In this episode:
In this episode, Tim Hogwood, co-founder and CEO of SourceWhale, shares his journey from being a management consultant to starting his own tech startup. Tim provides valuable insights into the challenges and rewards of starting and running a tech startup, as well as the importance of clear and concise contracts in dealing with legal issues.
Find out more about SourceWhale
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Read the transcript:
Charles Brecque: Welcome to the Legislate , a place to learn about the latest insights and trends in business, technology and contract drafting. Today I'm excited to welcome Tim Hogwood on the show. Tim is the co founder and CEO at SourceWhale, the only recruitment engagement platform teams need to execute their daily recruiting activities and make more placements faster. Tim, thank you for taking the time. Would you like to share a bit of background about your and Source?
Tim Hogwood: Well awesome, thanks again. Charles for having me on the podcast. I mean you did a pretty good intro on SourceWhale, so maybe start with myself and we'll get to the kind of SourceWhale story. But I'm Tim Hogwood, one of the co founders of SourceWhale. We've been going for about two and a half years now, at least trading as we are.
My background then straight out of Uni, had no clue what I wanted to do, so became a very small cog in a very, very large wheel, a management consultant at a company called PwC. From there I realised actually some of the projects I liked and enjoyed doing, I really liked seeing the results of the work that I did, getting involved in the more kind of operational products. So I thought, how could I best make a move into doing that kind of work more often? And obviously everyone in their 20s looks at kind of tech startups and I thought those two things aligned quite well. So I went from being a very small cog in a very large wheel to being still probably quite a small cog, but in a very, very small wheel, which interestingly is in the same industry as Legislate. It's a company called Apperio, I don't know if you heard of them, Charles.
Charles Brecque: The legal tech?
Tim Hogwood: Yeah, exactly. So they're kind of legal spend, analytics, invoice management, that kind of stuff.
So dipped my kind of toe into the world of tech startups actually in the area of legal tech and really, really enjoyed my time there. Learned a lot, learned a lot of what to do, learn a lot of what not to do that's myself, obviously not the company. And one thing I really got the bug for there was actually just trying to grow my own thing. I think a lot of people that I work with at Apperio would probably describe me as very opinionated, probably too much so. I think I got the idea eventually it's like probably do want to go and do my own thing.
But to be frank, I didn't have that next Uber idea or that next Airbnb idea. But what I did have was a fantastic co founder, or co founder to be, which was my best friend and still surprisingly best friend today, a guy called Harry Jackson, who's a CTO. We knew that we wanted to work together, but we didn't know quite what we wanted to work on. And it was really interesting because what we actually ended up doing first wasn't building SourceWhale. I actually ended up quitting my job before Harry and trying to start a one man band recruitment agency, which in hindsight looks a bit mad.
But actually I'm really, really glad I did that because I think it was about nine months or so from January 2020 to about August 2020 until we made the flip into SourceWhale, as it's known today. I was actually trying to run that one man band recruitment agency. And actually I ended up walking a mile in the shoes of what ended up being a lot of our customer base. So it was a really kind of quite serendipitous, roundabout route to where we got to today.
But, yeah. And so I guess SourceWhale, as it is known, today was August September kind of 2020, and the rest is history, I guess.
Charles Brecque: Congrats. And I guess what made you switch from that one man band recruitment agency to building SourceWhale?
Tim Hogwood: Yeah, really good question.
So I think it was partly due to the fact that originally the idea behind me quitting was that we could start a recruitment agency. We saw how people intensive they were and how much of a meat grinder they were and how much work went on repetitive manual tasks. I've got a bit of a be in my bonnet about automating, you'll see, on my LinkedIn automating, the tedious and the mundane. So we had this idea that maybe Harry could start to work on some tools behind the scenes that could make this a kind of less people intensive recruitment agency and more kind of more efficient recruitment agency. But actually what realised is when I started that recruitment agency, not only did we hit March 2020, which I'm not going to bore your listeners, it's probably everyone knows what happened then, which made it a difficult time to recruit. But what I ended up doing was actually working with a lot of other recruiters and working quite closely with them. And it was when I think one of them turned around to me and said, Tim, you know what, you're an all right recruiter, which for all your British listeners will know is slang for your mediocre to crap recruiter. But what you're really good at knowing is all of the products and the services and everything we need to do our job better underneath. And this tech that you keep talking about that we weren't called SourceWhale at the time, we're actually called Tyrannim, but the Tyrannim recruitment. So you keep talking about this tech you've got like, we'd probably pay for this tech if it's as good as what it sounds like.
And I remember turning around to Harry, who had yet to quit his job at that point, saying, I don't think we need to raise funding because that was a big point for Harry and I as well. We really wanted to kind of build a bootstrap organisation where we kept most of the equity and we were able to prove that you can build a profitable business without that kind of venture capital background. Again, nothing wrong with it. That was just kind of our aim at the time. And I think, frankly, naively, we didn't think it was possible to do a B2B SaaS company without having raised any funding.
So it was only when some kind of, I wouldn't even say customers, but mutual partners, other recruitment agencies I was working with, effectively dragged us into it kicking and screaming, that I realised, actually, hang on a second, I think we can do this. I think we already have the kind of groundings of a B2B SaaS product and we don't need to raise funding. So it kind of got dragged into it kicking and screaming, but yeah, and then managed to bring on some of those guys that I'd been partnering with as our first few customers as well.
Charles Brecque: Yeah, having customers before starting a business is always one of the best positions, and it seems like you had product market fit maybe even before you actually started SourceWhale, which is great.
Tim Hogwood: Absolutely.
Yeah. But it was definitely a roundabout route to doing it. I wouldn't say it would have been my plan all along, but yeah, ending up like that was quite nice.
Charles Brecque: Great. And through this journey since September 2020, what's been your favourite moment so far?
Tim Hogwood: I think it probably would be going all the way back to September 2020 and August, September 2020, when we bought on some of those recruitment agencies that I've been working quite closely with the product on. So there's a guy called Rob up in Cheshire who runs a one man van recruitment agency. What a lovely guy he is, but he put his faith in us and ended up being our first customer. And I think that nothing quite beats that. Your hedonistic set point constantly resets.
You've got new worries, new celebrations constantly. But I think nothing quite beats that point when you bring on that first paying customer that isn't a friend or a family or a connection you have. This is just a random guy who actually believed in the product you had and started actually parting with their hard earned cash, with their one man band recruitment agency and actually paying for the product. So I have to say, I don't think anything quite beats that. And I think it's a really nice moment to take yourself back when you are kind of celebrating the highs and going through the lows and stuff and actually just going back to those simpler times and saying, thinking back like, that's what it's all about, right?
It's bringing on happy customers and effectively, hopefully making some money from it. So I think nothing quite beats that point to date. Still.
Charles Brecque: Yeah, I think nothing quite beats the first customer, first year old customer. And it's always surprising what they actually want, why they're using you, or what they're actually looking to achieve from your product.
Tim Hogwood: Absolutely.
Charles Brecque:, and what do you wish you had known before starting as well?
Tim Hogwood: Really good question.
I think people say you read, people go on podcasts like this, but you read about founders, you read the articles, you hear the advice, et cetera, and people always say you'll work really hard, it'll be really intense. But I don't think until you experience it, you quite understand what that means, like quite how much it takes over your life and not necessarily in a negative way. Like it's it's because you want it to. But, you know, you I eat, breathe and sleep SourceWhale. Well, it's kind of all I do.
I mean, hopefully my fiancee thinks I also spend a bit of time with her as well, but in general I'm so hyper focused on it and you don't really realise how much it's going to take over your day to day, not even if you set yourself good work, life balance, I would say. I mean, maybe other founders are better than this than I am, but you never truly switch off. And part of that is also your strength because you're so intensely focused on it. You spend your time in the shower thinking about it, you spend your time at dinner thinking about it and that leads to some really good thoughts, processes, ideas, but it is also the negative part as well. It is really, really hard to switch off.
And I think you hear people saying that and you go, oh yeah, whatever. But when you experience it, it's quite something else. I don't know if you felt that to yourself, Charles?
Charles Brecque: I absolutely relate and I'm definitely guilty of spending too much time thinking of Legislate. I think the only time of the year I can truly switch off is around December time, or at least the end of the year because usually everyone else is switched off. And what's the plan vision for the next five years?
Tim Hogwood: Good question. So I do think five years is quite a long time. And actually I found every plan we made at SourceWhale ended up changing, not necessarily for the worse or the better, just ended up changing.
So, I mean, bear in mind, in September 2020, we just thought, let's just make enough money to kind of pay our salaries. Then we started taking off and we started hiring people. And then your set point constantly resets on what those goals are. So I tend to think kind of a year in ahead max, frankly, because I think after that point, our kind of current size and scale and some people will say you could have predicted what would happen with the economy, but you never know exactly, quite when it's going to happen. And if you call an event, eventually you'll get it right, so no one knows what's going to happen.
I think becoming a founder has really opened my eyes to that phrase even more. So I think frankly, we kind of think quite short term, maybe year to year, and so really kind of over the next year, we just want to keep growing as we are growing efficiently, but also sufficiently without external capital, so we're roughly kind of break even profitable. We might burn a bit over the next couple of months, but really keeping that generally structurally profitable kind of motiveless, we start to scale and not letting costs out of control, because I think you then have a lot more control when you do decide to go out to the market, whether that be for raising money, future acquisitions, whatever it may be. So I think for now, it's just keeping our head down, focusing on doing what we're doing and also not getting distracted. I think it's very, very easy, especially in turbulent times, to be like, oh, wow, we could go and do X, we can go and do Y, we can go and do Z.
But actually the risk that comes with sometimes doing that is you end up spreading yourself too thinly and doing a bit of everything and then doing it a bit naff, frankly. So actually, having conviction in the path we're going on is the right thing. We want to be the number one recruitment engagement platform for recruiters. You could very much think of a tool like ours being used and there are similar tools that are used, for example, in the sales space, the sales engagement space, but actually doubling down and saying we are just focusing on doing our niche incredibly well. I think that's staying kind of focused over the next year and then after that, you'll have to get me back on Charles and ask again.
Charles Brecque: Great. And I know you've had really amazing growth since you started. Are you just focused on the UK or are you global?
Tim Hogwood: No, really good question. We are global in terms of employee headcount.
We have about two thirds of our team over here in the UK and the other third, but quickly growing over in the USA. Those are our two biggest markets. But then again, as a B2B SaaS product, you can kind of serve people everywhere and so our pretty third biggest market after that might be someone like Australia or even South Africa. So truly grow global in terms of the customers we serve and then dual continent in terms of where our employees are based.
Charles Brecque: Great.Well, I imagine that will spring all sorts of exciting challenges.
Tim Hogwood: Absolutely, From employment contracts to customer contracts to the joys of different time zones, et cetera. You'll spot on.
Charles Brecque: Yeah, well, leads perfectly to my next question, which is, as a busy founder and CEO, what are the key contracts that land on your table?
Tim Hogwood: Yeah, it's a good question. So I think frankly, it's mostly kind of customer contracts, especially larger customers that have a procurement team. The other things, we've probably vendor agreements, we're a SaaS platform, we integrate into lots of other products. So there's vendor agreements and sometimes those agreements can even turn into kind of partnership or revenue share agreements and that's when it starts getting tasty in terms of combining the legalese with the commercial aspects as well. So those are probably top three, I'd say.
Charles Brecque: And with those contracts, what are maybe the common patterns or issues that you encounter and how do you overcome them?
Tim Hogwood: Yeah, so in terms of kind of areas that always kind of go up, most up for debates, things like IP, IP, indemnification, limitation of liability, even things like jurisdiction change. I think you asked a good question earlier, Charles about us being kind of international. Often I'll find that you'll get a customer based in Australia or South Africa or Brazil, and they'll want to change the contract from either being the laws of Delaware or the laws of England and Wales, depending on which entity they're signing with to their own country. And obviously then the certain definitions and meanings you have under England and Wales laws might mean something completely different under Brazilian law.
And whether that there's always an aspect of theoretical risk. How big is the contract for us? Do we weigh that out versus actually what is the theoretical risk that we're actually going to undergo here, but still knowing when to involve a lawyer and when not? Because eventually that lawyers can get quite expensive. And so I'd probably say those are the three main things anyway, indemnification, kind of limitation, liability stuff and jurisdictions.
Charles Brecque: Great. And obviously you've got a big company and you're a bit all over the world. So do you have a general counsel? Do you have retained law firm?
Tim Hogwood: Yeah, so we have quite a small law firm, but I actually quite like the relationship we have with quite a small law firm.
The partner is also the person I deal with, which for me works quite well because they put up with my wittering and waffling and they know me quite well and they know our business inside out. So we do have retained counsel. Frankly, though, you do as a founder, you start to pattern match over time. You start to learn either from your external legal counsel or just from your experience in the business and negotiating your contract. So due to the cost of laws, we do try and do as much of it in house as possible and then obviously handing to external counsel when it's most appropriate.
Charles Brecque: I definitely agree with the pattern matching. I mean, the pattern matching is ultimately what led to the creation of Legislate because I was seeing contracts, listening to lawyers, and ultimately that the amendments were always the same, the rules were the same. So it's well, how do we codify this? So that a business user can go from start to finish without needing to get legal involved at every single step.
Tim Hogwood: Absolutely.
I think just even knowing when to involve legal and when not is this kind of half the challenge?
Tim Hogwood: Yeah, absolutely.
Charles Brecque: I think lawyers are there to give legal advice, not necessarily to draft contracts or make the amendments, or at least obviously they can do that, but it's not necessarily the best use of their time. So, Tim, I'm conscious I've already taken a lot of your time, so I'm going to ask you the final question we ask all our guests. If you're being sent a contract to sign today, what would impress you?
Tim Hogwood: I'm sure you get this quite a lot, but minimal legalese as a non legally trained individual, obviously within reason, right? Contracts are there for a reason. You need to map out exactly what's going to go on. But I think just it being clear impresses me because I think sometimes you go through an entire sales process, the salesperson's on your side, they're very much a yes person. And then you get to the contracting stage and sometimes you get to feel is there something trying to be obscured here?
It can feel a bit conflictory or aggressive, say. So, just being clear, I think one thing I've actually not seen, so there's probably a good reason why people don't do this, but almost some kind of one pager that goes alongside the contract because there'll always be a certain necessity to have kind of legal language and legalese, et cetera, but actually explaining maybe the rationale. I think actually by having that open dialogue and sometimes you have to get to the point where you jump on a call with someone and often that you find with lawyers or even kind of procurement, you'll jump on a call and everyone sees eye to eye and those things can get resolved. Those things that were done on paper seem kind of less aggressive when actually you hear the other side's story. And actually having some kind of PDF or one pager alongside I actually think would really, really impress me.
Explaining, hey, this is what this part means and this is our position on it. I think that could be really, really powerful. And frankly isn't something I've seen very much to date.
Charles Brecque: Great. Well, I mean, that's a great feature suggestion for Legislate. We don't quite do that yet, but we do offer a terms tab view of the contract where it's viewing the questions and answers that led to the contract. But that's a great suggestion. Thank you, Tim, for taking the time to be on the show. And best of luck growing SourceWhale, and I'm sure by next year you will have conquered the world even more.
Tim Hogwood: Thanks so much for having me, Charles
Charles Brecque: Great, thank you. Bye bye.