Legends of Tech: Episode #24

And we're live. Good morning, good afternoon, good evening, everyone. Welcome to episode 24 of Legends of Tech. Today, I'm joined by an absolute legend, a 35 -year veteran. He's a serial entrepreneur. He's founded multiple companies, for example, Distribution Central, Lance Systems, and most recently, iAsset. He's also known for putting on the best events in the world for his partners, customers, and vendors. He was also on a program where he started his career. Please welcome Scott Frew. Thanks, mate. No worries, mate. Well, Scott, thank you for joining, buddy. How you been? Yeah, yeah, all good. Given the current environment, we've been very good. Thank you. Nah, it's good, mate. Well, look, mate, I'm super pumped to have you on board, mate. You're an absolute legend of our industry. And I've had a few people ping me saying they're going to be tuning in today, mate. So, mate, welcome. Welcome back to the great land of Oz as well. I know you came here and now you're stuck here, but it sounds like things are going well for you. Well, it'd be nice to have some of our household furniture here, but yeah, we came out in March for a three-week visit from the UK and got stuck here. And the Australian government said no one's leaving. So, we're in the process of houses packed, dogs are in quarantine in Melbourne, and yeah, we're here for the foreseeable future. Right, perfect, mate. So, if we go back to the start of where it all began, I was having a stalk through your history and you started off as a programmer by the looks of it. That's right, yeah. So, believe it or not, my mother introduced me to a computer when I was nine at a university or college in Australia, and it was like a duck to water. And in fact, my CTO, Michael, who's been with me since we were five, both of us hit computers at the same time. He's a lot smarter at it than I am. But yes, I ended up becoming a COBOL programmer. Well, I did Fortran and RPG3 and Assembler and all of the trendy stuff at the time. So, yes, it was something that I really enjoyed. It's certainly not the sort of tech that my developers are running with these days. It was a simpler time for us old people. Nah, for sure, mate. So, have you always had a fascination around technology and, I guess, that space? Yeah, I think, you know, I always joke, I think I've got an undiagnosed ADHD, which is a trendy thing to have these days. But basically, technology keeps me interested because every two years there's a cycle, there's a big change cycle. So, it's not like, oh, I said I couldn't live in the era of, you know, selling the same thing over and over again. You know, really, it's about keeping the interest going in that there's these changes going on. If I joined the rag trade, for instance, yes, I might get a change in patents every year, but that wouldn't be enough to interest me. Yeah. So, I guess it's always been the changing, evolving part of technology that's really kept you, I guess, into that game. Yeah, it's the evolution of it and watching, you know, what's next, what's next, what's next that keeps the, you know, my interest peaked, you know, with where we came from, like everyone, especially the younger people in the industry, get all excited about cloud computing. I said, listen, guys, cloud computing is bureau computing of the 80s. It's just, we don't have green screens, we have color screens. It's exactly the same sort of premise. So, you know, in reality, that's that evolution. We've come forward, but actually we're doing cycles. Yeah. Yeah. Well, it sounds like, you know, we virtualize, then we bring everything back in-house, we go back in, we just give it. You know, when outsourcing was a big thing and then they realized they'd given away the keys to the kingdom and that was, let's bring it all back and then we'll do task sourcing, which is we'll just hand out security or we'll just hand out some other function. Yeah, exactly. So, mate, so you started off as a programmer. So, how did you get into, you know, starting up your own businesses and building out? Because I noticed you did start quite young in establishing something. So, tell us a little bit about that and how that all came about. So, when I was growing up, you needed two years of programming under your belt. So, I just went about doing the two years of programming. At the end of that, I realized that sitting in front of a screen for 50 hours a week was never going to get where I wanted to be. So, I took the decision ultimately to start a distributor with a couple of other guys that had come in from New Zealand around distributed networking. So, that's when networks were on coax cables, the same stuff you hook TVs to and you used to, you know, put them all in a chain. But not a lot of people had expertise because we were coming off sort of the Unix and mini and micro type environments. And the only distributor at the time that was in the country used to sell direct as well as to their partners. And I went, I've got a business idea, let's set up a distributor that you don't sell direct against your own customers. And bingo, Micro Networks was born and we grew that over three years in our early 20s and sold that to Netcom, which was the motor manufacturer. They do all sorts of stuff now, but the motor manufacturer at the time. And then in my journey, I worked out within six months, I couldn't work for anyone else. I certainly couldn't be hamstrung by a corporation that didn't want to evolve and be creative. So, I walked out of there and started Land Systems just on my own, just with a company name. And I took a couple of products on, which the first was Newport Systems, which was Cisco's second acquisition. So, over the course of building that company from me solo to, I don't know, we had 30 or 40 people by the end of it, routers that obviously come on strong, the Cisco acquisition had happened, switching had just started. So, I was selling SMC switches and basically doing the value add support thing that my distributors are renowned for. In fact, in Land Systems days, because people had little or no idea about routers, in fact, they used to call, some of them used to call them bridges, but they weren't, they were layer three. I used to go and install them in Novell servers all over the country. So, I was out there selling them and then I'd put them in because the resellers didn't have any expertise in this. And I'd been programming on Novell file servers and before that, Televideo personal means, which was a Novell based system. So, I just basically went out and just started deploying them. And the product was, the reason Cisco bought them is it was the second largest installed router in the world at that stage, because Novell also OEM them. And it was a card that sat in the server and their compression tech still today would be faster than your normal routers. They just, they'd really built some great tech. The problem Cisco had ultimately was that they were Intel based platform and Cisco's not, so they couldn't move the technologies together. So, Land Systems built up over those years, became the largest Cisco distributor in region. And then Data Tech, who owned Wescon came along and I was still only a young pup at that time, early thirties, mid thirties, and offered me more money than I thought I'd ever see in my life if they took over my distributor. So, as always the case, I pondered that for a while and I asked for more and they said, okay. So, yeah, I sold that out in 2000 and then I retired in Europe, sitting on boards and bouncing around the med and following the F1 for a few years and had another son. So, I was Mr. Mum to my younger son and then moved back to Australia, decided that kids living indoors six months a year didn't sort of fit well, moved back to Oz. And then my then wife said to me, I married you for breakfast and dinner, not lunch, go and get a job. So, I basically, at the time that happened, some other former employees out of the first startup had built a little distributor, Firewall Systems down in Melbourne. And I'd got contact from one of them saying, would you like to buy a distributor? And I'm like going, are you crazy? I'm not going back into distribution. And I thought, well, the wife said I should get a job. So, I bought them and I thought, I had visions of sitting back and I'll just bring in and do the non-exec type thing and help them where they needed it. But of course, all of my competitors went, uh-oh, Scott's back. So, they started trying very hard to shut me down getting any vendor contracts. So, I went, okay, game on. And so, that started and I grabbed Nicholas and that started the journey to a three quarters of a billion dollar distributor, largest privately owned distributor in the country at the time. And it was the everything, I mean, it turned out to be the everything but Cisco distributor in those days, but we built out across APAC and that's how I built the iAsset platform because I saw this massive, massive hole in channels, which is no one knows where any of the products are, what all the serial numbers are, the contract licensing, everything. And I wanted to automate that piece. And the first step, our first product when I bought the company was WatchGuard Technologies. And my competitors were selling WatchGuard firewalls without maintenance. So, 40% of the firewalls are being sold without the maintenance contract. Now, in the world of firewalls, if you sell a firewall without a maintenance contract from the vendor, it is not a firewall, it is code base that could be three years old, it's been sitting in a warehouse, it's been built in China, it's not getting any updates. So, the simple idea was we need to sell every single product with a maintenance contract. And it was a historic thing that came out of LAN Systems. At LAN, I was the number one global distributor for smart net maintenance attached. I used to go to the Bellagio hotel and chambers and hand me a little last thing to recognize the fact I've done this. But it's logic, right? This is not rocket science. So, that's when I grabbed Michael, my CTO, and said, I want you to build me a configurator. Now, remembering there was three of us in Sydney, three of us in Melbourne, I said, how much would that cost? He goes, oh, that'd be $25,000. I said, $25,000? I've got 25 grand, just bought this thing. But as it turns out, I said, okay, go ahead. So, the position we took in the market very early was, we will not sell a product without a maintenance contract. And there was lots of resellers that weren't happy about this. So, I actually sent an email to anyone that wasn't happy about it saying, here's the contact at Ingram Micro that's responsible for watchguard technologies, go talk to them, they'll be happy to sell it without the maintenance contract. But we ceased to do that. And all of our sales now must include point of sale information. So, again, in the IT game these days, it's a bit more common. But in those days, lots of people were selling things without point of sale coming back up. Now, the manufacturers in those days, a lot of them would just get an Excel spreadsheet, and then they'd store it for compliance and wouldn't do anything with it. So, a year after building those configurators and making sure we added any service we could, any associated items, like with Avaya, we used to include Jabra headsets, every fry with the burger, because the money's in the fries. You've already got them there with the burger, it's how you add all the other bits. After that first 12 months, I'm like, right, what are we doing about the renewals piece? And of course, there was blank looks. And the manufacturers weren't notifying, they didn't know where the product was because they didn't have point of sale data. So, that's where the platform was born. And that was 2005. So, that's how long the code base has been evolving over that time. So, now, it runs some of the largest companies in the world from vendors, distributors, and resellers. And my favorite examples are one manufacturer, the ROI was 19 seconds. They were losing $2 million a month in unreported revenue. Another one was they found $100 million, it's actually more, but $100 million worth of revenue they'd never even seen before because they just didn't have the platform to look for it. And so, now, you see fantastic cases of other people sort of upselling. But that's my passion, take the cost out of something. So, I would say, and you remember this from DC days, if I don't save you money or make you money, or both, why are you dealing with me? That's very, very simple when you bring it down to those three pieces. And if you put that in that context, it's like, oh, okay, yeah, that is a good question. It's not about jollies and lunches and all the rest of it. It's like there is a mitigation, especially distribution is supposed to be an efficiency gain for vendor and reseller. So, that's where the underlying tech came from for this startup anyway. Yes, yeah. And so, I guess the inspiration to start up iAsset was really to solve your problem initially, but then you saw the vision of how this could potentially help other customers, partners, and vendors in the process. I'd like to say I was that smart. It was more to do with the fact, Chris, that I built it for my own use, and then vendors were rolling in saying, we need this overseas. I went, okay, there's a business plan. And that's ultimately why I sold out of Distribution Central, because I was starting to run competitive distribution organizations. Although I have better things to do with my life and look through thousands and thousands of lines of data, it was a conflict of interest. So, that's why I stepped out. Right. That's amazing. So, you've always been known to find, I guess, a point in the market and add that value and do things. One other thing, and I guess this is probably an experience that I've had with you guys is, I guess, the cultural aspects of your businesses and your teams. And there was always this feeling walking into a DC office versus another distributor. It was a very different kettle of fish, and you could tell that everyone that worked for you had fun. So, how important was the cultural aspects of your business and what you did? Well, it's critical. And I even had this conversation with someone only two days ago. So, I mentor a bunch of smaller startup guys, younger guys, and they're only a team of about six. I said, well, you don't have an HR manager yet. He said, we don't need an HR manager. There's six of us. I said, but you've got to build that culture. You've got to have, as I call mine, you've got to have the mom of the organization, someone who is just specifically looking at nothing other than culture. I don't have time. I've got my bits and pieces, and I drive culture by leadership and by doing things that leaders should do. But I would need someone sitting on the outside of the business looking in saying, how do we get that culture better? And it's, I mean, it's paid huge dividends. So, to give you a context of our assets, six months before COVID hit, I'd already moved everyone home. So, I'd already taken that position anyway. And then when COVID hit, we'd already started on the journey of how do you keep people engaged and the team combined? And how do you bring new people in that have potentially never physically been in an office or with that team? And this is not new. There's lots of people dealing with this sort of thing. But I need someone who's just, entire life is looking at that beast. And I always say to my HR managers, and my last one, she's worked for me twice, your job is to get on the great places to work. If you get that job, then you're doing the right things for culture. So, that's the driving sort of goal. And why is that critical? If you get on the great places to work, and I've been lucky enough to be on there multiple times, employing great talent becomes easier. Because they go, right, why are these guys so good to work with? And we were up against NetApp and Google and Apple and all those guys that would win their place based on benefits. Well, we were a distributor, we didn't have the money for those sort of benefits. It was just about the cultural connection between the individuals. And we would employ for, you know, if you went up the interview stack, and I'm not the world's best interviewer, I can tell you in about five minutes to a 90% accuracy whether you'll fit. I'd have my people go through all the stacks of, you know, with can this person perform the function? And then they get to me, and my job was can they work with inside this organization that we've created? So, I'd say we're pretty, you know, 95% accurate. And if you look at some of the people that are out there in the industry today that have either worked for me at micro networks, LAN systems, or Distribution Central, they're all in, some of them are in very powerful positions. So, they've come out of that culture, they understand how to work, and then I've launched them. A distributor, as much as I'd like to think that people wake up out of university or school and say, I want to work at a distributor, that's normally what happens, right? So, my job was to nurture them for the phase that they went through distribution, and I usually threw them up into vendor land. And if you look at any of the people that are working in channels, there's some point that a lot of them have worked inside one of my organizations or an organization that we've been involved with. Yeah, I mean, you're spot on about that one. But yeah, look, like I said, forever that I've known you and the team, and I guess all the people that have been part of your businesses, you know, there was always that sense of, you know, everyone worked hard, everyone had fun together. And there was no feeling of any negativity. Yeah, you're going to have a few here and there. But the general sense and feeling was, you know, it was all good. And I think, you know, when I started working with you guys, during my, I guess, you know, SI days, you know, they're the key reasons, you know, I enjoyed working with you guys. So, no, it's good. And it's good to see that you're carrying on. Now, you're mentoring people now, and you're giving them this sort of advice. And you mentioned this HR one, I guess, as a company or as a business, you know, is that something that you would do straight away, is get someone to focus on the HR aspects? When's the point of doing that? So the short answer is yes, whenever I've launched. So forgetting land systems for a moment, because land systems, I was a young pup, I had no financial backing, you know, it was the first one in. So I was late to the HR piece on that one. But I was just learning how to build a business. You know, we were scaling, we were tripling nearly every year. And I was just literally trying to hold on to the reins at that stage. But in, say, DC days, or so the first, no, the second person I employed that I hadn't acquired of the three guys that came along, was my HR manager. Now, she performed, because we're only six people, she performed the function of bookkeeper as well as HR. And this is what happens in a very small startup, everyone's doing everything. The running joke at DC was I did the first 34 stock takes. And I did them all on the same day, because I kept screwing it up, because I'm terrible with detail, right? It was all about licenses, it was just nuts. Anyway, your people become multi -talented. And then as you get bigger, you're trying to put yourself out of a job and a job and a job, because otherwise, you'll never evolve in the business. And we used to get people in and we'd say, right, your job is to get yourself out of your job, or to remove effectively you being in that job. They were a bit scared by that, because they're thinking, oh my God, I won't have a job whenever I do that. But actually, it's about evolution. Yeah, right. That's crazy. Now, I guess, if you look back at your career, and obviously, you've had a lot of success, and you've seen probably what's happening within the market, and you've made some, I guess, good decisions. Are there any, I guess, specific points when you look back at your 35 years, or however many years it is, where there was some junction points or decisions that you made that got you to where you needed to get to? There's lots of risk points. So, as I say to all of the people that have ever worked for me, you can do what I do. You have the same cranial matter in a skull, and you can walk, and you're healthy, and all the rest of it. There is nothing that I do that you can't. But what most people won't do is I take enormous risk. So, when I got myself attuned to taking risk, that's when it changed. And the first step, if you go right back to land systems days, when I started land systems, my father's accountant, who was then my accountant, said to me, don't do it. If you don't make more than $35,000 a year, there's no point from a tax point of view. And that was my first lesson in, the tax guys only want to save tax. They don't want to make money. They just want to save you tax. So, that was, I had nothing other than maybe, I don't know, let's say $5,000 or $6,000 in savings when I started land systems. And when I started buying product, I had to guarantee it or a prepayment. When I took on, if you take Cisco as a great example, when I took on the, it wasn't as big as it is now, but when Cisco was just a router company, I was paying my bills religiously on time, and they were still stopping me going to the next level because of the risk profile. So, I either had to prepay or write up a personal guarantee and not a lot of people will take those sort of risks. So, the risk part was a big thing for me as in defining moments. I think eliminating self-limitation is also a difficult thing. And to a certain extent, I joke with Nick, we got to three quarters of a billion dollars. So, I can now go and build a company to three quarters of a billion dollars and I've done it before. So, that's not the hard part. It's when you build beyond that, could you keep going? So, getting, removing self -limitation or self-belief is a big thing. But the other thing that I think that most people miss in an entrepreneurial conversation is persistence. I get up, I have shit days. I get up every morning and I go and hit it again. And I don't care if it's an immovable object, I will go and hit it and hit it and hit it until it breaks down or eventually I'll go around it. But it's the ability to be persistent. Now, I may be stupid, but I'm persistent. But it's worked so far. Yeah, fair enough. And during that time, are there any specific lessons that you've learned doing what you've done? More than I'd care to count. And if you talk to any of my former staff, I'll tell you all of my little sayings that I have when I'm walking around the business. One of my favourite ones, and especially when I'm working with Nick, if a customer upsets me and I just don't want to deal with them anymore, Nick goes, what's that favourite saying of yours? I'd rather take money off people I don't like than off people I do. There's all sorts of bits and pieces. Yeah, no, fair enough. I'm sure there's a lot of different things. And I guess, why do you do what you do? Why do I do what I do? As I said, I get bored easily. And when you talk to an entrepreneur, and when I did a BOW interview many, many years ago, Cath Walls said to me, so why do you do it? I said, well, it doesn't matter where I walk in a day, I see an opportunity. Whenever, if anyone's listening to this, and they've had bad customer service somewhere, I don't think, wow, I'm going to smash that out on Facebook or Instagram. I think, right, now, if I was running that, this is what I'd do to alleviate that problem. And that's where an opportunity gets created. It's the same in distribution. Today, I could start, not that I'm going to, I could start another distributor, and I'd smash it. Because I've already done it. So I've got that background. And nothing's really changed. Okay, they've thrown in cloud consumption, which is utility billing, but nothing's really changed. No one's actually pushing the boundaries of value out the door. You know, they've done finance. Okay. They've done tech support. Okay. They've done staging. I mean, both of my old companies do a lot of staging. But what's the next thing? They're not looking at the next thing. They're just, this is all about line cards in a distribution context anyway. And that's all I worry about, rather than what does this organization and my organization do to change the game? Yeah, that's great. That's great to hear. And I think, and do you think because you've always been ahead of the curve, that's given you that opportunity to keep looking ahead? Do you find yourself more looking forward than, you know, as opposed to others that are being too reactive? Is that part of your thinking? Yeah, it is. Well, I think so. I'm always looking forward. I mean, I learned from history, and I learned from the mistakes, and I've made some enormous mistakes over time. But I learned from it. I don't repeat, obviously, those mistakes. You know, my favorite analogy, which I'm probably butchering is, you know, it's like the village Indian that gets told he's got to, you know, he's now a man, he's got to go out and hunt the biggest tiger he can and bring it back to the village. And, you know, then he moves into manhood. Well, I'm the guy that comes screaming back through the village with the tiger chasing me saying, right, there's your tiger, now you deal with it. That's the way to look at it. That's brilliant. So, in terms of the text, I remember having a chat before about, you know, the different evolutions and people, you know, history repeats itself. I mean, where do you see our industry heading to over the next, you know, call it five to 10 years? And I guess, do you see much of the same happening that happened previously, that's just now going to happen again, just in a different format? Or do you actually see a shift and a change upon us coming ahead? So, in the channels context, I don't see a massive change. You know, people have been calling distributors are dead and resellers are dead for years. I don't see that changing because there's a fundamental business relationship going on. It doesn't matter what the technology is. It doesn't matter what the service is. So, although they'll evolve services over time, there's still going to be the need for all of those relationships. In terms of technology, again, underlying, I think there's all cycles. I don't see anything that's truly, you know, unique. You know, just because we talk to computers now rather than talk to computers or use punch cards, it hasn't actually changed how we're feeding them information. It's just changed the delivery mechanism. So, I can't see anything. I think the biggest threat in a global scale is IOT at the moment. And that's why governments are trying to legislate to make sure the manufacturers are keeping their security levels up to date. But security will continue to evolve because it's like radar detectors in the old days, you know, that they bring out a new radar detector, which would detect the police, and the police bring out a new stealthy one that wouldn't get detected. It's a constant war between these two parties. You know, do I see any fundamental change in humanity? Actually, I think you'll see technology will come back more to basic levels. Because if you're anything like me, the last thing I want to do is tech support in my house. And that happens far too often for someone who doesn't have a lot of IOT in their own house. Yeah, fair enough. So, Matt, what keeps you motivated in, I guess, just from a day-to-day point of view? I think that's just my personality more than anything else. I want to get up and do something. You know, I bought this farm to see if I could build effectively aged beef while actually sequestering carbon back into the soil through regen ag techniques. That's just my side gig because I thought I think I can put carbon back in the soil. And I haven't had the opportunity. I had a distribution central at DC. I put in a program called buy one, get one tree. Every time we generate an invoice, we planted a tree. We planted over 170,000 trees in my tenure there. So, that was easy. I ticked that box and I could do it. And even when the GFC was on and everyone threw all their green credentials out, that continued. So, what do I do in this particular guy? So, you could argue that iAsset drives carbon emissions through cloud using cloud data centers like Azure, or Azure if you're American. But what do I do personally to try and make it better for my kids going forward? And I can do it through this regen piece. You know, we've basically taken an industrialized farm that was originally dairy and then beef. I've sold off half of the cattle to give the land a bit of a break. We've just put down cow kombucha as I call it, but basically it's soil microbes. We don't use fertilizers. We let the pasture come back naturally. And there's a few other techniques we're working on at the moment. But what drives me every day? I don't know. I just get bored, go, I think I could do that. That's it. There you go. It doesn't have to be over complicated. And I think if you look at life and a lot of people, they're always looking for something. But I think to your point, you just got to get up and just go for it. Yeah, absolutely. Every day. Every day. Just don't give up. It doesn't matter if you stuff up, just keep moving forward. Yeah. Persistence is everything. Mate, Scott, it's been an absolute pleasure. There's a whole bunch of other stuff that I want to cover off with you, but we're going to have to have a part two, maybe face to face and maybe in a pub somewhere where we can have a chat. And I'm sure there's a lot more stories. But look, I just wanted to thank you for your time today. I just wanted to thank you for your contribution to our industry. I've learned a lot from you. I'm sure everyone around us has learned a lot too. So yeah, mate, thank you so much. Have yourself a really good Christmas. And then, mate, when you're in town, mate, let's catch up for a beer. Well, now Sydney's open for COVID. Yeah, absolutely. I'll be down there at the end of January. No worries, mate. Have a good one. Thanks for that. Okay. Cheers. See you, everyone. See you next week.