From the streets to $15 million: How Tyler Spooner led The U Group & Co to 8,000% revenue growth
Co-founder of The U Group & Co shares his journey from living on the streets to founding a tech startup.
Tyler Spooner has experienced his fair share of ups and downs. Orphaned by age 10, Spooner spent “a bit of time living on the streets” as a teen before migrating from New Zealand to Australia at age 18. In Perth, he launched his first business — a commercial cleaning company — before eventually taking the leap into the world of tech startups.
Along with co-founders Brenda Lai and Jason Gan, Spooner launched The U Group & Co in 2018 — an ethical data company that has since expanded in four countries. After five years, many of which Tyler worked for free while sleeping in his office, the company has finally turned profitable with an impressive annual revenue of around $15 million.
In an interview with SmartCompany Plus, Tyler Spooner chats about his leap into startups and the lessons he’s taken from the business world.
From door-to-door salesman to tech startup founder
Back in the year 2000, at the age of 18, Spooner moved to Western Australia to join the mining boom. But his high hopes were dashed not long after arriving when he discovered the boom had already gone “bust”, and he couldn’t get a job.
“I was too old to get hired at KFC or McDonalds, so I ended up getting a job working nights on the train line, cleaning up after a fatality or chemical spill,” Spooner says. “From there, I started a recycling business that I turned into a commercial cleaning business.”
While running his cleaning business, Spooner says he “basically knocked on every commercial door in the CBD”. An experience that taught him the importance of connecting and talking with others to gain insights — “I’d basically hang around and try to get information about what they were looking for.”
Later, when he launched his first app, FeedMee, Spooner used this same door-knocking technique but applied it to LinkedIn. “I’d spend hours on LinkedIn,” Spooner says. “I’d just connect and talk to as many people in the industry as possible.”
These connections — as well as books and in-person groups – helped Spooner bridge his knowledge gaps. “To be honest, I lost a lot of money at first,” Spooner says. “I didn’t know what tech was, so I didn’t know what a startup was. I read books that talked about startups, but it didn’t make sense to me because I was in small business. And then I sunk a whole of money into developing a mobile app for FeedMee but didn’t understand that I had to have it on the Apple and Android stores – that it needed a back end and a front end. I had no idea and was completely drained.”
Despite his initial skills gap, Spooner’s FeedMee app helped to donate “around 20,000 meals” to people in need, supporting the types of charities that helped him out in his own times of need. But despite the best of intentions, he could never make the business “sustainable”.
So, he shut it down and started a hand-picked grocery delivery service which “turned over a quarter of a million dollars before we realised the logistics were near impossible.” But the experience wasn’t wasted. His venture into groceries led Spooner into the world of customer analytics – the specialty of The U Group & Co.
The U Group and ethical data procurement
The primary offering of The U Group & Co is a consumer-led market research service called ReceiptJar. The app allows consumers to sell their receipts to The U Group & Co, where the personal information is removed and then “used to help define market trends and consumer habits” to corporations and market research groups.
First launched in Australia in 2019, ReceiptJar expanded into the USA in 2021, then Brazil and Canada in 2022. The expansion decisions, Spooner explains, were primarily based on market sizing. “The largest market is the US, so that was a no-brainer for us,” he says. “Brazil is what we call an emerging market – it’s growing fast, but the economy is still emerging. And then Canada was a copy of Australia but a little bigger – we expanded there because of client demand.”
All of that upscaling was made possible by staying mainly self-funded. “We didn’t raise much money; we used profits and contracts,” Spooner says. “We did a really good job in Australia and were able to take over loans, sell into large organisations in the US, and then use the profits from the contracts to grow. So we would pay an upfront amount, set up, and then collect an ongoing fee rather than having to raise a lot of money. A lot of companies would have done it the other way.”
And this approach to funding has finally paid off, with The U Group & Co recently experiencing 8,000% revenue growth, pushing them into profitability within the last 12 months, resulting in an annual revenue of around $15 million. This financial change means Spooner can now be paid for his work and no longer has to sleep in his office.
“During Covid, there was no funding, and we were running out of cash,” Spooner says. “I think my CTO went down to about a $30,000 salary – everyone was on low pay – and I started sleeping in my office to keep the ship alive during research and development until we could sign contracts.”
Scaling for growth
Strategic growth has played an important role in the success of The U Group & Co.
“If you’ve got a mobile application or something that needs to scale, you have to find a way to organically engineer the product to grow,” Spooner says. “Otherwise you’ll have a hard time because you’ll end up spending all your money on Facebook ads, so one of the biggest obstacles to overcome early is: how do you get distribution of your product in a way that you don’t have to pay from it.”
And ReceiptJar has managed to achieve that growth. The app grows organically by around 10,000 users in a country per week and processes about 350,000 receipts daily. It also retains those using the app, with Spooner saying it’s in the top 75th percentile for retention.
From the B2B angle, Spooner says the secret to scale is “touching a bit of an organisation’s money.” He says, “You need to ask yourself: Are you reducing their costs? Are you helping them sell more products? You need to get into that sweet spot where you’re either connected to their revenue or increasing the cost; then, they’ll love you and keep coming back.”
With their strategies and expertise now firmly grounded, The U Group will expand into the UK with a new market-research product called Booksy. The app will connect consumers with corporations, allowing them to enter “a data-sharing relationship with the brands.” For the consumer, Spooner says that means “improved monetary value with complete transparency because you’re in a relationship with a brand you trust instead of a research company that works with many brands.”
Spooner and the team at The U Group & Co have chosen to expand into the UK because of changing data-control laws in the region, allowing greater data control to consumers.
But, despite being a tech company, Spooner says people are at the heart of his organisation. “One of the most rewarding elements is seeing staff grow,” he says. “Even if they don’t stay with us, seeing them progress and learn is very rewarding. But on the flip side, when times are tough, the weight of supporting those people is so hard. Having people rely on you for their job is a heavy load.”
Spooner’s top tips for entrepreneurs:
Be willing to do what other people don’t want to do, to become what other people can’t. For me, that meant sleeping in the office and going without pay. You need to be prepared to keep going until you find that product market fit, and then all of your learnings will compound, and you’ll be able to sell fast.
If you’re launching in another country, remember to consider secondary languages. For example, Spanish is a huge influence in the US, and Canada has French speakers, so your app needs to be multilingual.
Be mindful that an app developed in Australia will run differently in another country. There could be slower features, for example, and of course, the time zones are different, which can make development so much more challenging.
