Bonus Episode: Wayne Baskin, Deputy CEO, CTO at Booktopia | Co-Founder of Superhero

Bryce Leske: [00:00:58] Welcome to the Equity Mates summer series of 2020 brought to you by superheroine over 12 episodes, we're diving into some of Australia's largest and most well known companies as selected by you. The Equity Mates community will be unpacking the company, its industry outlooks and key financials and in some instances will also be taking the tough questions straight to the CEO. And in this episode, we are lucky enough to be joined by one of them. However, to kick it off, as always, I'm joined by my Equity Mates Ren. How's it going? [00:01:26][28.3]

Alec Renehan: [00:01:26] I'm very good. I'm very excited for this episode. Two things that we love are in what we love investing on the show, obviously, but two particular things we love. We've been talking a lot about IPOs this year. Yes. And we talk about rating as the best way to learn about investing. We do. And the best we've got today brings those two together. [00:01:47][20.7]

Bryce Leske: [00:01:48] Match Made in heaven. [00:01:48][0.7]

Bryce Leske: [00:01:50] We are very fortunate to be joined in the studio by Wayne Baskin, who is the deputy CEO and CTO at Booktopiatopia, recently listed and co-founder and CTO at SuperHero. Wayne, welcome. [00:02:04][13.3]

Wayne Baskin: [00:02:04] Thank you. Thanks for joining me. [00:02:07][2.9]

Alec Renehan: [00:02:07] Now is it is it is. It is. You must wear a lot of hats there. Deputy CEO, CTO and for people who are unfamiliar, that's chief technology officer at Booktopia TOPIA recently listed and then the co-founder and chief technology officer at Super Hero. So I think the first thing is, thanks for finding the time in your day to join us. [00:02:28][20.9]

Wayne Baskin: [00:02:29] Thanks for having me. [00:02:29][0.5]

Alec Renehan: [00:02:31] So this conversation, we're going to really focus on Booktopia. We've recently done a bit of a deep dive on the company and, you know, it's newly listed. So it's exciting and a lot of people are looking at at the moment. To start with, though, I would love to hear how you describe Utopia and what you think the company is. [00:02:49][18.2]

Wayne Baskin: [00:02:50] Yeah, so it's a Booktopia. For those that don't know, Australia's largest online bookstore seems to be Australia's largest bookstore. We're hoping we don't. We've got to look at the numbers and see where that ends up. And but what book topiaries? It's an online bookstore, but it's technology-enabled and it's a logistics company in the background. So we've invested heavily in our tech. All the tech is built in-house. We've invested heavily in our distribution and logistics. And then on top of that, we're a bookstore. So as you know, we sell, you know, our website. We sell over six million products. We have about 150000 of those in stock or ready to ship to our customers. And it's all that customer centric approach. Everything is about the customer. Everything we do is about the customer. And that's every decision from the board level all the way down is thinking what's the best thing for the customer? Yeah. [00:03:38][48.7]

Bryce Leske: [00:03:40] So let's go back to the start of the journey. You know, we're interested in the entrepreneurial sort of spirit and what it's like to take a company from zero to IPO. What's the journey been like? And perhaps if you can talk us through some of the tough moments that you've had to get through, you've listed last week. So congratulations on that. Exciting. But what's the journey been like? [00:04:00][20.5]

Wayne Baskin: [00:04:01] Look, yeah, I joined Book Topia over 12 years ago, and the company is now, I believe, close to six years old. And look, there's been a lot of great moments. There's been a lot of tough moments and we didn't make any investment in the company until January twenty twenty. So there's been no investment and it's all been built off more books, invest in the company, sell more books, invest in the company. And so what that means is you do, you know, have some real tough moments, and especially from a cash flow perspective, when you're growing at the rate we're growing, you know, we're growing 30 percent year on year for many years. You know, we wouldn't be fast 100. You know, I think it was eight years or something like that in a row. So, you know, there's a lot of growth which requires a lot of cash flow and a lot of capital invested in it. And we didn't take on any capital until, as I said, at the beginning of this year. So some of those tough moments, some of the tough discussions with your suppliers, making sure that the business is able to service the customer, what's the best thing for the customer? But also on that very, very small budgets that we did. And, you know, it's only now in the past, probably few years where we feel like, OK, we can all breathe out and we can all just say, well, how are we going to grow this company now that we've got the capital injected in it? How are we really going to, you know, grow, and how we can accelerate it to the next level? [00:05:17][76.0]

Bryce Leske: [00:05:17] What was the driving decision behind not wanting to take on investment? Like I imagine you would battle between wanting to take it on to, you know, speed up growth, but then I guess the other side would be not wanting to give away too much equity and bootstrap. [00:05:30][12.9]

Wayne Baskin: [00:05:31] Yeah, look, I don't think there was a need for it up until around 2015, 2016. And, you know, for those that know the story, we try to IPO the business in 2016. And it was right when Amazon was deciding they were coming to Australia. And so, you know, we would go through the roadshow, went through the whole process, and every question was, what about Amazon? What about Amazon? And I'm sure, you know, in about five minutes, you guys. [00:05:53][22.0]

Wayne Baskin: [00:05:55] I want to jump the question. But I think. What happened then is the investors all had this mindset that Amazon are coming to Australia, they're going to crush retail, they're going to crush e-commerce and, you know, a few weeks out, a month out from us actually lodging the prospectus, which was all done and ready to go. Amazon actually formally announced they were coming to Australia and all the investors are not going to happen. You know, we want to see how this plays out. We want to see what happens. And so from there, we pulled the IPO and talk about one of the tough moments. That was one of the tough moments I think we'd put around in probably 18 months worth of work into that IPO. And it was a long process getting the company ready for the IPO. It was a tough moment. And, you know, make my CEO and he's one of the co-founders. He bounced straight back. He was straight back in it. And for me, it probably took a couple of weeks to actually just, you know, internalize that and say, OK, that didn't happen, but we're going to move on from here. Yeah. And then since then, we actually did try raise some capital. After that, we try to crowdfunding with equities, which, you know, I think the market wasn't ready for. We were going to be one of the biggest ever crowdfunded companies. And I think what happened is people were just putting in like five hundred dollars, you know, a thousand dollars. And you don't get to ten million dollars by putting in five hundred dollars. So it was an interesting journey. I think, you know, equities in those guys are onto a good thing. I think we were just before our time. And then around January 20, 20 weeks or so, probably late 2019, we decided the way to raise capital is to have someone in your business who lives and breathes the business but also knows how to raise capital and was really the only role in the business we didn't have. We were great marketers. We were great sales. We had the tech, we had the product, we had the strategy. We just didn't never have anyone in the business who could raise capital. So we brought in an external consultant and gave him, you know, a role in the business. He had his own business cards. He sat in the business. He learned the business. And what the difference was there is that he learned the business. He spent months in the business understanding it so he could go off to those meetings. It didn't take me out of the business, didn't take the CEO out of the business. He was going to all those meetings and having those discussions. He also had the connections. Raising capital is all about having connections. I've learned that on my own, my other journeys as well. It's like if you've got the connections, you can raise capital easily. [00:08:06][130.9]

Bryce Leske: [00:08:07] We're learning that, [00:08:07][0.5]

Alec Renehan: [00:08:08] yeah, we might get that consultant's number. [00:08:10][1.8]

Wayne Baskin: [00:08:13] But even knowing the business was he could talk as a book Topia not as an investment banker trying to sell book topia. And that was one of the major differences. [00:08:20][7.7]

Alec Renehan: [00:08:21] So you're right, we are going to talk about Amazon. And I'd love to frame this part of the conversation by going back to, you know, your conversations in 2016 after you pulled the IPO, Amazon, it announced and, you know, I guess you guys were sort of circling the wagons and figuring out how you were going to fight this online retail giant that had disrupted so many other countries. What were those conversations like and how did you see yourselves positioning book topia against Amazon as it entered, [00:08:53][31.9]

Wayne Baskin: [00:08:53] you know, pre 2016, Amazon's biggest downfall and one side down, folks, I'm sure they will go on to do well, but to their launch, their launch was nothing that anyone expected. I think we can all agree on that. They haven't blown the lights out that everyone expected. And I think the reason for that was they actually had too much media coverage. Everyone knew from the beginning of 2015 Amazon are coming to Australia. So if you look at companies that have thrived and I'm just not going to talk about it before now, but look at catch, for example, catch. If Amazon had launched without cash knowing anything, they would have been dead in the water. Yet they pivoted brilliantly. They built a marketplace. They've become one of Australia's largest marketplaces. And today they're thriving in an Amazon environment. You know, so there were so many companies that actually had that, you know, that at that time, you know, to be able to say what is our strategy? What is our Amazon strategy? And for us, we all remember meeting we had and we were ready, you know, at that time looking at, you know, movie topia and game topia and toy topia and, you know, all these exotic, you know, these arms, the business we were going to build out. And I remember thinking and sitting down with my CEO and saying, look, we need to focus. If we're going to if you know, if we're going to do one thing, we need to do it well. And then when we looked around the world, the companies that were thriving in an Amazon environment, it was exactly that. They knew their niche. They knew what they were good at. And they didn't try at Amazon, Amazon. They didn't try to sell everything to everyone. And I think Amazon's you know, the thing is, they want to sell everything to everyone in the universe. You know, they don't even stock on earth. They want to do everything. So for us, it was, well, let's stick to Earth. But let's let's be good at one thing. And we decided that was books. So we you know, we looked at all that strategy we're putting into toys and all the other times you said, let's come back to books, let's focus on books, and we can just do so much better. And if you look at countries like Canada, some great book retailers, they're taking Amazon on America as well. There's still some great book retailers taking Amazon on. So it was all about that focus and it was all about just staying true to who we are and not trying to be Amazon, because that's just never going to work. [00:10:52][118.3]

Bryce Leske: [00:10:52] And so you mentioned that you're a tech company, logistics company and have a focus. On the customer, all three things that Amazon also say, how does your tech compare and how, as an investor, should we be thinking about book topia versus Amazon when you both sort of pitching the same sort of business philosophy, I guess? [00:11:12][20.0]

Wayne Baskin: [00:11:12] Yeah, sure. I think the two questions that our tech built in-house, you know, we always buy those builds. We always see what's out there. And we've just found that being able to build our own tech and it's all commercial grade. We've got a team of 30 engineers supporting it and that team is growing rapidly now. But the point there is we can get the efficiencies that we want out of that tech without relying on other people so we can make small changes that make massive differences. You know, we're shipping out at the moment around 30 to 40000 units a day out of our distribution center. So if we save one second per unit, we ship out. You could think of the efficiencies we can get there. The same is on our website. If we can increase our conversion rate by one percent, that small little one percent last year we did 165 million. This year will do over 200 million in revenue. You know, you can just imagine what one percent really gets you in revenue. So that's our tech. That's what we are. And as far as Amazon versus eBook topia, Amazon have moved off books. Yes, they still sell books, but it's not where their focus is. And especially in Australia, it's not where their focus is. I think Amazon's revenues worldwide are around three to five per cent books. You know, for a company that started in books, a 100 percent books, that they've moved to three to five per cent. So really, their focus is on the marketplace. It's you know, it's facilitating that sale from one person to another and taking a pretty significant clip on the way through and then also helping those people with their logistics and taking a clip on the way through of that. So great business model. You know, you don't have to post anything you don't to do anything if it's a marketplace transaction or if you're doing all the logistics you're charging for it. So they don't focus on books. They obviously do sell books in Australia, but it's not one of their focuses. [00:12:46][94.0]

Alec Renehan: [00:12:49] So one more question about Amazon and then we might move to other competitors and other questions. I'm sure you're sick of the Amazon questions at this point, but I do want to ask about the Kindle. So Amazon launched that, what, 2007 around there. And, you know, it's obviously done well for them. How do you think about the Kindle and and competing against that when I guess you guys sell other a rate of books and physical books? [00:13:15][27.0]

Wayne Baskin: [00:13:17] So we launched a new partnership with Racketing Kobo. Rechtin is a large company out of Japan that merged with Kobo, a Canadian company. And we launched our partnership early this year in the peak of covid and we were selling e-books before then. It was all our own solution. And this is one where we looked and said, hold on, it'd be better to have a partner. And what we launched there was audio streaming and it's all on Kobo devices and you can read it on your iPhone and Android. But it was also about the physical device now, which competes with the Kindle. What's interesting in the market is the e-books are actually on the decline worldwide. Oh, really? And so, you know, I've said it for many years. The Kindle or the aerator is the breadmaker of our time. You know, everyone thought, yeah, it's a great idea. I'll get one, I'll get dad one. You know, let them have a try. Some people have stuck. And, you know, I say that to some people, like, oh, I read all my books on any reader. And I'm like, yeah, but you probably read a lot of books. Yeah. And for people that are prolific readers, the reader is, you know, is massive because they don't have to have all these books everywhere and then have to wait for the next one. And, you know, there are people that are reading multiple books a week and it makes sense for someone who just wants to, you know, get out of their mind, you know, work and move off the digital platforms. They don't want to read on there if they're on their iPhone or their Android, they don't want to have a second device they're taking with them anyway. They just sort of escape into a book, you know, a book which has the smell, the feel, you know, all of that that you just take so for granted. So if you look worldwide, if you look in the states in particular, e-books are on the decline. What is on the increase is audiobooks and audio streaming. And that's where Audible, which is Amazon's audio business. And we're competing with our audio streaming business. Now, the interesting thing there is, while that's great and it's on the on the increase and everyone loves it, the cost to produce an audio book is not sustainable because, you know, when you did an e-book, you took the file that was getting printed. You converted it into an iPad file and you put it on. You know, you could sell it just like that with an audio book. You've got to get someone to read it, someone with some great podcast podcasts like themselves. But then hold on. I'm in Australia. That's an American accent I don't want to hear in America, you know, I mean, I'm in Canada. I don't want to hear an Australian read at all. So all of a sudden now what they're finding is they have to do multiple reads of the same book. You've got to pay that person because they're a professional. You know, they're not just won't be asking here, sitting here with, you know, no experience in voiceovers. So it's an interesting one and we're following it. We definitely believe that we should give our readers the content wherever they want it. You know, we're content agnostic if you want the physical book, if you want the audio book or if you want the e-book, that's our belief. Yeah. [00:15:52][155.5]

Alec Renehan: [00:15:53] Yeah. Well, e-books are a funny one for me. It feels like books are written to be read. And sometimes audio books sound a bit clunky, they just they seem like the worst version of podcasting [00:16:01][7.9]

Bryce Leske: [00:16:01] unless it's read by Barack Obama, that would be pretty, pretty good to listen to. Sure. Yeah, that's interesting. I mean, the next question was from one of our audience members in terms of where do you see the preference for e-books going? And I find that fascinating, that it is on the decline. But all the reasons you've mentioned makes sense. [00:16:23][21.6]

Wayne Baskin: [00:16:24] And everyone you speak to, they say, well, I'm different. I like a good physical book. And I like to say, well, you're not. You're actually in the majority, right? Yeah. And yet, you know, we're prepared for it. Whichever way it goes, you know, we're ready and we're prepared for it. We've got an e-book solution, audio streaming solution, and we've got our physical books, obviously. Yeah. [00:16:42][18.3]

Alec Renehan: [00:16:43] So we promised would move away from Amazon. So I want to ask about a different competitor, which unfortunately is owned by Amazon, but it feels like that more. That is more and more the case with everything. Um, the Book Depository, for my mind, is probably one of the major, I guess, competitors to you guys in terms of like a similar business model. How do you think about competing with other online book retailers? And what was your reaction when they got acquired by Amazon? [00:17:12][29.2]

Wayne Baskin: [00:17:13] Yeah, look, I think your research, you've done well. I don't think a lot of people know Book Depository is owned by Amazon. I don't support Amazon. You know, I got stuff of trees the same. A Book Depository model when they launched was to disrupt the Amazon in all the markets that Amazon was trying to get into and then get bought by Amazon. Right. And they did it, you know, well, get on it. But what that meant is they were undercutting Amazon in all of those markets, losing money hand over fist to undercut Amazon. When Amazon acquired them, they thought, hold on, why are we losing money to undercut ourselves? And slowly but surely they've increased their prices. Then when the GST change happened, Book Depository no longer had that ability to undercut by 10 per cent because now they have to pay GST on in on all books coming to Australia. So what that means with Book Depository is, you know, and not even just book depository, just with all international players. Is this shipping majority of their books from overseas into Australia? And it's that time at that time to time to get to the customer, that being customer centric. I'll take you back. I think it was probably around 2008 and we didn't stock a book at all. You know, we didn't have a single book. And Deceptive, Deceptively Delicious was launched by Jessica Seinfeld, who's Jerry Seinfeld's wife, and she was on the Oprah Book Club. I don't know if you guys remember the Oprah Book Club, you probably don't. [00:18:35][81.2]

Alec Renehan: [00:18:35] But Oprah is still a big follower of the Oprah. [00:18:38][2.5]

Bryce Leske: [00:18:38] Oh, they love it. [00:18:40][1.4]

Wayne Baskin: [00:18:40] I've ever worked in that. If Oprah had you on her show, you would sit out of your book. And what happened here with Jessica Seinfeld is every time they had a replay, we would just see a spike in sales until we got to a point where they were no more books, no more of her book left worldwide. And we saw that there were a few left that HarperCollins, a few hundred. And what we did is we bought those copies. We said we're going to take all of those copies. And then what we saw is every time we sold one of those books, we get a great glowing review. How good is book to book topia? And and, you know, how amazing is their service? And every time we sell another book, it's like so slow. Where's my book? What's going on? And straightaway I realized, you know, let's put the customer first. Speed of delivery is important. You know, it doesn't need to be instant. We don't you know, same day we offer it, but we don't see a lot of uptake in it. It's all about being able to get your book in that one to two days. Yeah. And what we see is that with, you know, international competitors and some of the local competitors, if they're not competing in that space of being able to ship the book within one to two days and they're not competing, you know, now. Yeah. If they're going to undercut on price, then they're going to lose money. Well, then, yes, that they'll probably get the sale. But we're within the same ballpark of price. People are more, you know, saying, well, how can I save a dollar, save two dollars? I'd rather just get my book, you know, in the next couple of days rather than wait two weeks, up to four weeks during covid from the traditional. Yeah. [00:20:01][80.2]

Bryce Leske: [00:20:02] So when we did the Deep Dove on book topia, we recognized or saw that, you know, overall book sales in the industry sort of in the single digits, but within that, the growth of online book sales is sort of skyrocketing relative. But you guys own Angus and Robertson, physical book retailer as well. Where does that sort of sit in the landscape? How do you think about physical book retailers going forward? Are they eventually going to be a thing of the past? [00:20:28][26.7]

Wayne Baskin: [00:20:29] Yeah, look, I love that you said that a physical retailer, but they're not you know, [00:20:33][3.9]

Bryce Leske: [00:20:33] when they're physical and online. I should say, [00:20:35][1.7]

Wayne Baskin: [00:20:35] though, that only online now. So when they went into administration through the REDgroup, when Borders went into administration, Angstrom was part of it. But the point there is that, you know, the brand, you know, in your head, you've got them as a trusted physical retailer, which is great. It's one of the reasons we acquired them. That brand that that knowledge of the brand is really good. And as far as the question of physical book retailers, we support physical book retailers. We're big believers in a good local bookstore where you can walk in and they can say, hey, hey, Wayne, how you doing? Yeah. How was that last book you read? What about this one? I've got this one. I've held it for you and I have a read of it. Let me know what you think. Those retailers will thrive. Those retailers will continue. I have no doubt about it. Where the franchisee model kind of dies off is where you put someone behind the counter who has no knowledge of books. They're just a casual worker who are probably on Facebook. And then they look up from the cash register and say, oh, you want to buy that book, scan it and give me your money. So, you know, it's where they add the value. And that's in all retail. I'm talking books here, but you look at all retail. If if a store is going to add value, you'll go in. If they're just going to expect you to go and pick what's right for you, you're going to get a better service online because we'll at least personalize it for you and for your tastes. [00:21:49][73.6]

Alec Renehan: [00:21:50] Yeah, that that last point there are personalizing. It leads to another question that one of our audience members have. I think in your prospectus, you spoke about leveraging the customer database as part of the growth plan. And I assume that means around like really personalizing the experience for customers. Correct me if I'm wrong, but can you talk a little bit about that? You know, I guess your data strategy and your personalization strategy. [00:22:16][25.4]

Bryce Leske: [00:22:16] Yes. [00:22:16][0.0]

Wayne Baskin: [00:22:17] Also books probably gives us the biggest, best insight into people out of any product. And there's about three and a half thousand categories on our website. I said six million titles on our website, which means you're shopping across a range of categories and what I mean by that. So I know if you're into Formula One racing, I know if you're into romance. I don't know if you're into learning a language, but hold. Do I know if you're wanting to travel to Europe? You know, I know if you want to cruise the Mediterranean, some even getting a bit deeper there, and I know maybe you're pregnant. You know, I know you've had a baby, and so what that means is you can really follow someone's journey through life and we say, you know, our customer is not short lived. We don't have a customer. You look at some of the furniture brands and, you know, they've got a very, you know, customers to be of a certain age before they're buying furniture. Yeah, they're not they're not at school and they're buying furniture, you know. So and then you look at some of the fast fashion retailers, they've also got a very short life span with a customer, with books. It's from the time pre, you know, before they're even born, their parents or their mother and the father are buying books about pregnancy even before that, about how to get pregnant. Yeah. And then all the way through, then they have, you know, picture books and hardcover books and then readers and then they get into school and then school textbooks and then they go to university textbooks and it just goes on and then the cycle continues. So that data, while we aren't using it yet, really is a growth strategy for us to understand our customers. We don't need to go to our customer and go, you know, how many kids do you have at home? And, you know, do you like to travel overseas? And, you know, are you learning anything new? I know you're learning piano. I know, you know, during covid you were trying to cook dumplings, you know, you know, whatever it was. And that was a top seller during the cooking dumplings for some reason. [00:23:58][101.5]

Bryce Leske: [00:23:58] But you go to YouTube for that. [00:24:00][1.6]

Wayne Baskin: [00:24:01] Yeah, interesting. Someone else said the same thing, but we saw a lot of people during covid, you know, was a great journey through covid of watching what people bought. But we saw a lot of people turning to books to learn to be able to understand cooking or languages or piano is another big one we saw. [00:24:16][14.8]

Alec Renehan: [00:24:17] I still think there's something about reading a book that I retain more information than when I watch a video or something like that. Anyway, that's a sidebar [00:24:23][6.3]

Wayne Baskin: [00:24:24] I'm learning to skateboard but it's a new hobby I've taken up in the last six months. [00:24:27][3.7]

Bryce Leske: [00:24:28] But from a book? [00:24:28][0.6]

Wayne Baskin: [00:24:31] I'm struggling off YouTube, so maybe [00:24:32][1.1]

Alec Renehan: [00:24:34] I feel that's one way you need to just fall down a few times and just do it. [00:24:37][3.1]

Wayne Baskin: [00:24:38] Yeah, these hands are meant for faling or computer programing. [00:24:41][3.3]

Bryce Leske: [00:24:44] So you have let's talk about going public in the IPO. You mentioned there that you did try in 2016 and sort of put it on the backburner, given, I guess, the investors sentiment towards the impact that Amazon would have. Why are 2020? What is it about now that makes it the right time for book topia to go public? [00:25:03][19.7]

Wayne Baskin: [00:25:04] I think you guys know the markets better than I do. And if you've seen what's happened with e-commerce on the market, it's been crazy. And we were looking to list it probably early next year and then just circumstances as they are and everyone's saying, well, you should get it away this year. So an interesting little point and a fun fact that we've got the listing away in nine weeks, which we want to claim is a record. We still don't [00:25:29][24.7]

Bryce Leske: [00:25:29] know if [00:25:30][0.5]

Wayne Baskin: [00:25:31] that's really you know, there was a lot of work that went on before those nine weeks. But from the time we appointed the James through to, you know, ringing the bell, I believe it was nine weeks or so and twenty sixteen helped with that. Obviously, we've done a prospectus before. We've been through due diligence before. We knew what we were coming up to. We went, you know, in a head like that. Yeah. And so yeah, I think the market conditions for us was really what it was. And our business has accelerated significantly over the last year. And truly, would we have got a better value for our business next year? Most likely. And the reason I say that is we've just invested heavily in automation. So what we've been able to do is we put we put twelve million dollars into automation. That funding we took in January, we invested and we launched that in October. And we really haven't been able to prove out the efficiencies we've been able to gain with that automation. We've spoken to them and we've spoken to all the investors about that and it's in our prospectus and whatnot. But, you know, if we proved that, you know, my belief is that we may have, you know, even people who gone yet, that they've proven that they can actually do what they're saying that they can do. But it was just, you know, timing and I think timing is everything. And I think everyone will know that anyone is trying to ever raise money or raise capital or IPO. Timing is everything. We learned that in 2016 and we thought, you know, we learned that the hard way in 2016. Let's get it done. And now. So, yeah, it worked. [00:26:52][80.7]

Alec Renehan: [00:26:53] Yeah. So you listed, what, a week ago today or a week ago tomorrow? [00:26:58][5.6]

Wayne Baskin: [00:26:59] We listed on Thursday, yeah. [00:27:01][1.6]

Alec Renehan: [00:27:01] So you've been for been listed for four [00:27:03][2.5]

Bryce Leske: [00:27:04] days for context. We are recording on the 9th of December. [00:27:06][2.3]

Alec Renehan: [00:27:06] Good call. We should. Yeah. So talk us through the day you listed. Did it feel like a big weight off your shoulders? Was there a big party in the book told your office. And how did the share price go. [00:27:19][12.3]

Wayne Baskin: [00:27:19] Yeah. So we, there was a party in the book Topia Office. We went there, we were at the ASX, we had cupcakes and everyone's was the book t shirts and they were live streaming, the bell ringing and it was a lot of fun. It's a company. Yeah, it's a whole culture thing. And, you know, we can talk culture in a bit, but, you know, for us, it was about involving our staff. Always involve your staff in everything you do. Don't just you know, they're not your staff. They're part of the family. And so we had that for them. And unfortunately, due to cover, we could only have forty people at. So all the leadership team being leadership, you know, in the book, he has about 30 staff that came and then people that worked on the IPO went to the ASX and got to ring the bell, which was a lot of fun. And the day for me. I suppose it was. Was there a lot of weight off their shoulders? Yeah, I think there was probably a lot of weight off my shoulders probably three weeks earlier, once the book had closed. And, you know, all of that was done once. And this points along. Once you lodge a prospectus, then you don't need to reread that thing another 100, 100 times, you know, and then, you know, the book closes and you're like, this is, you know, we're getting there. And then ASX signs, you often say, yep, you signed off on the board. So it's a journey. So by then, the weight off your shoulders, I suppose all you're waiting for then on that day is [00:28:31][72.0]

Bryce Leske: [00:28:32] what's to happen. [00:28:33][0.7]

Wayne Baskin: [00:28:33] You know, you're hoping you wake up that morning to read the afar just to make sure, you know, like, yeah, the market's good. Nothing's happening the way the ASX hasn't just fallen over, you know, let's go back two weeks. There are some companies that woke up to that, which is unfortunate. So, um, and then it was just about what that opening price going to be because you obviously want to do right by those investors that have backed you. You don't have, you know, go down. So and we did and I don't know the exact numbers on me right now. I don't try not to follow the share price, to be honest. Otherwise, it becomes a total distraction. But we did well and it was funny all the James said, how do you feel? How do you feel? It went and I said, are you happy? And I looked and said, Well, are you guys happy? Because this is my first time doing [00:29:17][43.6]

Alec Renehan: [00:29:18] this [00:29:18][0.0]

Wayne Baskin: [00:29:18] for you. I'm doing it. And I said, yeah, we're extremely happy. I said, well, then I'm happy, you know? And there's all about, you know, doing right by the investors. You know, we're here long term. This management team, this executive team, we're here long term. We're heavily invested in the company still. And so for us, it's what that long term price going to be. They fall. [00:29:35][16.8]

Bryce Leske: [00:29:36] Who knows? It doesn't matter. Doesn't matter. Yeah. We like seeing managers who are invested in the long term. Don't just take the pop and then sell out also investors that come on that journey as well. So it's good to see. Speaking of management, one of the things that lots of professional investors say is, you know, management is everything when it comes to investing in a company. So we'd love to get your opinion weighing on your philosophy when it comes to leadership. Do you have one? How do you view yourself as a leader? I mean, you've got two pretty significant leadership positions in two big tech companies. Yeah. So what are your thoughts? [00:30:12][35.5]

Wayne Baskin: [00:30:12] Yeah, I've got a number of different thoughts here. The first one, and it's become very hard since we're publicly listed, but it's transparency. We believe in being transparent to our staff, but also out to the market now, continuous disclosure laws, all of that. You know, we've had to really learn very quickly. We had some discussions with lawyers and all the rest and what is all this stuff? And now we actually understand it all. We can't be as transparent as we used to be. We used to, you know, talk numbers all the time, [00:30:37][24.2]

Alec Renehan: [00:30:38] which seems contradictory, given that the ASX is meant to make companies be more transparent and you guys have had to rein it back in. [00:30:44][6.1]

Wayne Baskin: [00:30:44] Yeah, I think maybe we're still transparent in a way, but we need to go through the right channels to do it. If you're not, I mean, a conscious [00:30:51][6.5]

Alec Renehan: [00:30:51] part, just tell us [00:30:52][0.7]

Wayne Baskin: [00:30:53] exactly now with you, which I would have done in the past. Yeah, we're completely transparent as a company. It's just you've got to first notify the ASX before I can tell you something that might make the price move or, [00:31:03][9.8]

Alec Renehan: [00:31:03] you know, it's regulated transparency. Exactly. [00:31:05][2.1]

Wayne Baskin: [00:31:05] So so for us, you know, but if I talk internally, you know, internally, we are super transparent. You know, we've always told our team everything about how the company is going good and bad. You know what? You know what our revenues are, what our margins are, where we're heading, what we're trying to do, what our strategy is. And the second one is listening to our staff. So taking things from the ground up, you know, really listening to the feedback we get and changing things as they, you know, as they come to us. Um, it's was an interesting transition probably about five years ago, six years ago, when we went from being a start up in our heads to being a company. And so what happened there is, you know, everyone who is along the journey for the five or six years that I was there was used to getting promoted and people would build underneath you and the company would grow. And everyone knew everything and everyone would, you know, would be across everything. And then all of a sudden you become a company and then people are getting hired into positions. And there's not that progression, you know, up the chain. There's not that, you know, automatic. You know, I started as the first software engineer and found myself as the CTO. You not you know, I built a team underneath me and grew into my position and prove myself. But there weren't those opportunities. And you have to make those opportunities happen. You've got to focus on people's career development. You need to, you know, make sure that they are progressing, that they are going in the direction they want to go, that they're getting the training they want to get. And I think there was a period there where we were we probably fell short. This was about five or six years ago. And we heard that we heard that from our staff to say, guys, we're not progressing. The transparency is not there anymore. And the transparency wasn't there anymore because it used to be that we all around the table, we'd all chat about what's happening. Now, listen, we couldn't sit around the table. You had to actually now tell the leaders to tell their teams. What was happening, send out emails, notify staff of certain things that were happening. So for us, transparency is being key. And my number one, you know, I've spoken about the customer-centric approach, and it's been any business that I'm ever involved in. It'll always be what does the customer want? You know, how can I make this product for the customer, not for me and for my co-founder, not for the PNL. You know, what is the customer want? Because at the end of the day, you get the customer right. That'll flow into your panel. You'll get the sales, you'll get everything you need, and it'll just flow into the flow-through. But the key one for me is learning from your mistakes. And I've got a big philosophy. And especially being in tech, people make mistakes and some of those mistakes can be costly. And but I'm never the one to, you know, to hit someone over the back of the head or the back of the year and say, you've made a mistake, very bad. We'll sit down and we'll say, okay, what happened? Why did it happen? Let's not make that same mistake again. Because if you make the same mistake again, that's what I hit you over the back of the head. Come on, guys. We haven't learned from our mistakes. So it's crucial to be, you know, learning from your mistakes and learning along the journey because otherwise you're never going to grow and you'll always think what you're doing is right. And most likely it's not. [00:33:57][172.3]

Alec Renehan: [00:33:59] So just one more question on people and culture, if you think like for the whole team, not just the leadership team, what culture you're trying to build at our book TOPIA, do you guys have a sort of a vision or a motto or a phrase that you try and use to embody the culture throughout the organization? [00:34:15][15.7]

Wayne Baskin: [00:34:16] Look, we don't. I'll be honest. We don't have you know, for us it's about, you know, just valuing our employees, making sure everyone feels like, you know, valued and listening to everyone's opinion. It's very important. You know, I've learned that the hard way that sometimes you make a decision and if people don't feel like their opinions being heard, they don't want to go with the decision. But if you hear their opinion and still go with that same decision, it makes a big difference because they were able to contribute to that decision. So we don't have a motto or anything. You know, it's you know, we believe in empowered people. So that's one of our, you know, our core values of serving the customer obsession so that learning from our mistakes, the other one is empowered people and that's empowered employees. They feel they're empowered to make change. They're empowered to make decisions and stand by those decisions because they need to be held accountable for these decisions. [00:35:04][48.5]

Alec Renehan: [00:35:05] So the last, I guess, the thing we want to talk about is the future and future plans. And there are a few questions here. I want to start with, I guess, the profit question. So as you mentioned earlier, Brooke, Topia has had incredible top-line growth, incredible revenue growth the last four years going from 111 million. One hundred and twenty nine million, one hundred and sixty five million to over 200 million. So you've almost doubled your revenue in four years. The profit hasn't really come there as well. Is that I guess the first question is why? And then the second question is, do you guys have a plan to sort of turn that profit on at some point? [00:35:44][38.9]

Wayne Baskin: [00:35:45] Hey, look, we're profitable and we've been profitable for the last couple of years. We want a few e-commerce retailers that can actually say we are profitable and we did six million and EBITA last year and I think this year and after you don't quote me, I'm pretty sure it was nine million in the prospectus. And if it's not, we can edit that out. But and we see that growing and that profitability is going to come from automation in that distribution center. So we've spoken about that first part that went life in October. The next thing I'm working on at the moment with my team is robots in DC. And so, you know, that goes live and first quarter, first fund, first calendar quarter next year or the third financial quarter. And that will have robots picking books from shelves and putting books on shelves. And we really see that, you know, allowing us to grow our capacity and our distribution center, grow our stockholding our distribution center, but also then giving us some good, you know, benefits of economic scale and so that we can then drop more to the bottom line. And it's all about pushing more volume through the distribution center. The more you can push that as a distribution center, the cheaper it is per unit that goes out and then it falls to the bottom line. So, you know, we have lofty ambitions of our profits and that we see going forward. And we're a profitable company. We're proud to be a profitable company, and we see that growing into the future. [00:37:06][81.8]

Alec Renehan: [00:37:07] Yeah, sorry, I should have clarified. It's the bottom line. Growth hasn't reflected the growth rate in the top line. Yeah, yeah, yeah. [00:37:13][6.3]

Bryce Leske: [00:37:14] So other than automation and robots in the day, seasonal distribution. Well, distribution centers, what else is in the pipeline for blacktip year over the next 12 months? [00:37:23][9.3]

Wayne Baskin: [00:37:24] So we recently probably two years now, we launched the distribution business. So we're actually now distributing for international publishers. So the book industry has a lot of people taking a lot of, you know, a clip of the ticket along the way, like probably every industry, but books in particular, you've got the author who then has a publisher. The publisher then uses the distributor. The distributor then distributes the books to the retailer and the retailer then sells the books. And so we see that you know, we've taken one step into that. Now we're becoming the distributor. So we've got publishers from overseas who didn't have representation in Australia. Well, that's allowing us to do is to ship books to customers faster, but also, you know, be that distributor for them using our current infrastructure. And then we're also we've got a publishing arm. So we're also now taking on smaller authors. We're not we're not here to take the big authors. We're never going to be able to do, you know, do them justice. But taking some of the smaller authors who do sell a lot of copies of their book and we're publishing them and then distributing them through distribution. So as we just work through, you know, work up the supply chain, and that's one of the big things that are there for opium growing. Obviously, in books and especially in the academic area. We acquired the co-op bookstore on the university campus bookstore [00:38:36][71.2]

Bryce Leske: [00:38:37] late last year, my favorite bookstore. [00:38:38][1.4]

Wayne Baskin: [00:38:41] And so the bookstore, they focused on the Australian Geographic, which they had the stores to, and they saw that as a cash cow. And they really just let academic books go. And, you know, you'd go to a university campus bookstore and they would have three copies of a book. And there were 70 people on the course. And we picked up on that really quickly. Publishers were coming to us saying, we need your support. We said, sure, no problem. And we were taking on enormous risk, but we would have like 30 copies of 50 copies of a 300 dollar textbook on the shelves. What it meant is that when a student went to the bookstore, that didn't have it or they were online on their phone and the lecturer said, this is the book you need. We were there, we had the product and we shipped. And what that means is we're going to grow that that area of our business and really, you know, get that business moving forward. And so, you know, along with other areas of our business. So it's a multipronged attack. And we are Australia's bookstore and we want to continue just growing in that direction. [00:39:40][59.5]

Alec Renehan: [00:39:41] So I guess there's always risks to business. If if you were to think about all of them for book topia, what would be the biggest risk for your business over the next 12 months? [00:39:51][9.6]

Wayne Baskin: [00:39:52] It's a hard one and the biggest risk to our business, obviously, like we were talking through the prospectus risks, you know, you have to do a section in the prospectus. And I said, well, our biggest risk. And so I said, Wayne, what's her biggest risk? I go, Well, the Internet goes down. [00:40:05][12.9]

Bryce Leske: [00:40:05] Yeah, literally. [00:40:06][0.9]

Alec Renehan: [00:40:07] That would be a big risk [00:40:08][1.1]

Bryce Leske: [00:40:09] that I had. A lot of businesses are going to start to think about it as well. [00:40:13][3.5]

Alec Renehan: [00:40:13] Equity Mates has done it for the no, no, hear this interview. [00:40:16][2.4]

Wayne Baskin: [00:40:17] I think that's our biggest risk, is some disruption in our supply chain of some description. And we saw it with covid. And luckily, we do stock a lot of our books and luckily we do have a lot of distributors in Australia. So we were over to able to overcome that. But that disruption, our supply chain has meant that our books coming from overseas have been a bit slower to come, which then is, you know, an impact on our customer. So, yeah, I hate trying to think what is our biggest risk? People say what keeps you up at night. That's the other question we often get. And I say nothing. I'm exhausted. [00:40:47][30.1]

Bryce Leske: [00:40:48] I just go to sleep. [00:40:48][0.4]

Wayne Baskin: [00:40:49] But it's things like that, it's a disruption in some some other supply, you know, through digital or supply, physical could be our big challenges are big risks and. [00:41:00][10.4]

Bryce Leske: [00:41:01] So when to close it out, it's been a fascinating interview, so thank you for your time. If you think about book topia in 10 years, 20 years, you know, you guys are still shareholders still running the company. What does success look like for you? [00:41:13][12.6]

Wayne Baskin: [00:41:15] Yes, success looks like just growing a big business. To be honest, it's great, you know, Australia now, uh, you know, growing that into it into a pretty big business and then, you know, where do we go next would be the thing getting that distribution business really pumping, using our supply chain and using our tech and our logistics to its capacity, getting the efficiencies out of our distribution center and so that we can, you know, just ship books to our customers as quick as possible and but also, you know, as cheaply as possible. And then just to be able to supply Australia with books, you know, e-books, audio books or physical books, whichever way it might be. So that success to us and, you know, at the end of the day, you know, the growth of the business is number one and that that relies on our customers and servicing our customers really well. [00:42:03][48.9]

Bryce Leske: [00:42:05] Well, congrats on the IPO. What a journey. Second time round. Um, I can imagine it would be a good feeling. So we're looking forward to seeing how IPO grows over the next few years and a lot of our audience are interested in it as well. Thank you for your time today. Very much appreciated. Getting an insight into your journey and book type your more broadly. So I appreciate it. [00:42:25][20.4]

Wayne Baskin: [00:42:26] Thanks for having me on. [00:42:26][0.5]

Alec Renehan: [00:42:27] Thanks. [00:42:27][0.0]

[2408.7]