by reading books, it can be done by having mentors. But it’s also just great to get out and chat to people. And I like talking to people anyway, so it’s a fun exercise.
Adam Murray: Yeah. It seems to come quite naturally to you as well. Like you are a very friendly person who is able to include people. And has it been quite easy to go to say, I don’t know who you talk to, but to say someone who’s maybe running a bigger business, and has been doing it for longer, to go and initiate contact with them?
Andrew Ritchie: You know what, I kind of avoid those people. I just think that, that’s not because it would be hard to initiate contact, it’s just that I guess I’m a little bit more interested in speaking to domain experts. Rather than somebody who’s running a, who’s sort of like me five years, you know, forward. The worry would be that they would have their own particular philosophy, or dogma, that is working so well for them. And I would see that and go, “Oh, wow. This is how a 100-person company is run. I should just lift and shift that into EstimateOne.” I don’t think that would work, but I think it would be so tempting.
Andrew Ritchie: So, I’ve kind of avoided that, and I’m more interested in speaking to people that have a particular skill set. So, whether they’re passionate about UX, or passionate about mergers and acquisitions, or passionate about how software should be developed, continuous integration. That’s sort of where I get the inspiration for EstimateOne. And I think that goes back down to that core part of my personality, which is that campaigner type, which is trying to grab little experts and snippets of stuff that I find inspiring. And then the intellectual challenge for me, which I love, is, “How do we connect all that together into something that makes sense?” Rather than start with a top down approach, that the CEO of REA might articulate.
Adam Murray: Cool. Last question, and it’s probably a bit trying to reflect on Melbourne, a little bit.
Andrew Ritchie: Yeah.
Adam Murray: And EstimateOne is a Melbourne born and bred business, emerged from Melbourne. And what you’ve learned through talking to a lot of those people in Melbourne, predominately, I’m presuming, like what do you notice about the culture of Melbourne that might be different to other places but allows a certain type of digital business to emerge here?
Andrew Ritchie: Yeah, yeah. It’s really interesting. I’ve never thought about it before, but I’m going to have a crack. So, there’s this theory and I’m not very good with names, so I’ve forgotten who came up with this theory. But there’s this theory that the Renaissance and various sort of scientific progressions throughout human history have come from these upper and lower latitudes, mainly because of winters. And mainly because winter means you’ve got to be inside. And inside is the time for discussion and collaboration and education. And so, I wonder whether it’s the weather? I wonder if we were all on the Gold Coast, I mean, this is half joke half serious, if we’re all on the Gold Coast, we’d probably be all at the beach. And there’s something about Melbourne’s… I think Melbourne’s culture comes from the weather. I think place and geography play such a larger role in what we do every day than we kind of give it credit for. We just go, “Well, Melbourne can be on the equator and be the same.” No, we’d be completely different, actually. It would evolve completely differently; it would have a completely different outlook on life.
Andrew Ritchie: And I think, yeah, like today, you and I – we’re sitting and having a chat because it’s super cloudy outside. In part, you know? And I think that’s part of it. I think that there’s something about the Australian psyche that is deeply… it wants to kind of challenge everything. And I think there’s something deep about the Melbourne psyche that wants to do that in a really considered and artistic way. I think the combination of those two things generates a lot of entrepreneurial type discussions and entrepreneurial minds. And I think that’s awesome.
Adam Murray: Yeah. I think that’s a great way to end. And it’s been a pleasure talking with you, and, hi Mum.
Andrew Ritchie: Hi, Tony. Hi Mum. That was good.
Adam Murray: But it’s just a pleasure to know you as well.
Andrew Ritchie: Oh, that’s very kind.
Adam Murray: And have the opportunity to work with you over the past 12 months.
Andrew Ritchie: You’re going to feel completely different after you’ve read your feedback.
Adam Murray: I probably will. Yeah.
Andrew Ritchie: I’m kidding, I’m kidding. It’s a pleasure. Thanks, mate.
Adam Murray: Thanks, Ritchie.
Adam Murray: Thank you very much for listening. If you’re interested in keeping up to date with what Cogent is up to, including when new episodes of this podcast come out, you can do that by subscribing to our blog updates, at cogent.co/blog. And of course, to help us get the word out there about all the great digital businesses in Melbourne, you can help by rating and reviewing this podcast through your favourite podcast platform. And finally, if you want to tell us about how your business is thriving, or you know of another digital business that is thriving that you think we should hear about, the best way to do that is through emailing us at firstname.lastname@example.org. I’m Adam Murray, and I do look forward to hearing about how your business is thriving.