Darren Clark is the founder of Dazlab, which helps owners convert ideas into businesses. He has founded multiple businesses and has 'in the trenches' experience with exits. Listen in to his personal take on what went well and what he'll do differently next time.
@Darren Clark is the founder at @Dazlab where he and the team work with founders, business owners, creatives, technology people, and investors to get digital products off the ground and to market.
Darren started because he knew there was a better way to build digital products for people with great business ideas who needed help to build their vision. And he brought significant personal business experience, and some battle scars to starting Dazlab;
In this episode Darren
Michael (00:02.505)
Welcome into edition 140 of Small Business Matter podcast. Darren Clark joins me today. Hearty welcome Darren.
Darren Clark (00:13.41)
Thanks for having me on.
Michael (00:16.409)
Darren, I'd like you to kind of give us a little bit of your background in your own words. You're a multiple founder of businesses. You've had experiences exiting or near exiting, and we want to talk about both of those and the impact on you personally, professionally, financially. But you've had rich experience through the process of building businesses, as well as helping other owners in your current business.
you know, get better prepared to make more money out of and make their businesses more efficient. So what's the Darren Clark story just to kick us off?
Darren Clark (00:56.558)
I suppose I kind of look at businesses doing what I love, which is building software. I kind of, I love building software and being able to build software for other people and help them. You know, not just me, myself and my team. Helping people build software so that builds them a better business is just, I don't know, it's really enjoyable. I've had one agency that worked on for 13 years with a business partner of mine.
had some experience with startups, building my own startup, back into agency land again, and again doing another startup at the moment.
Michael (01:35.001)
Okay, so we'll come back to that history. What's the business DazLab as it is today? Let's get a bit of a handle on that.
Darren Clark (01:44.926)
Yeah, so DazLab is a, we're a small sort of boutique bespoke custom software development house. We primarily, again, just build custom software if, so we don't, we wouldn't look after just entertaining websites that just have content in them. We're talking about really functional systems for B2B, for the B2B market.
Michael (02:09.202)
Right. And your, many or most of your clients are other small businesses, is that? Well, you're gonna, yeah.
Darren Clark (02:15.818)
Yeah, yeah, I would say a lot of ours the majority of ours are small businesses They've they've found a niche they found a you know an industry that they're good at and they look to create software as a way to help create a new revenue stream for themselves, but also majority of them are also trying to solve a problem that exists in your industry that they already have so much knowledge in and so yeah, they use digital products and software to
effectively create another asset to make their current business bigger.
Michael (02:49.781)
Yeah, because the contrast might be that the way they're solving those problems now is by consulting, giving advice by the hour. And you're saying we can put some infrastructure or some tech or some systems or some processes to make that both maybe more scalable, but also when it comes to the exit of that business.
Darren Clark (03:00.534)
it.
Michael (03:17.205)
maybe some down somewhere down line, there is that asset you referred to rather than just like a more intangible set of know how.
Darren Clark (03:25.29)
Yeah, yeah, and I think because they would a lot of them had manual operations for doing whatever, you know, the industry they're in Being able to automate that not only for themselves, but again for their Colleagues in that industry and for the clients that are in that industry to create automated ways and again to create additional revenue streams Either to be a part of the company that they already have or to be a you know, a separate company that they can
build the value in.
Michael (03:56.073)
license the IP out or something along those lines. Yeah.
Darren Clark (03:59.118)
Yeah, majority nowadays it's monthly software as a service, monthly subscription type of rates. Some are transaction based, but very much recurring revenue. Never really sell it once and then never sell it again.
Michael (04:19.253)
Yeah, yeah, yeah. Now that's good. Like that, you know, this is, and I did in reading some notes and having a discussion with you prior to today, it was very clear that to me that your experience as a founder did inform the way you want to work with the clients you work with now. I think you went through some, like we all do, some challenges and some pain and
And then so helping building software, it's about building revenue and about building an asset, but it's also about ideally making life easier. It's never easy, but making it a bit more smoother in your day-to-day operation of a business. And I think that's a great start point to try to help another client or another small business.
Darren Clark (05:11.342)
Yeah, I think it's all kind of look at as refining what you do over your own career. Like my first agency that I had business partner, we did things in certain ways. And they were the best practices and they were the industry norms. And so that's what you followed. After leaving that and now starting up DazLab, which there are some similarities there. But when I started DazLab, I looked at went, what did we do before that I really don't want to do again? And what were the things before?
Michael (05:40.507)
Yeah
Darren Clark (05:41.238)
that I'd really like to do more of so that we can do it better, not just for me, for the business, but also for the clients that we help. How can we provide more value in a more efficient way?
Michael (05:57.133)
Yeah, I think that there is a, I think there's a disconnect often. You know, you see lots of offers come in. If you're running a business, you're getting approached all the time, you know, to build new things and outsource this. And, you know, but when you can talk to someone about what you do, but also bring to that your experience.
as a founder and having those moments of frustration. I think what you do is combine helping someone better run their business with then selling them some services, however you build them and yeah.
Darren Clark (06:39.307)
Yeah.
Yeah, I'd have to agree with that. Like this, when it comes to building any startup or any new product, for instance, there's many different components of that. It's not just I've got an idea. I need to build a piece of software. That's really the first part of it. But then it's how do you plan in for the support and how do you plan the marketing afterwards and how do you plan in all of the upgrades? Um, because we've gone through that a couple of times before, and we go through it with our
current clients, it means that we can advise new clients on all of those things. So it's not just advising on the one software build part, but it's about how do you, how do you look at, you know, making the best efficiencies of hiring the right staff? How do you, when do you outsource, when do you hire full-time, all of that kind of thing.
Michael (07:25.092)
Yeah, yeah.
Michael (07:28.597)
Otherwise, you risk having this theoretically great piece of software that sits out in isolation from the rest of the day-to-day of the business.
Darren Clark (07:37.198)
Yeah, very much so. I think that's probably one of the pain points I see a lot and I've seen, we've seen a lot in the past is that there's a vision of I've built the product, but then where do you go next? And I suppose that's with any business, just the launching the product or launching the business is one thing. Keeping it running and keeping it expanding and keeping in front of top of mind of your potential customers. That's a
That's triple the amount of work.
Michael (08:07.469)
Yeah, and the energy that you have going into something new when it's fresh and exciting, it can often be a lot different to two, three, four years down the line where that is waned. And then you're trying to sustain the business. And that's where I think a lot of, it does prompt and it's good. It prompts some thinking about what do I wanna do with my business.
Darren Clark (08:25.656)
Yeah.
Michael (08:37.949)
And if you think deep and long about what you want to do with your business, that's a good thing. And the outcome might be that you maybe say, I'm out, I want to move on. So maybe this is where I think there's a lot of opportunity to help owners just rethink what's possible with their business and tech and software and is going to be a very significant part of any.
or of most restructures of a business, if you want to call it that.
Darren Clark (09:14.922)
You bring up a good point about starting again. So when we sold the agency, I thought that was amazing. And it was amazing. But then the whole starting a new business again, it was tough. Like trying to find a new proposition, trying to find new customers, trying to find a new brand. Like it takes a lot of energy to go through that. Sometimes I think you need to look at is the exit, is exiting.
Michael (09:36.398)
Yeah.
Darren Clark (09:42.238)
and selling everything a good thing is selling half of a good thing is restructuring a good thing. Because, you know, when you sell a business, you only have the one chance to sell it once you can't. It's once you're out, you're out and you're starting again from scratch. It's it's a bit it's a lot different.
Michael (09:51.929)
Yeah.
Michael (09:55.849)
Yeah, yeah, that's how did how did that first sale come about? Was it was there a plan to build an exit or was it just serendipitous that you were doing something good in the market and somebody approached you? How did it come about?
Darren Clark (10:16.446)
I don't necessarily think we were looking, you know, we didn't start the business with the idea of looking to have someone buy us out. We were two good friends who started a business and thought we love what we do. But you know, once we got to the 10-year mark, 11-year mark, it became, you know, our lives had changed, everything else had changed. So we did start to look and but also I think, I think we kind of started to look after we already got approached as well.
people found out what we did, they liked what we did, they found out this is how we could fit in. We're what we called a full service digital agency back then, which meant we did software development, we did the digital marketing, we did campaigns, we did all of it. And some of the, we eventually went to JWT and WPP and they looked at us and said, we don't have digital in our team. And so it was a nice fit for us to get into that spot.
Michael (11:09.569)
Yeah. JWT is a very significant global company too. Right. That's a global multinational. Is that right? Yeah.
Darren Clark (11:12.674)
So at the start we didn't have to.
Darren Clark (11:20.458)
Yeah, yeah, that's right. And that was a lovely moment to, and in some ways was lovely moment for them to reach out and say, we'd like to talk about this with you. It was, you know, at that time was a bit of pat in the back to realize we have done something right here. We have done something well for someone like them to notice.
Michael (11:41.037)
Well, that's true. But I think what you were saying earlier is that you may have had a few moments since, in starting your second one, where you go, maybe there were other ways to cut, you know, or deal with the first one. Is it, well...
Darren Clark (11:59.782)
Yeah, yeah, I think in hindsight, you always look back and think, what if I did it this way versus that way? I still think where our company was at the time, the environment for digital agencies was very much changing. Everyone was going niche. Everyone was, you know, if you're a digital marketing, you would be digital marketing or you're a software house or you are this or you're that. We kind of did everything. So.
Um, in some ways we would have had to have moved or changed the direction of the business at one point. So it fitted the new market that we're in. Um, yeah, I suppose that's where DazLab comes in. We're able to look at DazLab and go, oh, I know exactly what we want to do. We just want to do custom software development. Don't want to do the digital marketing. Don't want to do the campaign, just the software dev. So we could really specialize in what we love.
Michael (12:39.638)
Yes, yeah mate.
Michael (12:51.637)
Yeah, yeah, yeah.
Yeah, yeah. Yeah, look, this is, you know, the reflections you have and that you are now sharing with other owners are really important because mostly owners will have one business and they may or may not sell it. They may wanna sell it and can't, but that's, you know, there are serial entrepreneurs who start, you know, talk about building to exit and, but you know, a lot of...
A lot of others are really, you know, one owner businesses, and for them, you know, and at the end of that, there is, you know, there's a pathway to something else. A lot of the time it's into retirement or it's into, you know, maybe into employment in somewhere else, but, you know, we're not talking about, you know, the majority of people.
Darren Clark (13:34.764)
Mm.
Michael (13:54.289)
going through the exit experience five times over their life. You know, and that's why what you, you know, those reflections are so important, more valuable to other owners. And, and, you know, I think you're also, you know, you referenced it. And sometimes there's a time when you, even if it doesn't suit you or the timing's not right for the, from the market's perspective, what you've got is, you know, is hot. It is the right. And so you need, that's a.
Darren Clark (13:58.894)
Yeah.
Darren Clark (14:03.988)
Yeah.
Darren Clark (14:21.899)
Yeah.
Michael (14:24.269)
That's another trade off that maybe things, you know, if you don't do that, maybe things will get harder because a big.
Darren Clark (14:31.302)
Yeah, I think that's why my business part of the time was, you know, and we looked at it was that it was going to get harder if we continued to do what we do. But it worked out, you know, it was a good end. I think with the DASLab stuff that we're doing, I'm not actually looking at it. It's funny, I look at the way we set up our accounts and all the lessons that we learned from the exit before. I look at the way I've set up the accounts and there's so much more structure in there.
Michael (14:39.417)
Yeah.
Darren Clark (14:58.882)
So that would be easier if someone did want to come and buy the company. But I don't actually, this isn't one that I want to sell. I kind of it's a service business, which I'm enjoying working on over time. I don't have a due date if I want to sell or if I want to sell it. But we are working on another startup moment that should be launching around April that definitely would be a product that we are that, you know, that has an exit plan before we've even started.
Michael (15:27.026)
Yeah, yeah, yeah. Well, yeah, yeah. Well, and you're already seeing that as something that could be compartmentalized and sold off, right? Without affecting, that positioning, I do wanna ask you about what you learned and what you might do differently, you know, if you had your time over, we don't, but just to reflect. But also, the position you've...
Darren Clark (15:27.53)
a game because it's a different product.
Michael (15:53.069)
you know, you're moving much more towards where the business is well set up. It is, you know, better placed if someone did knock on the door. You don't want that to happen, but that's a much stronger position to be in when you feel like the business is saleable, but you don't want to sell because you're living your own philosophy of building in...
Darren Clark (16:13.467)
Yeah.
Michael (16:19.393)
you know, such the business, you know, you're managing it and it's producing a good return and you know, they're under no stress on their illusions.
Darren Clark (16:28.294)
Yeah. I think the difference, so with DASLA, but very much with the agency we sold, we were so much in the business. We were working day-to-day on all the projects. One of the things we learned during the sale process was, what would happen if we removed you out of the business? Could it run?
Yeah, it could. We did have a team in there that could run. There was some things that we had to extract ourselves away from in the months leading up to the sale and shortly after. And I suppose that's one of the learnings with the new business now is that it's all been set up on the premise that I'm not the one spending 80 hours a week stressing about all the little details. Like we have.
brought in processes so that things are repeatable. We've brought in people to work in those processes. So if we did sell, the definite answer to that question would be, yes, of course, you can run it without me because I don't spend 80 hours a week on it, which is separate to the selling up of the books.
Michael (17:44.321)
Yeah, so just, yeah, so you're, you know, rain making, getting work, you know, steering the ship, and you've got a more of a team below you now to do the components of the work. That's what you mean by you not being, yeah, yeah.
Darren Clark (18:02.375)
Yeah, and even the sales process, we're starting to engineer that so that again, there's only one part of that I'm a part of. Again, so that I'm not the roadblock in a lot of ways. The team can start to grow of its own accord without any one person being a roadblock.
Michael (18:16.673)
Yeah, yeah.
Michael (18:22.145)
Yeah, yeah. I mean, it's probably that, you know, in the sale transition of any small business, most typically the number one challenge to address for the seller is, and for the buyer, is what happens to the business when the seller's not there. And if it doesn't break, then it's more attractive to buyers. But...
Darren Clark (18:39.554)
Kiff.
Darren Clark (18:44.223)
Yeah.
Michael (18:52.649)
If you follow that line of logic, it's also more attractive for the owner to not sell if they don't need to be wound up in everything day to day. That's what, you know, this is where I think the logic is, you know, building to exit is so much of it is about, you know, systems and processes, which is what you do. You're helping owners do that. But then the necessity or the...
Darren Clark (19:04.062)
Yeah, yeah, you're right.
Michael (19:21.177)
the pressure to sell is reduced. And I have these discussions often with owners about, well, if you do sell your business, what do you do with your time? But also, can you find a similarly attractive return on whatever you might get out of the business where you've got a business that is largely or significantly running.
Darren Clark (19:24.194)
Yeah.
Michael (19:50.145)
without you working 80 hours a week, as you said.
Darren Clark (19:53.986)
Yeah, it's a good question. If you're only spending five hours on a business and it's generating good income for you, if you do so, you've got to start again sometime. Like even if you're only working five hours a week on a business, you're still thinking about it. You're still planning for something to happen to something that happened. Like there's always, it's still on your mind, which as long as it's not an overbearing waste, then
It does break the question, would you sell or would you not? Is it better just to be kept or do you really want the money? And it depends, I suppose, how old you are. Do you want the money to buy a bigger house, a bigger holiday, you know, a holiday house or, you know, can you use that money somewhere else for something else that actually outweighs the need of running it every day?
Michael (20:38.146)
Yeah, yeah.
Yeah, and that's, I think a pretty overlooked part of what we might call exit planning is, let's gear up the business, make it look attractive, do all these things, but what do you do as the owner afterwards and there's a side, financials aside, it can often be a big void, which is, and if you're,
feel wide in a particular way. You know, I strongly suggest a lot of people might be, owners might be better to restructure their business and stay in and have, you know, whatever they get from it. Long as it's within their, it works for them, however that's measured, then that's a really positive outcome. But it does, you know, it doesn't just, you know, come.
Darren Clark (21:37.976)
Mmm.
Michael (21:41.529)
Sometimes it gets prompted because more and more what happened to with you and your partner inbound inquiry about selling. Oh, this is interesting. That happens more and more, but it doesn't necessarily, owners still won't deal with that always in the right way. They can get very excited, very emotional. This could be an easy out, but
and I think some owners regret it. Others, it then becomes a line in the sand for war, you know, and a good place to start to make decisions about what do I wanna do and how do I wanna run the business.
Darren Clark (22:13.89)
Eh.
Darren Clark (22:24.202)
Yeah, yeah, and how to stop the depression if you don't have anything to do after the business. Because it's because you got all of a sudden you've got time on your hands that you didn't have before without the social contact that you normally have day to day with everyone that you work with.
Michael (22:30.605)
Well, it is a-
Michael (22:41.937)
It is absolutely, and if anybody's listening, that is a real factor to be thought about, discussed, get the right advice, counsel. I mean, it's hard and lonely enough in a small business without these are then major decisions that it's good to have external counsel.
It's good to have the perspective of other owners like we're getting that from you today. And but there are ways to navigate those that opportunity when someone knocks on your door a bit better.
Darren Clark (23:23.106)
Yeah. One thing that does come to mind about the sale process was ours took, I think ours is nine months or it was quite a long time. And you're mentally thinking of all of these things that happened during the exit. I've got to send this piece of paper, I've got to send that piece of paper. What's the final number going to be? Is there going to be earn out? So how long do I have to stay? You've got all of that. But you forget that you've got to run the business every day.
you've got to continue to grow the business every day because where you don't want to be is in a situation where you haven't been growing the business like the years before. And then the deal becomes much more important for it to happen. And you've kind of put all your eggs in one basket thinking about it. I think that the idea would be to put more weight on just keep on running the business as you would and try and
more of an 80-20 relationship versus a 20-80 relationship, where the 80 is on still running the business and still giving yourself options, because it's just like the buyer buying you, you've still got to sell it. And so they might decide the last minute not to buy. You also want to be armed with a great business that maybe is better than when you first started the due diligence. And then you can also make the call and go, well, maybe.
Michael (24:26.189)
Yeah.
Darren Clark (24:49.642)
Maybe I find something else for it, whatever it might be.
Michael (24:54.905)
It's very much on the money, Darren. Particularly when the process starts with a call in out of the blue, and there are buyers dealing with a very large multinational agency like that, they're pretty much professional buyers, right? They buy companies all the time around the place.
Darren Clark (25:19.18)
Yeah.
Michael (25:23.329)
you know, you can get very excited. And sometimes they can make you feel very excited. And, you know, it's about, if you don't keep your foot on the accelerator, a few things can happen. You know, the advantage shifts to them in terms of those deals are always subject to due diligence or further analysis. And that's where, you know, things get squeezed. Or it just, you know, it just makes it really
Darren Clark (25:29.922)
Thank you.
Michael (25:52.345)
you know, actually quite challenging for them to buy. So that it is a real trap, but again, to go through that on your own, if you haven't been through a process like that, it's the time to get some advice from somebody experienced about what do I say? How do I play this out? Do I play it out? Do I, you know, there's a whole range of questions that should come up.
Darren Clark (26:11.055)
Oh yeah, I think...
Darren Clark (26:22.994)
Yeah, I think we had someone who helped us out the entire way. There's there is no way that we could have done it ourselves. I think mentally, you're that stressed about triple dot triple thinking about everything that what if I do this, if I do this, this like it's it was just all consuming. And again, because you don't have the knowledge, you've never been there. I think even if I was there four or five times, I would still I'd have to have someone by my side that can think clearly because obviously I'm not.
Michael (26:53.091)
Yeah.
Darren Clark (26:53.174)
You know, like you're thinking this, whatever the, the sale price is going to affect you, which means instantly your bias. So in a lot of ways you have to be removed from that decision making process and have someone beside you that can help you through it.
Michael (27:10.205)
Yeah, I wanna come back to who that was. Just on today's edition of Small Business Manor podcast, I'm chatting with Darren Clark from DazLab, and I didn't mention that you're based up on the Central Coast of New South Wales. Is that right? That's right, yep.
Darren Clark (27:29.756)
Yeah, just back from the beach up in Yabarra.
Michael (27:33.417)
Yeah, fine part of the world. Yeah, so in terms of, I forgot what I was going to ask. We're just chatting about getting some, yes, getting some external advice at a pivotal time. Who, what kind of, who did you, or not who specifically, what kind of advisor did you use through that process?
Darren Clark (27:58.694)
Yep. It was a business coach. It was someone that actually they were set up to help companies go through the process of acquisitions. He had come from an accounting background. He was actually a referral from our accountant. And he also then went from that person at the start and then
once the lawyers got involved, our lawyer was very instrumental on being that person that we could ask. At first, it was more around negotiations, the how, the what, why would it work. But once we got fine-tuning the goal, I think, and then we had an early term sheet, or I can't remember what we called then. And then the lawyer came in, and he was the one that we worked through, and he was the
Michael (28:39.461)
Fine tuning.
Darren Clark (28:55.778)
They're asking for this. No, they're asking for this. Yeah, it seems okay, but maybe we should just question this. So it was.
Michael (29:00.426)
Yeah, yeah.
Darren Clark (29:06.866)
And obviously the accountant was there, you know, at every step along the way as well.
Michael (29:09.121)
Yeah, yeah, yeah. So you've got, that's three external advisors. I mean, you've always got to have the right kind of legal advisor to interpret term sheet or the contract, because it can so easily go straight there, and you're a trusted accountant. But then someone who's got experience of fine tuning, dealing with the other party,
That's also a role that's vital, not always suited to the accountant lawyer. You've got to use this team at the right time in the right way.
Darren Clark (29:54.091)
Yeah. I was lucky because I had a business partner that we both went through it together. So we also became our emotional support for each other, as well as our partners at home. That emotional support also was kind of vital. So if you're a single, if you're selling the business and you're the sole owner of it, I think...
Michael (30:02.596)
Yeah.
Yeah.
Darren Clark (30:18.318)
For me, I might get a counselor, a psychologist to work with during the process because there are just so many things that go through your head that you need to talk to someone about just to keep yourself clear.
Michael (30:21.799)
Yeah.
Michael (30:31.513)
And I imagine there can be a lot of questions as well. Like when your partner, family, friends, everyone's pretty much interested in how the, if it is public, how's it going? But it can go up and down so many times. I'm not sure necessarily that, unless you've been through it, you could really get a handle on how topsy-turvy it can be.
Darren Clark (30:54.338)
Hmm.
Michael (31:00.345)
can be.
Darren Clark (31:03.84)
I think when you're waiting for an email that's supposed to come through by the end of the day and you keep looking and you watch going, it's five o'clock end of the day, it's 5.30, it's six, it's eight, it's 10, those are the ones that do, they do your head in. You're just constantly on edge, just waiting.
Michael (31:08.897)
Yeah.
Michael (31:16.706)
Yeah.
Michael (31:22.402)
Yeah.
Yeah, should be done by next Friday, money in the bank.
Darren Clark (31:31.082)
Yeah, that's, that won't happen.
Michael (31:33.957)
Yeah, and, you know, no, well, you know, and look at, you know, it's part of, I think it's, it is, I think for the best of intentions, you know, it's, it's just part of the, you know, it's part of the process that there's this, you know, waxing and waning and, you know, you've got that, you know, and if it's the first time, it's, you know, can be so, you know, emotionally depleting.
Darren Clark (31:48.445)
Mm.
Michael (32:00.645)
And yeah.
Darren Clark (32:02.7)
You're also buying in. We had to make sure that who, because once it's sold, we were working for these people, working with or for these people for a certain number of years afterwards. You had to get to know them and you had to know that it's right for the relationship post acquisition.
Michael (32:27.245)
Yeah, it is another very significant relationship with a different set of goals and potentially different culture and different operating systems and a whole lot of things that you're absolutely right that in that, because you can be combative leading into it in a professional way.
Darren Clark (32:53.879)
Hmm.
Michael (32:55.861)
if you are gonna be around for a couple of years, you've gotta remember that you don't wanna kind of fold on significant things. But you also, you gotta pick your battles because you're gonna be working together or under their guidance or under their leadership. And that's, you don't wanna kind of create a real chasm.
Darren Clark (33:12.398)
Yeah.
Darren Clark (33:20.414)
Yeah, I suppose some of that shows through when you're doing negotiations. If they're really going to play hardball with you and you're playing hardball with them, you got to think, is that what I want for the next two years? Or do I want someone that actually is going to be fair and go out? Yep. Cool. We'll give that and you give this and a bit of give and take. That's maybe, it depends who you are. It's what was after what you want.
Michael (33:31.053)
Yeah.
Michael (33:38.061)
Yeah.
Michael (33:44.705)
Yeah, it's a couple of episodes back, Earl Eddings came on and we chatted about that, that and many related things, but he's been through many, many transfers. He's been on both sides, but you know, he was a very big advocate for getting, as you flagged, support the right
Michael (34:13.017)
go negotiate things on your behalf while you continue to run the business, but also you're cognizant of you're going to be working and he's bought into a lot of people businesses, you know, service businesses. So they were always going to be, or generally going to be a period of transition or an out or working together. So you didn't want to go so hard that, you know, you couldn't face up on the Monday morning. So look,
Darren Clark (34:18.21)
Mm.
Michael (34:41.953)
Are we fine? We've just bailed the crap out of each other for, you know, and there are ways to do that or to negotiate without really kind of impacting that relationship that's gonna be there for a couple of years if you're earning out or working.
Darren Clark (34:43.713)
Yeah.
Darren Clark (35:01.002)
Yeah, very true. Very, very true.
Michael (35:02.473)
Yeah. I just wanted to talk with DazLab and the work you do. You talked about what you do, but I'm kind of interested just in how you might work with an owner to, how you might sell the idea to an owner that
what you do is valuable, you've got lots of domain expertise, you've been doing it for a while, but particularly if they had a mind to selling, you know, how you would talk to them about automating or putting in place software, tech, systems, whatever you do to, on the basis that it's an investment to ideally make their business easier to run and ideally
more profitable, what's the discussion you have with an owner about that?
Darren Clark (36:05.746)
I suppose we're involved earlier on in the businesses. So we're involved when they're still in the building phase. And for us, it's about them understanding that, well, this thing that you're putting money into, this software product that you're putting money into, is like putting money into a corporate office or whatever building. It's you're building an asset and that asset then has a worth.
is once it can start to generate revenue and it will generate revenue by itself, you still have to support it and you still have to have all these other costs associated with it. Um, and I think it's then about, it's just understanding that when you sell your business, you're selling part of its service now and part of it's and, you know, reoccurring revenue, which is clearly outlined and being able to divide up how much of the cost takes to run this business versus that one.
But again, it's just about building an asset so you can build in additional revenue, which hopefully then helps with the final number that you get. Because acquisition rates for a SaaS product are very different than a service product.
Michael (37:19.101)
Yeah, I think they're off the scale differently in terms of what an owner might expect if they were to sell. Yeah, yeah, yeah.
Darren Clark (37:24.842)
Yeah, yeah, exactly. Yeah, there's a huge difference in the two of them.
Michael (37:32.921)
Can you talk about a couple of one case study like to bring this to, you've got a wholesale distribution business out there or some other kind of service business. What are some of the typical things? Do you go back to, right back to first principles, what, where do you, how do you do business, almost like a diagnostic of, and then say we can automate this, we can,
Darren Clark (38:01.178)
A lot of our businesses, a lot of the clients come to us with a problem that they've noticed in their industry. That's typically where it starts. It's like, my customers have a problem with doing this. They're doing it manually. They're doing it slow and whatever it is. How can we then automate it? How can we make it smoother? Or in a lot of cases, it's more around information going out. So one client's a mental health client.
product is about sharing his expertise and his knowledge. So it helps more consumers have a better grip on what mental health is.
Michael (38:39.405)
So he's a counselor, psychologist, or, you know, yes.
Darren Clark (38:42.838)
psychologist, he's a psychologist. And so his product isn't interactions with him, his product is knowledge that he's being able to share out to the world. And so that's, you know, and obviously, you sign up and he's helping businesses look after this, their staff's mental health. So for him, it's, you know, that's where the recurring revenue is, it's less about automation to do with his business. It's, again, more to do with
you know, making more money from the information he's got. Other businesses, it really depends. Most of them, they're providing value through knowledge or they're providing value through interactions, providing an improved process on something.
Michael (39:28.705)
Yeah, but they are, it sounds like, there's a lot of that, how do I solve a problem type entrepreneurialism where they're already working with clients and they're saying, and so the case of that psychologist is actually partly his problem as well, because I know a lot of stuff, but I can only do six hours a day, four days a week. So there's a cap on that unless you.
Darren Clark (39:39.714)
Yeah.
Michael (39:59.147)
can find another way to deliver that information.
Darren Clark (40:02.326)
Yeah, another client was they were doing, they advise and consult on how to manage a big compliance process. And it was all manual paperwork. And so the platform that we helped establish with them is all around automating that and having it all, all the compliance documentation and checklists and signing approvals all stored in one digital place available on mobile desktop.
apps. And again, that helps his clients do their compliance job a lot faster. And so, yeah, there's again is a reoccurring revenue model through monthly subscription by per user increments.
Michael (40:50.093)
Yeah, okay. In terms of the cost and ease with which you can access development now compared to say 10 years ago, is it more approach? Tricky question.
Darren Clark (41:00.023)
Yeah.
Darren Clark (41:03.414)
I think we take a different approach. Like I said, we hide everyone in Australia. The problem is the Australian software developer rates have gone up a fair amount. You've got people like Canva who are trying to hire 100 software developers in the one go. You had CBA last year doing the same thing.
Those big guys taking out hundreds of developers every week, it's very hard to hire staff throughout Australia. So with DazLab, our approach is to instantly look global. So we have no real country of preference. It's about finding the most skilled person that we need. And our process is all remote. We've been built to be remote from the beginning. So.
Michael (41:40.005)
Wow
Michael (41:58.757)
But yeah, yeah. So you see a big challenge in recruiting locally because it's not, I have this discussion often in with businesses, more industrial businesses or manufacturing and there's a lot of, manufacturing has come back significantly from the doom and gloom of 10 or 15 years ago. But, you know, and it.
Darren Clark (42:01.94)
Um.
Michael (42:28.665)
probably across many industries recruiting people and is a major hurdle. Manufacturers going out to get boiler makers and particular trade skills are competing against in Victoria, the big build. And so they, you know, a trained tradesman, trades person can go off and earn much more money. And so these...
Darren Clark (42:50.915)
Yep.
Darren Clark (42:56.279)
Yes.
Michael (42:57.921)
manufacturing businesses with opportunities, they go begging because they can't get people.
Darren Clark (43:01.782)
Yeah. Yeah, yeah, that's it.
So you can either sit and complain about it or you've got to find a way to get work done for your clients. So for us, that avenue is well... And look, with COVID, after COVID, everyone wants to work remote anyway. So hiring a software engineer anywhere is no different than hiring a software engineer nowadays in Australia.
Michael (43:09.161)
You're
Michael (43:35.778)
Yeah, yeah, yeah.
Darren Clark (43:36.758)
Everyone is remote in that industry.
Michael (43:38.977)
Yeah, in services or yeah, yeah. The hands-on stuff, it's different. Yeah, yeah, yeah. I also, we've really covered a lot of ground and I think we're making a strong case for really looking at the, right now,
Darren Clark (43:44.458)
Hands on, very different though, yeah, very much so.
Michael (44:08.085)
exit planning or not, making a case for evaluating ways you can make your business more efficient and more productive and more profitable. And from there, my hope is that more owners do that. And then at some point there might be a trigger that you get approached. And if you're doing a good job and your business is investing in
better processes and better tech. In a lot of industries, you will be on the radar of a bigger company in your supply chain or in your industry. And so, and it just feeds into a much stronger position that you have if and when you decide you might wanna sell or you might wanna entertain a discussion with a potential buyer. And that's.
Darren Clark (45:03.902)
Well, they also come from partners and possible customers as well. They look at what you've got and say, well, why don't you just join in with us?
Michael (45:10.572)
Mm.
Yeah, yeah, that's, you know, that's, that's absolutely right. And, you know, it's, it's a real, you know, it's a real case for you got to have, you got to have a, you got to have a plan for what you might say if someone calls, you got to have a plan for when, when might be ideal for you to move on. And that can be, that's different for everybody. Having something to move on to is very important as we talked about not having a void, but all but
But today, it's about how do I get more out of my business today with an investment in? Don't leave it till you start a discussion about selling. Do it now.
Darren Clark (45:58.487)
Yeah, it is. And it's that isn't it? It's just the discussion. It's never about, you know, you don't want to do something that you're just not sure of. And you, but you're never going to be sure unless you have that discussion to learn what are the things you could do to make the business more valuable. So when it does come time to sell that it actually is, you know, there is something more
Michael (46:21.697)
Yeah. There's the doggy. Welcome to the podcast. Raukas. Yeah, they're great. They're awesome dogs. In terms of your... I wanted to close out with a couple of...
Darren Clark (46:29.948)
Yeah, we've got a border collie and he's a little bit active sometimes. He thinks he can catch birds.
Michael (46:49.489)
your reflections on a reflection on as a an entrepreneur, business owner founder, you know, you've gone out of one business, you've started another one, what are your top couple of takeouts for another owner that is maybe midway or you know, maybe they've started? What are your
Darren Clark (47:13.998)
Yep. Play to your strengths. If you're good at one thing and you know you're not if you're not good at marketing, if you're not good at brand, get someone into.
Darren Clark (47:34.08)
to help with those things.
Michael (47:35.593)
Yeah, yeah, that, I think, I think that's, you know, that's, you know, being consistent all the way through with and it's the principle of your business to, you know, to identify things that can be done easier by somebody else. Yeah.
Darren Clark (47:52.01)
Yeah, exactly. Exactly. Like my, you know, helping solutions is my thing, but sales and marketing, I still struggle a little bit with understanding the methodology behind that. So we bring people in to help with that. It's otherwise, you can't grow a business if you don't find some way to get over your weaknesses.
Michael (48:14.177)
Yeah. So do you use anything like, you know, some ongoing advisors? You had a coach help you with that. Who do you tap into now?
Darren Clark (48:23.422)
Yeah, so I've got a sort of fractional CMO on board from the business where actually I'm in the process of... Yep, yep, yep. And at the moment I'm not quite ready for a CFO to help us out. I'm sort of stretching, I'm almost stretching the limits of the accountant.
Michael (48:34.681)
So Chief Marketing Officer, is that CMO? Yep, yep.
Darren Clark (48:52.426)
I'm playing with some different tools to help with things like forecasting and budgeting. See what I can do myself before I need to bring some, you know, coaching. I've had a business coach for me about a year and a half ago, and we helped put together a whole lot of KPIs and we've moved to the next level. I think it's getting to probably the middle of the year. I think we would be finished that cycle of things that I needed to do and then maybe bring in someone else at that point to help out.
So understand which is the best way to grow.
Michael (49:19.907)
Yeah.
Michael (49:23.849)
Yeah, yeah, so not yeah that you know, there are different stages of the business. Different, different council external council, right? Yeah, so you don't you know, you don't have to set and forget on that either. Just In closing, Darren, I wanted to ask you if you have any particular Small business Champions or
Darren Clark (49:35.452)
Yeah.
Darren Clark (49:38.818)
Hmm.
Michael (49:53.805)
people that you, you know, you, you take, you read their blogs, you read their books, you know, anything that, you know, has really been a standout for you in the last.
Darren Clark (50:07.221)
There's a podcast called Startups for the Rest of Us, which I really like. It's the guy that made Drip in the US, which is an email automation platform. He's got 600 podcasts, which are actually really interesting ones to listen to. Otherwise, LinkedIn is my favorite. I find products that I like, and then I find the founders that are...
Michael (50:13.065)
Yeah.
Michael (50:18.446)
Yeah.
Michael (50:22.34)
Yeah.
Darren Clark (50:32.406)
very vocal and talk about other things other than just their business. Smart Lead is a good one and the guy from Cake Equity has got some good stuff out there as well.
Michael (50:38.005)
Yeah, yeah.
Yeah.
Michael (50:44.757)
Yeah, yeah, on employee ownership is that cake equity? Yeah, yeah, yeah. No, it's, yeah, but just finding time to actually absorb some external perspective is so important.
Darren Clark (50:58.27)
Yeah, yeah, as you've heard my dog, he's quite loud. So he needs a walk every day on the beach. So, you know, audio books and podcasts are the only way that I can consume information. I sadly haven't I haven't read a book for quite some time, but I've got two young kids and they're busy sports, social lives and everything else. So audio books and
Michael (51:03.745)
Ha ha.
Michael (51:16.941)
Yeah, yeah, well, that's what, yeah, audio books and podcasts become, you know, maybe drown out a little bit of the border collie and then educate yourself while you go. Look, it's been, thank you so much for taking time to share what you've shared today, Darren. I've really, I've enjoyed it and I'm no doubt a little resident.
Darren Clark (51:28.13)
Hahaha
Darren Clark (51:31.624)
Hahaha.
Michael (51:46.241)
resonate with other owners because it's difficult every day and there's some gold in there. Thank you for that.
Darren Clark (51:58.806)
No, thanks for having us on. It was good to chat.
Michael (52:01.705)
What, where's the easiest place for people to make contact with you?
Darren Clark (52:09.13)
Just go to our website, Dazlab.global. D-A-Z-L-A-V dot global. Or you can email me at darren at Dazlab.global. Either of those two are good places to reach us. All LinkedIn, you just find me under Darren Clark. Yeah.
Michael (52:20.069)
go up. Yeah, all LinkedIn. Yeah.
Michael (52:31.265)
All right, well look, go well. And again, thank you for your time on Small Business Bands podcast.
Darren Clark (52:39.084)
Thank you very much.