WEBVTT NOTE Transcript 2025-05-09 from FLAC by https://elvery.net/prototypes/transcribe/ on my MacBook Air M1 on maximum quality setting. NOTE Body edited. 00:00.000 --> 00:18.000 Okay, we're going to do this audience interaction bit, which I know it's Sunday morning and it should be illegal, but ... I'm assuming, but I might be wrong, so I'm asking, that all of you here are here because you're actually interested in entrepreneurship, in your own startups, whatever. 00:18.000 --> 00:24.000 Everyone stick up your hand who ISN'T interested in doing a startup. 00:24.000 --> 00:25.000 [no one put up their hand] Okay. 00:25.000 --> 00:29.000 Well, no, that's good, because I could be talking to the wrong audience here. 00:29.000 --> 00:42.000 So look, I've only got two slides and because I've been started early, you've got about 600 hours of me, but look, here are four good reasons to do a startup. [First slide (1) Get rich? (2) Make the world better? (3) Do interesting things? (4) Retire early (FIRE)?] 00:42.000 --> 00:48.000 You know, there's a chap called Zuckerberg who I think scored on number one, right? 00:48.000 --> 00:50.000 Second one, making the world better. 00:50.000 --> 00:52.000 Well, that probably wasn't Zuckerberg. 00:52.000 --> 01:00.000 Interesting things. And I just put another one down. 01:00.000 --> 01:03.000 Retire Early. I don't know if you've heard about FIRE: Financial Independence Retire Early. 01:03.000 --> 01:08.000 It's very American.  I've done it, so it kinda works. 01:08.000 --> 01:16.000 So if I was going to pick ... who if you got pick one of those who would stick their hand up for the first one and I'm not making value judgements on this. 01:16.000 --> 01:18.000 So this is the get rich one. 01:18.000 --> 01:23.000 All right. Super. The second one is make the world better. 01:23.000 --> 01:26.000 You're all bastards. [laughter] 01:26.000 --> 01:28.000 You're only allowed to do one. 01:28.000 --> 01:29.000 Okay. 01:29.000 --> 01:31.000 Was anyone voting twice there? 01:31.000 --> 01:32.000 [Can you start again?] 01:32.000 --> 01:33.000 Well, we'll go from the bottom. 01:33.000 --> 01:36.000 What about the retire early thing? 01:36.000 --> 01:37.000 Right. 01:37.000 --> 01:38.000 So you can only do one. 01:38.000 --> 01:39.000 Right. 01:39.000 --> 01:40.000 What about the do interesting things? 01:40.000 --> 01:41.000 Okay. 01:41.000 --> 01:45.000 And what about the - and you can only do one - make the world better. 01:45.000 --> 01:48.000 Yeah, I think you're all still ethically-challenged. [laughter] 01:48.000 --> 01:50.000 What about the get rich one? 01:50.000 --> 01:51.000 Okay. 01:51.000 --> 01:52.000 All right. 01:52.000 --> 01:53.000 Well, that's interesting. 01:53.000 --> 01:57.000 So for me, I'm going to talk about three things that I did. 01:57.000 --> 02:07.000 And the middle one of them was definitely trying to get rich, which ... as with a lot of covid-impacted things didn't quite happen in the end. 02:07.000 --> 02:08.000 I had a lovely call. 02:08.000 --> 02:10.000 Let me tell you, I had a call from the company lawyer, 02:10.000 --> 02:16.000 he said, "Damon, if we had to [] transfer you a million pounds to your bank account, would it fit?" 02:16.000 --> 02:18.000 And I said, okay, yeah, probably. 02:18.000 --> 02:20.000 And then I had a call a month later... 02:20.000 --> 02:22.000 "If we have to transfer you two million pounds to your bank account, 02:22.000 --> 02:23.000 would it work?" 02:23.000 --> 02:25.000 So I actually had to call the bank at this point 02:25.000 --> 02:30.000 and they said, only if there's nothing else in it, a Nationwide current account can only have exactly two million pounds in it. 02:30.000 --> 02:32.000 And then I had a call the next month... 02:32.000 --> 02:33.000 Now you can see where this is going. 02:33.000 --> 02:39.000 And they said, "Damon, if we had to pay you three million pounds...?" [and I said] "I'd have to open another current account if you do that." 02:39.000 --> 02:41.000 And then they fluffed it all and the company collapsed!  So that was a bit of a shame... 02:41.000 --> 02:46.000 Anyway ... so getting rich is a perfectly legitimate thing. 02:46.000 --> 02:50.000 And there are lots of people who do that. Making the world better... 02:50.000 --> 02:53.000 So two of mine were about making the world better. 02:53.000 --> 02:56.000 Now, one of them was in the way that I'm now here for sustainability. 02:56.000 --> 03:03.000 The other one was in the very early days before anyone knew what the Internet was or email was, 03:03.000 --> 03:05.000 I was one of the very first Internet providers. 03:05.000 --> 03:09.000 And that was really interesting, which also lines up with number three. 03:09.000 --> 03:13.000 So everything I've done as a startup has made for a very interesting life. 03:13.000 --> 03:19.000 I've only basically worked for anyone else on anyone else's payroll for about a year in total in my whole life. 03:19.000 --> 03:20.000 Right. 03:20.000 --> 03:25.000 All the things I've done have been interesting, less of those have happened when I've been on other people's payroll. 03:25.000 --> 03:27.000 And this retire-early thing is real. 03:27.000 --> 03:29.000 So for me, I didn't set out to do it. 03:29.000 --> 03:32.000 But in my mid fifties, I was able to stop. 03:32.000 --> 03:33.000 I don't have to work again. 03:33.000 --> 03:35.000 I can come and do interesting things like this, right? 03:35.000 --> 03:38.000 Except somehow I'm getting out of bed on a Sunday morning ... 03:38.000 --> 03:39.000 I've got it all wrong. [laughter] 03:39.000 --> 03:42.000 Right. 03:42.000 --> 03:43.000 Which is me? 03:43.000 --> 03:45.000 Yay. [Got the the slide to change] 03:45.000 --> 03:46.000 OK. 03:46.000 --> 03:54.000 So I'm going to talk about three things I did.  Now, clearly, because I'm not knocking around with Zuckerberg et al. 03:54.000 --> 03:56.000 I didn't make it into the top rich category. 03:56.000 --> 04:02.000 Although I'm going to say, while 20 years in finance, I spent a lot of time working with very well paid people, like people 04:02.000 --> 04:07.000 whose basic salary before bonuses was several million pounds a year. 04:07.000 --> 04:11.000 And Spike Milligan is right that having more money doesn't make you happier. 04:11.000 --> 04:13.000 It just buys you a better class of enemy. 04:13.000 --> 04:19.000 So I'm not actually bothered about the fact that I'm not knocking out, knocking around with Zuckerberg and so on. 04:19.000 --> 04:24.000 Anyway, here were three of these startups. 04:24.000 --> 04:27.000 So going back to about the mid 90s. 04:27.000 --> 04:31.000 How many of you in this room were born in the mid 90s? 04:31.000 --> 04:32.000 Oh, thank God. 04:32.000 --> 04:33.000 There's not no one. 04:33.000 --> 04:34.000 Right. 04:34.000 --> 04:36.000 The Internet didn't exist. 04:36.000 --> 04:37.000 No one knew about it. 04:37.000 --> 04:39.000 It was a thing called USENET. 04:39.000 --> 04:41.000 You could just about do email. 04:41.000 --> 04:42.000 So I spent a lot. 04:42.000 --> 04:50.000 I broke BT's billing system, collecting email from the US and from Germany and from Spain and shuttling it around. 04:50.000 --> 04:55.000 I was one of the world's biggest nodes for a thing called USENET, which no one probably knows about any more. 04:55.000 --> 04:57.000 And it was really interesting. 04:57.000 --> 04:59.000 And that was making the world better. 04:59.000 --> 05:07.000 And having to explain to people how you could send something for free instantly around the world at no cost, you know, it like boggled people's minds. 05:07.000 --> 05:10.000 And that company still exists. 05:10.000 --> 05:22.000 So if you were to go and look up ExNet in Wikipedia you'll see it sitting there as one of the earliest ISPs and I'm still registrar number 66 for the .uk domain space. 05:22.000 --> 05:28.000 So although don't generally do it, if you wanted to register UK domain, you could come and ask me nicely and I can do it. 05:29.000 --> 05:30.000 It's still very interesting. 05:30.000 --> 05:38.000 One of the downsides is I still get 10,000 SPAM attempts per day from people trying to SPAM me and my customers, but whatever. 05:38.000 --> 05:41.000 OK, so that's the first one, the Internet Service Provider. 05:41.000 --> 05:44.000 The second one... 05:44.000 --> 05:49.000 So I spent a lot of time working in finance. 05:49.000 --> 05:52.000 One of my customers was a little company called Lehman Brothers, for example. 05:52.000 --> 05:56.000 And I was there up until more or less when they died. 05:56.000 --> 05:57.000 And there's a funny story about that. 05:57.000 --> 06:06.000 But anyway, and so I work in regulated industries and see billions of dollars sloshing around for example. 06:06.000 --> 06:14.000 But myself and a couple of friends had built a business to try and improve privacy online. 06:14.000 --> 06:16.000 So we created a business called U-Centric. 06:16.000 --> 06:18.000 It's meant to be about you. 06:18.000 --> 06:21.000 And we were trying to protect people's information. 06:21.000 --> 06:28.000 So exactly prevent the sort of things which Facebook [] and so on, do scraping up all your data. 06:28.000 --> 06:42.000 So we were going to sit between you and the rest of the Internet and we'd act as a proxy for you so that they couldn't get your information unless a little thing would pop up or whatever in your display saying, "Do you want to let this information go out?" 06:42.000 --> 06:49.000 Now, I don't know if any of you use tools like NoScript or Privacy Badger or UBlock or any of those things... 06:49.000 --> 06:51.000 Similar sort of things to what they're doing. 06:51.000 --> 06:55.000 But then we noticed, oh, there's an interesting gap in the market. 06:55.000 --> 07:00.000 We know about money and we can't spend anonymously. 07:00.000 --> 07:11.000 So we created a virtual credit card, which is the first virtual VISA card in Europe, so that you could spend... 07:11.000 --> 07:19.000 So the official story was you want to buy your wife a birthday present and you have a joint credit card. 07:19.000 --> 07:22.000 So obviously you can't buy it on that so what do you do? 07:22.000 --> 07:34.000 So you come to us, Entropay, you put just enough money in an account, a new card that we create for you online, you put just enough money in there and buy it from there, which is fine. 07:34.000 --> 07:41.000 And the first thing that was ever bought on our system was a George, whatever-it-was, grill that I bought. 07:41.000 --> 07:47.000 Actually, quite a lot of money was gambling and porn, but we won't talk about that. 07:47.000 --> 07:59.000 And it causes some difficulty actually because VISA gets very twitchy occasionally, just like now the US goes to a very puritanical phase and puritans go and attack the money suppliers. 07:59.000 --> 08:06.000 Because if you cut off the money for OnlyFans or whatever it is, it makes them hard to do. 08:06.000 --> 08:12.000 And so VISA was getting quite twitchy about the amount of porn and whatever. 08:12.000 --> 08:17.000 It's called Entropay because I don't know if any of you in this room are engineers or mathematicians... 08:17.000 --> 08:19.000 ... you know about entropy? 08:19.000 --> 08:28.000 So I was generating ... the way our system worked was you get allocated what's called a "BIN" a bank identification number ... the first six digits on your credit card or debit card 08:28.000 --> 08:34.000 identify that BIN and then within it we would allocate create one at random. 08:34.000 --> 08:37.000 The digits were random in here so that no one could guess it. 08:37.000 --> 08:48.000 So no one there's a thing called a BIN attack where a criminal will go and try and do it against every sequential thing in a BIN to try and see which ones have got money in and take money out. 08:48.000 --> 08:57.000 So my friend and my CEO got very, very bored of me going on and on and on about having entropy in this thing and called it Entropay. 08:57.000 --> 08:59.000 So it's quite a nice brand name. 08:59.000 --> 09:08.000 And I think [] something like a billion quid was processed by us during the life of that. 09:08.000 --> 09:10.000 Now that company got bought out. 09:10.000 --> 09:15.000 We got very heavily into travel ... money, which is good. 09:15.000 --> 09:16.000 Two bad mistakes. 09:16.000 --> 09:20.000 One is to get into bed with Thomas Cook who went bust owing us a lot of money. 09:20.000 --> 09:25.000 And the other one was to be just getting into our pomp right before 2020. 09:25.000 --> 09:28.000 Because what happened to travel in 2020? 09:28.000 --> 09:30.000 So the reason that three million didn't happen ... 09:30.000 --> 09:37.000 and in the end I got three hundred thousand out of it which was a bit of a shame ... was the whole thing just folded. 09:37.000 --> 09:40.000 We had to sell to another business. 09:40.000 --> 09:43.000 But [] you know no one was harmed in the making of this. 09:43.000 --> 09:45.000 [Everyone] got paid off properly. 09:45.000 --> 09:46.000 All the investors got money. 09:46.000 --> 09:47.000 All the staff got paid off. 09:47.000 --> 09:50.000 It's a perfectly honourable exit for business. 09:50.000 --> 09:56.000 And the last one was about making the world a better place in terms of sustainability. 09:56.000 --> 10:05.000 So in 2012 a chap who I knew I can't even remember where from. 10:05.000 --> 10:09.000 Oh yes because [] previously for ExNet 10:09.000 --> 10:13.000 He had sold me a bunch of software and he bought a bunch of packaged software for me to sell. 10:13.000 --> 10:16.000 And that element of the business didn't go anywhere. 10:16.000 --> 10:17.000 And he called me up and said, 10:17.000 --> 10:19.000 "Damon, we haven't spoken in years. 10:19.000 --> 10:20.000 Have you read this book 10:20.000 --> 10:21.000 by this interesting chap 10:21.000 --> 10:23.000 called David Mackay 10:23.000 --> 10:26.000 who's really interested in saving the planet?" 10:26.000 --> 10:29.000 And it's a fantastic book by the way: 10:29.000 --> 10:31.000 Sustainable Energy Without The Hot Air. 10:31.000 --> 10:33.000 And I said "No that looks interesting!" 10:33.000 --> 10:35.000 I contacted him and we had a chat. 10:35.000 --> 10:42.000 And it turned out that he got to be Chief Scientific Adviser for the Department of Energy and Climate Change. 10:42.000 --> 10:48.000 And by another coincidence the chap who got to be Secretary of State for DECC was my local MP. 10:48.000 --> 10:52.000 So I was thinking quite a lot about stuff to do with sustainability. 10:52.000 --> 10:53.000 [And I thought] "Oh!" 10:53.000 --> 10:55.000 "Radiator valves!" 10:55.000 --> 10:58.000 I'm sure you wake up in the middle of the night yourselves and go "Radiator valves!" 10:58.000 --> 11:00.000 No? 11:00.000 --> 11:05.000 So if you've noticed outside this building is heated with radiators at least in the corridor. 11:05.000 --> 11:09.000 And there's a little device which sits at the end with 1-2-3-4-5 on it. 11:09.000 --> 11:11.000 Lots of people have those at home. 11:11.000 --> 11:14.000 And the nice thing about TRVs is they stop your room overheating. 11:14.000 --> 11:17.000 So you set a sort of maximum temperature for the room on that. 11:17.000 --> 11:20.000 Because it's uncomfortable and wasteful. 11:20.000 --> 11:23.000 And if you're trying to sleep in the room that's too hot it's quite difficult to sleep. 11:23.000 --> 11:29.000 So TRVs were invented in a chap at the company called Danfoss in 1948. 11:29.000 --> 11:33.000 And in 1952 he suddenly thought "Oh, I could sell these for energy saving!" 11:33.000 --> 11:35.000 But it turns out they're actually quite good at that. 11:35.000 --> 11:37.000 They save 20% of energy. 11:37.000 --> 11:40.000 But ... they're also a bit stupid. 11:40.000 --> 11:46.000 So if you go and put your radiator up and then leave the room it goes on heating the room even though you're not there. 11:46.000 --> 11:51.000 Lots of people sort of from my age upwards have empty nests. 11:51.000 --> 11:52.000 We've had kids in the house. 11:52.000 --> 11:53.000 They've moved out. 11:53.000 --> 11:54.000 Their rooms are still there. 11:54.000 --> 11:57.000 Why are we still heating our kids rooms when they haven't been there? 11:57.000 --> 11:58.000 Right? 11:58.000 --> 12:07.000 So we invented a smart one which without needing to be connected to the Internet or anything works out when you're not in the room and drops the temperature a little bit. 12:07.000 --> 12:12.000 And every degree you drop the temperature saves about 10% of the heat that needs to go in. 12:12.000 --> 12:16.000 So it's great for your heating bill and that's great for the planet. 12:16.000 --> 12:19.000 And we started it as an open source thing. 12:19.000 --> 12:26.000 There's a whole interesting ... who here knows about open source and free and open source ... stick your hands up? 12:26.000 --> 12:27.000 Right. 12:27.000 --> 12:28.000 OK. 12:28.000 --> 12:29.000 And it's a great thing right that we have it. 12:29.000 --> 12:31.000 But how do we finance it? 12:31.000 --> 12:36.000 And I offered a talk to a conference at the start of the month about how do you finance that. 12:36.000 --> 12:51.000 So we started off with an open source thing and subsequently had discussions with the government ... [I] led this thing in October 2012 with all the great and the good sitting there. 12:51.000 --> 12:55.000 What should we do to save energy and so on? 12:55.000 --> 13:02.000 But subsequently a few years in we managed to package it up well enough that the open source stuff is still there. 13:02.000 --> 13:11.000 But we created a layer on top which investors ... which the government gave us money for from places like Innovate UK ... which private investors put money in. 13:11.000 --> 13:12.000 You put money in. 13:12.000 --> 13:16.000 So you had a mixture of government money, angel money, and so on... 13:16.000 --> 13:24.000 I think in total we probably brought in about ... I'm never sure about these things but about five million in total into that last one. 13:24.000 --> 13:28.000 In fact each of these ... the first one run almost no money at all. 13:28.000 --> 13:32.000 The second one we had loads of venture capital money. 13:32.000 --> 13:37.000 In fact the venture capitalists were so incompetent that most of them went bankrupt while we were still solvent. 13:37.000 --> 13:44.000 Right. So we had weird things like the distress sales of stuff from venture capitalists who are meant to be the kings of the world financially. 13:44.000 --> 13:49.000 And lastly, we had about five million in the mixture of things including ... 13:49.000 --> 13:57.000 So from what Ben was saying yesterday none of this is really [] friends and family money but certainly personal money, eg from me .... 13:57.000 --> 14:02.000 Grants from businesses, venture capital, 14:02.000 --> 14:21.000 SEIS and EIS funding, and VCT funding ... we've had between the last two of those all of those I think we've basically had all flavours except that we never quite got into the bigger territory where you would get into really major funding on private equity. 14:21.000 --> 14:27.000 We never got that far which is why I'm here, not with Zuckerberg on the yacht. 14:27.000 --> 14:37.000 Yes. And the overdraft and stuff. Question: who understands who thinks they understand the difference for a startup between debt and equity? 14:37.000 --> 14:42.000 One! Right. You know what you're lecturing on next! 14:42.000 --> 14:49.000 So if you're creating a startup ... and I've done this a number of times, I've taken master classes in how to do a startup ... 14:49.000 --> 14:58.000 And I for the last of these, OpenTRV, I split the shares 50:50 with my friend because I thought I want this to work. 14:58.000 --> 15:00.000 I don't particularly care about money but I want some []. 15:00.000 --> 15:02.720 And the first thing that bloke at the masterclass said, 15:02.720 --> 15:05.920 who knows about how to start and how to work worldwide, 15:05.920 --> 15:08.600 what makes them success and what makes them fail, 15:08.600 --> 15:11.000 is "Never give your equity away early." 15:11.000 --> 15:13.880 Because the problem is, suppose I had had a billion quid 15:13.880 --> 15:15.640 company and then he went rogue on me, 15:15.640 --> 15:17.520 and it certainly happens to people, 15:17.520 --> 15:19.560 that you have someone with such a large chunk of the equity, 15:19.560 --> 15:22.040 you don't have it to sell to other investors. 15:22.040 --> 15:24.440 So equity is where you sell shares, 15:24.440 --> 15:27.320 and there are lots of models of doing it. 15:27.320 --> 15:31.000 Debt is where you borrow, for example, from a bank, 15:31.000 --> 15:33.160 or from your mum, or whatever. 15:33.160 --> 15:35.160 But it doesn't dilute your equity. 15:35.160 --> 15:38.200 And it's very important to understand, not at this stage 15:38.200 --> 15:39.720 and you're just sketching something out 15:39.720 --> 15:41.320 for the end of this week, right? 15:41.320 --> 15:44.200 But it's very important to understand the differences 15:44.200 --> 15:45.760 between debt and equity. 15:45.760 --> 15:49.160 So grants, in fact, are neither of those. 15:49.160 --> 15:52.560 Either grants are, if you get them right, they're free money. 15:52.560 --> 15:54.200 So you don't have to pay them back, 15:54.200 --> 15:55.880 and they don't dilute your equity.