We always look out for things that make sense. Increasingly the number of things that make sense are less and less. The acquisitions that we’ve made have been at a really great price and quite a lot of acquisitions fail. We’ve had a couple that failed. We’ve had a couple that were successes.
The last one we’ve done I think is fantastic. We’re always on the lookout but the things we’re interested in that might be aligned with what we’re doing are getting pretty slim, so who knows. We’ll see. Just depends on whether we can get something at the right price.
Well, at some point, I don’t know when it’s going to be, whether it’s a month away or two years away – at some point it’s going to flip into the mainstream.
By that I mean – I don’t know if you remember back to 1995, but 1994 didn’t really have internet, but 1995, everyone’s using it, and you had an email address. There’s going to be this point where it’s really going to move from the realm of the tech savvy and early adopters into something that’s really mainstream.
I mean there are eight million eBay users in Australia alone. We’ve got four million users globally in our business and we’re in the top 249 websites. There is a long, long way to go in terms of growth, and there’s going to be something that’s basically going to cause an inflection point whereby every small business out there is going to be ‘This is the way things are done’. Why would you spend two weeks hunting around the Yellow Pages or your personal networks looking for a web designer to come and quote your website and charge you $10,000? That’s just not going to happen.
If I jump online and post a project, within 60 seconds I’ve got people bidding on my job and instead of $10,000 I can get it done for $500. This is the future and it’s going to happen. So what’s going to happen is, at some point there’s going to be this massive inflection point. If you look at the way technology companies grow, there is a point where you hit this exponential curve, and you just go from one million, two million, four million, 20 million, 100 million, and you get to go through this massive growth state. So what we’re doing is we’re getting prepared so we can go from 4 million to 100 million. And that’s all an infrastructure thing, so we’ve got to get all the infrastructure in place, the website’s scalable, everything we do is scalable – and that then, once the technology is scalable we’ve got to make sure the processes are scalable, so we’re talking about the support team.
I’ve got 100 people already in my support team, but I don’t want to go and get to 1,000 in my support team. So how do we do support better, smarter in a way that doesn’t require humans? The trick with all these technology companies is get rid of the humans, you’ve got to find a way to replace humans with lines of code. And that’s why technology companies are getting so big so quickly – there’s no humans to slow them down. And so we have to do the same thing with our business.
It’s not so much offshoring, it’s just doing things online, and offshoring is just part of that. The fact is that there’s a global macro trend occurring right now, and the trend is that there are seven billion people on the planet, but there’s only two billion people on the internet. So another five billion people are about to connect to the internet and those five billion people are just like you and me.
The only problem is PHDs – poor hungry driven – they survive on $8 a day or less. So the first thing they want to do when they connect online is raise their standard of living and they can do that, they can make their month’s salary in a few days or a few hours. So the big macro trend is that the rest of the world is connecting to the internet – 30% of the population is online right now.
I think there’s going to be a huge trend right across the world where they’re actually going to connect up with the rest of the world. Obviously the big driver there is going to be raising incomes, and so bringing up wages in a lot of countries, and that’s going to provide huge opportunity for Australia. It’s really going to be the workforce that drives the country into the digital economy. We talk about all these jobs in Australia and we’re lucky we’ve got record low unemployment but there’s still a bit of a skills crisis in many areas. Really, this is going to provide the workforce to help us really propel ourselves. There’s no way Australia with 22 million people is going to maintain its ranking worldwide in terms of economy and so forth without moving to more of a technology based industry. The mines are going to run out. They have finite lives and they only work well when commodity prices are rising.
The only way with a 22 million population we can actually get out there and compete long term is by building a really, really strong technology industry. And the only way we can do that is if we harness an offshore workforce. It’s going to be impossible without that. We just don’t have the people. And particularly for small businesses, one of the big things happening with small businesses like retail, for example, is that with the big trend of going online for retail, the big winners are the big companies that can afford to build proper websites and to sell online properly.
In the UK there’s a 100 billion pound per year ecommerce market, and in the UK Amazon has 7 billion of that 100 billion dollar ecommerce pie. This is an offshore US company. Small businesses need to be able to compete with these big online behemoths otherwise there’s going to be trouble. So they need a workforce out there that’s low cost enough that the average retailer will be able to go online and sell online and so forth. It’s across all industries. Every industry is quite rapidly becoming disrupted by software businesses. Every business is becoming a software business.
If we don’t build our technology industry up, we are going to be basically eaten by someone else’s software. Amazon’s just announced they’re going to have a distribution centre in Australia and it’s going to be a huge hit to local retail. Really, we need to get a huge technology resource behind us for us to survive in the future. That’s what we provide.
Cara Waters is a former SmartCompany editor. Previously, Cara was a senior reporter for the Financial Times’ website and worked for The Sunday Times in London.
