Founderoo caught up with Rich from Kaddy, and his story's a bloody cracker. He's started several successful businesses over the years, with a theme of helping Aussie's enjoy a good drink.
He's had success in coffee, cider, craft beer and now uses all his knowledge with 'Kaddy,' a tech platform disrupting the Aussie drinks industry.
Rich, what's your backstory?
I grew up in the quiet suburbs of Turramurra, actually only a stone’s throw from my co-founder Mike so we have known each other for more than 25 years.
We both went to school and then university together, at Sydney Uni. I studied a Bachelor of Commerce (Liberal Studies) majoring in Finance, Economics and Econometrics and minoring in Japanese and Psychology. Whilst at Uni I got an Internship at UBS Investment Bank on the equities trading floor then a grad job in ECM (Equity Capital Markets) where I spent 3 years post-uni.
I took a year off in 2007 after my father passed away and went travelling through Central and South America with my surfboard. I then came back to Corporate Life at Investec in their Corporate Advisory / M&A team where I spent 2 years.
In 2010 I got the entrepreneurial itch and decided to quit Investment Banking and start my first venture, Batlow Cider, before going on to start Will & Co Coffee, Capital Brewing and now Kaddy. The rest is history!
Tell us what your company does?
Kaddy is a wholesale beverages platform that helps venues (such as bars, pubs, restaurants and bottle shops) discover, connect and trade with suppliers across craft beer, spirits, wine, seltzer and cider.
We remove the tedious barriers to trade and simplify the wholesale ordering experience with a simple to use tech platform.
For venues, we save them time, simplify their processes and give them access to a large range of over 350 quality suppliers with a single account. So they never have to fill out a credit application ever again.
For suppliers, we help them streamline their ordering process, give them access to a new channel of customers/business and pay them guaranteed within 3 days so they never need to send an invoice or chase a dollar.
I have spent the better part of the last 10 years in the wholesale beverages industry and whilst there has been a lot of innovation in brands and products, and the number of suppliers has exploded, especially at the craft end of the market, the infrastructure to support these businesses and the way wholesale was done has not changed. There’s been little to no tech advancement so we saw an opportunity to change that.
How did you come up with the idea?
Mike (my co-founder) and I caught up for a beer at the end of 2018 after he got back from a 6-month travel stint after spending 6 years at Uber.
We had always kicked ideas around about what problems we could solve. We came up with the idea from a couple of different perspectives - he co-founded Uber in Australia and ran their Operations for Australia/NZ so he saw how messy ordering and payments were for the venues he was working with across Uber Eats.
It wasn’t uncommon for chefs to text orders for their produce in the middle of the night. From my perspective having built 3 beverages businesses from the ground up, I learnt first-hand that building a successful wholesale business is bloody tough work.
Apart from great products and a brand story you need a route to market, willing customers and of course cash flow.
The market is very fragmented and there has been a lack of development in the tech infrastructure that supports the wholesale beverages industry - actually B2B itself is 5+ years behind B2C. B2B is just slower to innovate and adapt as a whole, so these weren’t just wholesale beverage industry problems. Kaddy helps address all these things whether you’re a startup or scaling up for growth in different markets.
How did you go about launching and building the business?
We spent a lot of time initially catching up with suppliers and customers and understanding their pain points to see what areas were in the most need of solving.
We had our own ideas about where the pain was most real but we wanted to gather more data. We then recruited a couple of dev consultants that were in between gigs and they helped us build an MVP (minimal viable product) that we could pilot with a handful of customers and suppliers. That took us around 2 months then we were ready to launch a beta product. Initially we needed capital (our own funds), some willing customers and suppliers to work with us in the initial pilot and a bunch of hypotheses to test.
How have you grown the business?
We have grown from that initial handful of customers and suppliers to a platform with over 1,300 customers (venues) and over 350 beverages suppliers.
Initially, we called on a few favours from people in the industry to give us a crack, then as the product has developed there has been a lot of word of mouth and referrals, probably the most important thing in B2B is positive word of mouth/’social proof’.
We also have an awesome sales team that we have built out over the last 2 years. Originally it was myself and Mike, now we have a team of 5+ focused on acquiring new customers, onboarding and delighting customers.
Marketing in B2B is a little different to B2C and the channels used by our customers and suppliers are quite different to consumer channels. Email marketing is our biggest tool, as well as phone and even offline channels.
PR is also important given the social proofing element. In terms of lucky breaks, when COVID struck we lost half our customers overnight which was a bitter pill to swallow, but we pivoted slightly to focus on the part of the market that was trading, actually quite strongly, so we got through it all.
We were also raising a $3.5m funding round during the first wave of COVID, but fortunately, we were successful in getting that done and moving forward with our very supportive investors.
What’s your biggest selling product?
Our Kaddy platform is our only product at this point. We're a product-led company, and the amount of engineering work that goes into building the platform is immense. We have a world-class dev team of 6 engineers, all locally based in our Sydney office. We're really happy with the product we've built and how it's evolved - it's only going to get better and better.
What have been some of your biggest failures along the way?
When we set out to build Kaddy we thought order management and managing payments were the most important matters to customers and suppliers. However over time we have realised that for suppliers, accessing new markets and new channels of customers is really important.
They are also eager to get their brands in front of more customers where they can and amplify their product/brand awareness. So I wouldn’t call this a failure, the opportunity probably just got bigger with what we’re doing, as we have realised there is more to solve.
What day to day digital tools do you use?
We use a bunch of helpful tools. Zoom and Slack for communication, Google docs for collaboration, HubSpot for marketing/CRM and Vidyard for video. We’re also active across the usual social channels (Instagram, Facebook and Linkedin).
What book has been a great inspiration to you as a founder?
Screw it let’s do it by Richard Branson
I read this flying between Thailand and Laos in early 2010 and then resigned from investment banking 3 weeks later to start my entrepreneurial journey. It was a timely catalyst for me wanting to start my own gig.
How to Win Friends and Influence People by Dale Carnegie
Business is about dealing with people and to get traction and build a brand you need to work well with all kinds of people. This is a staple.
The Magic of Thinking Big by David Schwartz
Teaches you to be bold and have a solid crack. Super helpful in the early days when starting a business is testing your metal and grit to succeed.
The e-myth by Michael Gerber
Regarded as one of the best books of all time about entrepreneurship and gives you a great insight into what it takes to build and scale a business.
The Alchemist by Paul Coelho
My favourite book of all time, full of wisdom that can be applied to startup life.
Tribe of Mentors by Tim Ferriss
Comprised of short interviews with successful people from all walks of life. Some nuggets of gold in there about life and business.
My Podcast picks are:
Masters of Scale by Reid Hofman (founder of LinkedIn)
Some great insights and stories on people that have built interesting and successful companies
How I built this by Guy Raz
Super inspiring interviews with company builders focusing on the problems they were solving and how they got started and grew.
Invest like the best by Patrick O’Shaughnessy
One of the best podcasts for any startup founder, particularly as you’re scaling up, raising capital and focused on growth.
Equity Mates with Bryce Leske and Alec Renehan
A fun take on equity markets with some really interesting and insightful interviews from company builders, CEOs and experts across different fields
Acquired by Ben Gilbert and David Rosenthal
Tech company focused, but really interesting content about company building.
What quotes do you live by?
“When it’s not fun move on” - Richard Branson
“When you’re going through hell, just keep going” - Harvey Penick, a legendary US golf coach
What do you do to look after your mental health as a founder?
I have a pretty active lifestyle between being a startup founder and a freshish Dad. I train every morning and run a group training session with some mates a few days per week. I run in the 440 Run Club when I can, play golf, ocean swim and surf when I can. I also meditate with Headspace, which was a game-changer when I was sleep-deprived as a new parent and startup founder.
In a few words what does it mean to be the founder of a business?
" It’s a tough but rewarding journey. It will test your patience, resilience and will to succeed but it’s absolutely worth it."
What are the biggest pieces of advice you’d give to other founders?
"Just start. That’s the hardest part. Also, don’t fear giving it a crack. Worst case you can go back to your day job. The door is usually open if it doesn’t work out for you as a founder. You’ll learn a tonne starting a business, so have a go."