Broke and roughly two weeks away from needing to find a ‘real’ job, BoardPro Co-Founder and CEO Brett Herkt decided to take a leap of faith on a new startup idea, even though his last left him in major debt and putting pressure on his family.
“I’d invested three-and-a-half years of my life and my Co-Founder Kim Thibault had spent maybe a year of hers, trying to keep the first one alive. And it was a huge ask of my wife as we had a A$40,000 overdraft, three young children and were living off nothing,” Brett recalls.
“But then Kim and I had another idea pop up. We were bitten by the entrepreneurship bug and had to keep going. We wanted to do our own thing. And incredibly my wife was willing to go again.”
Their “own thing” didn’t come without a bit of hesitation, of course. They were understandably reluctant to keep going. “There’s a little bit of a fear factor once you break out of the normal corporate career,” Brett admits. But hard experience told him this idea was much stronger.
“BoardPro sort of burst out of the first startup. We were already in that business space, focusing on strategy and execution in the cloud,” he reflects. “So when we were struggling, we met with advisers and one mentioned board reporting.
Brett had to fail before he could sail in the world of entrepreneurship. Learn from his rookie mistakes with his three tips below.
1. Find and solve a real problem that pays: Ruthlessly hunt for a real problem that needs solving and that people will pay you to solve.
2. Learn your craft: Would you hire someone to do a renovation of your house who wasn’t a qualified builder? No. In the same way, you need to qualify yourself to become a startup entrepreneur, especially if you’re going to try to do high growth and take capital from other people. So spend your free time reading blogs and listening to podcasts.
3. Surround yourself with good people: Time is your most precious commodity. Getting the wrong people around the table is the fastest way to waste time. Save time and frustration by cutting loose anyone who doesn’t fit in with the culture and is a significant detractor. It could kill the business if they’re not managed.
“It just made a lot of sense to go into this more focused area. We realised through the failings of startup number one that we were too broad and too ambitious in trying to build an excellence tool. We loved the idea of shrinking to a smaller problem. Now, I’m a firm believer that it’s only worth creating a startup when you find a real problem that real people want to solve – and will pay to solve.”
Streamlined and simple
Traditional board reporting isn’t as streamlined and efficient as it could be. While board members often feel comfortable doing things the way they’ve always done them, that doesn’t mean it’s the best way.
“When you get boards to properly open up, their board reporting processes don’t work as well in the background as they think,” Brett says.
“And it all comes down to lots of really simple, practical things. For instance, they’re probably using Teams, email, Dropbox and PDFs for board preparation. There are emails with a number of attachments; so many, that if they get distracted by a phone call, it’s hard to remember where they were.”
In layman terms, it’s a mess, and it often causes members to receive late board papers, adding fuel to the fire. Luckily, that’s where BoardPro comes in.
It’s a cloud-based software platform designed to instantly produce greater efficiencies and better governance for small to medium businesses. So instead of emails flying back and forth with attachments, everything is all in one place on the portal. “BoardPro is very beautifully designed, modern software with an easy and intuitive interface,” Brett explains.
“It makes all of the little jobs that need to be done in a board process easier with simple, step-by-step processes and prompts. Things like attaching papers, drafting the agenda, getting the chair’s review, circulating it – there are so many things to keep up with that a tool like ours becomes paint by numbers. BoardPro takes all of the cognitive load away from the administrators, company secretaries and even CEOs of charities who must prepare their own board papers, allowing them more headspace to do their day job.”
Now, I’m a firm believer that it’s only worth creating a startup when you find a real problem that real people want to solve – and will pay to solve.
Even more, BoardPro’s software is so user friendly, it makes even the most tech-averse people wish they’d adopted it years ago. “There’s very little pain in converting to BoardPro,” Brett reveals.
“Most of our customers are up and functional within an hour, and most of that is self-inducted. But we do have a very good chat service where our customers can jump on and ask questions. Likewise, we also offer an induction program, but the vast majority of our customers don’t even need it.”
Getting the word out
However, what they do need is to simply know that BoardPro exists. And that’s exactly what Brett is focused on now. “You’re not getting a 61-year-old board director sitting up at 10 o’clock at night, searching Google for technology,” Brett grins.
“Instead, he’ll hear about it by word of mouth as it percolates through the communities. We’re on the front edge of bringing that technology to the market and educating them that it’s available.” BoardPro is based in New Zealand and Brett says the company has worked hard to mature the market there. Now, it’s ready to get Australia up to speed.
“There are more than a thousand boards that use us in New Zealand, which is something like 7% of the markets here,” he shares. “But we’re a little bit earlier in the journey in Australia; it’s our next expansion market. Right now, we’re roughly a year behind where New Zealand is now, simply because we’ve done the work here just to get the market going.”
Eventually, Brett hopes to take BoardPro global. And just thinking about its limitless potential gets him revved up. “It’s really exciting,” he beams.
“I developed a seven-year model a couple of years ago to get us through to a minimum of a A$100 million business. At the time, I was a bit tentative about it. You get imposter syndrome and start to think defeating thoughts like, ‘We won’t even make it.
“In my game, you raise capital and you basically have to grow your business something close to 100% year on year. It’s easy in the first year, but once you get to half a million, you have to get to a million. Then you have to get to two million and then four million – it just gets bigger and bigger. But now, when I look back on our seven-year plan, which is two years down, we’re pretty much on target even with the COVID-19 pandemic. In fact, we even managed to grow our business roughly 80% last year.”
The silver lining
The pandemic has taken the world by storm, upending the business realm and life, in general, as we know it. And what’s to come is still largely unknown. What is known, however, is how critical digital transformation has been to a business’s success.
In many cases, it’s been a matter of life or death. Luckily for BoardPro, the pandemic has been somewhat of an accelerator. “We were fortunate because we built a product that is delivered in the cloud. It’s built in the cloud, delivered in the cloud and can be marketed in the cloud,” Brett says.
“Most of the team were delighted that they could work from home, eliminating their commute, and were able to function relatively easily. “Of course, in the beginning, everyone was quite nervous about the impact COVID-19 would have on our sales. Traditionally, we raise money and then we deliberately make losses in order to grow faster over a one- to two-year window. And then we go raise more money. We were basically a loss-making business when we went into it; able to reduce costs and break even really quickly.”
Then, as time went on, the silver lining of the pandemic emerged. Boards continued buying BoardPro software. “We discovered that people continued buying our product because all boards were now functioning from home too. They needed cloud tools,” Brett says.
“So the pandemic turned out to be broadly positive for our situation by accentuating the need and demand for tools like ours.”
Waves of opportunity
One of the greatest things about BoardPro is that the best is yet to come. The software holds so much promise to continually evolve to meet market demands. As of now, Brett is focused on getting it in the hands of the wider Australasian market.
“We’re on a five- to 10-year journey to mature the entire marketplace. We really want to get word of mouth built up to become the number one provider of board software in Australia in the next one to two years. That’s our big goal,” he says. Along with that, Brett sees a lot of potential in emerging technologies.
“You have machine learning, you have blockchain – there’s the distinct opportunity to take good governance practices and embed them into our software, offering a double whammy,” he predicts.
“There’s a tremendous opportunity over the next 10 years to pick up those emerging technologies and do some really clever stuff to help boards, company secretaries and executives function.”
To achieve these lofty goals, it’s imperative to have the right business partnerships. That’s why Brett has woven a partner strategy throughout the business.
“The secret of partnerships is where there’s long-term value, commit to the long-term. Where it’s shortterm, just right-size the partnership to fit,” he tells. In the early days, Appoint Better Boards was a key partner. It advertises and helps fill 50% of all board appointments in New Zealand, so BoardPro used the company as a promotional channel.
“Through to the other end, we have a relationship with the Governance Institute of Australia, where we promote through to their members, get involved in thought leadership and push valuable content out into their markets. So we have sponsorships at one end and promotional partnerships at the other.”
Brett says BoardPro is also exploring the idea of working with practitioners in the space such as those who provide governance consulting, professional board members and the like. “We have a medium-term strategy to use our software to help facilitate a more end-to-end service in the governance market,” he says.
BoardPro takes all of the cognitive load away from the administrators, company secretaries and even CEOs of charities who must prepare their own board papers, allowing them more headspace to do their day job.
“Forming partnerships is something we’ve been doing for a number of years, and we see a lot more opportunity over the long-term to do more.”
A serial entrepreneur who has built several highgrowth businesses over the past two decades, Brett grew up thinking entrepreneurship was the norm. After all, he saw his grandfather set up a trucking and bulk fertiliser business in his hometown.
His father even worked there as a mechanic. And the white Herkt & Sons trucks roamed around delivering fertiliser to local farms. “I’d go to school and people would ask if I was related to the Herkts on those trucks,” he remembers.
“So I grew up thinking that it’s normal for someone in my family to start a business from scratch and grow it to be successful.” However, Brett humbly declares that entrepreneurship doesn’t come naturally to him. Instead, he chalks it all up to his penchant for taking chances. “I’m intrinsically unafraid to try new things,” he says.
“When I became dissatisfied being a chartered accountant, I was brave enough to branch out, try new things and work to cast a new career for myself.” And the rest? Well, Brett attributes it all to “pure luck”.
“I moved into an orbit of people in the startup space. There, I met my Co-Founder, who was doing her startup with a young teenager building an ISP. I got involved and worked with them,” he says.
“At around the same time, Rod Drury was on the scene in New Zealand, building Xero, and raising hundreds of millions of dollars over time. He was an inspiration. He showed me it could be done. So really, my entrepreneurial spirit and success can be attributed to a little bit of family influence, a bit of luck being in the right place at the right time, and being unafraid to get out there, fail once and succeed the next time.”