Sam Ovens Interview by Jake Millar from Oompher

About This Interview

Date: May 2015

Interviewer: Jake Millar from Oompher

Original Source: YouTube Video

Transcript

Jake Millar: (00:15):

Hi, I’m Jake Miller and you’re on oompher.com under our technology sector. A little over two years ago, Sam Ovens was living in his parents’ garage, living week to week after dropping out of university. Today, Sam is a 24 year old founder of snap inspect and a multimillionaire. We’re traveling to Sam’s decadent Auckland city apartment to ask him how he did it, is business about creating something cool? Or fixing a painful problem?

Jake Millar: (00:40):

Sam, thanks very much for being here. Appreciate it, Sam, for someone so young and having achieved a lot of things. Where did it all begin for you?

Sam Ovens: (00:48):

I guess it all began when I was at university sort of finishing my degree and doing an internship at Vodafone and sort of looking at what the rest of my life was going to be like. Just looking at how long it was going to take to progress through the company and to get promotions and stuff and seeing the reality of like four weeks out of a year freedom. You know, it just wasn’t what I wanted in my life. And I had a friend whose dad was quite a big entrepreneur and one weekend we are at her dad’s Island. And when I was looking around and I was like, I’m never going to have the freedom like this guy has or be able to do anything this guy does doing my current job. And that’s kind of when I realized I’d have to be an entrepreneur instead of work a day job.

Jake Millar: (01:40):

Did you have any entrepreneurial ambitions before that or was it more so working out what you wanted to do and then creating a path to go and do that?

Sam Ovens: (01:49):

So I never thought I’d be an entrepreneur. I always thought I’d work in an office or something. I just thought I’d do a marketing job. But I always, thinking back ever since I was young, I really liked my freedom. I loved doing what I wanted to do when I wanted to do it. And I wasn’t very good with other people sort of being in control.

Jake Millar: (02:08):

So the commerce is more of a career path versus entrepreneurship. More of a lifestyle?

Sam Ovens: (02:13):

I mostly just did commerce because that’s what everyone was doing. And I didn’t know what I wanted to do.

Jake Millar: (02:18):

And what drives you as an entrepreneur? Sam who inspires you?

Sam Ovens: (02:21):

I don’t really know who, but like what drives me is first of all, I just love doing what I do. I love finding problems people have, building products or services that fix those problems and making money from it. I mean, it’s awesome to get well compensated for doing that.

Jake Millar: (02:43):

So when you decided to become an entrepreneur and start a business, everybody would have had an opinion on your lifestyle. So is it important to drown out what everyone else thinks and just follow your dreams and do what you really want to do?

Sam Ovens: (02:55):

Yes, definitely. I mean, thinking back every single person I knew, friends, girlfriend at the time(Ashleigh Frazer Sam Ovens Wife), and my parents all sort of thought like it was a risky, risky thing to do cause I dropped out of university, left my internship, which would have turned into a job, left my flat, sold my car, moved back in with my parents and sat in my garage, telling everyone I was going to start a company.

Jake Millar: (03:23):

So Sam we’ve talked about this before, but before snap inspect you’ve been involved in various other businesses. And so what did you learn from those? I know now you’ve got sort of a four part market validation plan you use. So can you tell us more about that?

Sam Ovens: (03:36):

Absolutely. That’s the biggest lesson I’ve learned even still to today. How does that work? So basically with my first businesses, I just thought of something that was cool or thought of something that hadn’t been done yet or thought of, I just thought you had to come up with creative stuff and then once you’ve got it, try and sell it and that’s just the wrong way to do it. And that’s what most people do. And I learned this because I’d come up with these businesses and then go and talk to the customers after I had the product and they would just tell me, look, this is cool, but I don’t need this. And that’s when I realized that people have to have a problem and a pain and they have to have a need first for you to sell something to them.

Sam Ovens: (04:22):

So what I learned and how I created snap inspect, my current business is I went to the market first, which is property management companies. And we asked them what the most painful part of being a property manager was. They told us property inspections and we figured out a way to make them less painful using an app. And now their lives are easier and it’s much easier for us to sell this product because when we talk to them, they already know they have this problem. With other companies too, if I’m going to invest in a company I’d like to see first that the target market is well-defined. So instead of just saying, everybody is my customer, first of all, there’s a small niche like property managers or boarding schools or something like that.

Sam Ovens: (05:12):

Now the second thing I’d look for is they have a problem. And they have to know they have the problem, not the business owner, the business owner, can’t say, look, these guys have a problem. You want to hear it from them and you want them to almost be cringing when they tell you. It should be something that they wake up in the middle of the night about and have fears about going to work. That’s how bad it should be. The third thing is they should be willing to pay money to solve that problem. So small problems, people will just rather put up with them day to day rather than solve them when there’s money involved. So they have to be willing to pay. And the other one is just the scalability. I mean, how many of these people are there and how of them have this problem?

* Sam goes into more detail on this subject in his online course. Read our full Consulting Accelerator Review here.

Jake Millar: (05:58):

So with Snap Inspect, You sold the product to some of the customers before it was even produced. So is that an important thing today, when you are looking at investing in a business or starting a new business?

Sam Ovens: (06:07):

I typically won’t invest in a business until it’s already got some customers. Just cause I think that’s proof of a team and they’ve gone through that struggle and they’re not looking for an easy way out early on. But for everyone starting a business, they should absolutely sell their product or their service in advance. So a good way to do that, and what I did is after everyone told me this was the problem, I talked to them and drew on paper what the app would look like, I said this is how it works. This is what it will look like. This is how much it’ll cost, would you use this? And they said yes. Then the next step is to say all right well, I’m willing to give you 10 or 20% off for life if you sign up in advance. In advance of the product being ready, it’ll be ready in four months and then you can have it for life at a discount. And when you do get it if it isn’t what you thought, we’re happy to refund you. So there’s no risk on them essentially. But it’s validation that people will pay for the product that you were about to go and build. So it’s a way to remove your risk.

Jake Millar: (07:13):

Yeah, so many entrepreneurs with the primary market research stage just make a few calls and think that is such a small part of it. But what you’re really saying is that, that stage is the business, it’s working with the customers the whole way through and working out exactly what they want and tailoring that to their needs. So is that important.

Sam Ovens: (07:30):

People think like, you know, this is a waste of time. We just need to get the product. So, but actually the whole business stands on those foundations. I mean, if three people have the problem and then you build the whole product, you spend 10, 20, 100 grand, whatever, and then invest six months of your life to get it ready. Then you go back, you sell it to those three, then you start making more phone calls and no one else has the problem. Well then you’d start thinking well, I wish I made more phone calls in the beginning. It’s really important to scope all of that stuff out before investing any money. And more importantly before investing time.

Jake Millar: (08:06):

So when you started Snap Inspect, there was already competition in the market. So did you go in thinking you could do it better or more innovatively? What inspired you to go into a market that already had people in there?

Sam Ovens: (08:17):

So the main thing was that they didn’t have much market share. So there was three competitors in the market when I entered. And when I called property management companies, none of them were using any of these products. And I looked at these other companies and they didn’t have many customer bases. It was a unsophisticated sort of new market. And you know, it was only a few early adopters that were in the market that had sort of moved to these competitors. So there was lots of market share to eat. The other companies didn’t have much of a head start. They didn’t have much revenue at, I doubt they were even profitable and I believed I could build a better product and market it and sell it better. Do those still exist today? Yes, there are three of us that are really at the front of the market right now. Okay.

Jake Millar: (09:11):

You’re always striving to break new ground and innovate to become obviously the biggest and best in that field?

Sam Ovens: (09:19):

Yeah. So I mean, new features, ease of use, customer support and those are all sorts of things.

Jake Millar: (09:27):

Continuous improvement, continuous innovations, those sorts of things?

Sam Ovens: (09:30):

Yeah, I mean to build the product was only four months development since then we’ve done at least a hundred times that, so there’s more work actually maintaining the product once it’s built, then there is building the first version. So anyone starting a software company that thinks I’ll just build it and then sell it for the rest of my life, that never happens.

Jake Millar: (09:51):

So thinking globally is really important, especially with snap inspect, most of your revenue actually comes from the States. So do you think more Kiwi entrepreneurs need to think global? Do they think global enough?

Sam Ovens: (10:02):

No, they don’t. Right now, no Kiwis globally. I’ll give you a really good reason why they should. So we have a client in the US that has more properties under management than there are properties under management in the whole of New Zealand. So if we had every single property management company in New Zealand as a customer, they wouldn’t even be the size of one client that we have in the US. So you could spend 10 years and sweating, you’d never get all the customers there are in New Zealand and we could just get one client in the US and that’s more. So, the US is 98 or 99% of our revenue. Without them, we would literally be like microscopic. I can’t stress how important it is, and it’s not just the US it’s the US, the UK, Canada, Australia. They all speak the same language. I mean, there’s no real culture difference or anything. If someone has a problem here, they’ll have it over there. They speak the same language and they’re willing to pay. They don’t care where the company’s based. Those are your markets first off, all of them.

Jake Millar: (11:10):

So a lot of entrepreneurs face problems of web development. A lot of them spend a lot of money on that. Say in New Zealand, you might spend $10,000 versus $1000 overseas. Do you think it’s important just to go overseas and save money doing that?

Sam Ovens: (11:23):

Absolutely. If you’re building an app, if you’re building a software product, or if you’re just building your own website, that should be overseas. All companies in New Zealand overcharge for that sort of stuff. And it’s not them being criminals or anything, they just have high overheads. They have to pay market rate for their software developers and everyone here. They have lots of costs and overhead, so that’s sort of the prices they have to charge to make margin. Whereas overseas, it’s all very different. There are people in the Philippines who’s operating expenses are $100 or $200 a month, they don’t need to make the same amount of revenue to make a profit. So absolutely we built snap inspect, our first version in India. And everything else that we do is offshore.

Sam Ovens: (12:09):

The only real things we do onshore is sales and customer support because of the communication, we need good communicators.

Jake Millar: (12:17):

So Sam, what are your plans for the future? What’s what’s after snap inspect?

Sam Ovens: (12:21):

Yeah, so, I mean, it’s not after snap inspect because this company is still going. I’m still focusing a lot of my time on snap inspect and growing it, it’s still a very young company, there’s still plenty of market share left to eat. We only sell one product. We could do more products.. there’s lots of opportunity for growth there. Literally the company is only just getting started. So a lot of my time is focused on that, and I’ve also invested in a couple of other software companies based on everything I’ve learned over the past three or four years.

Sam Ovens: (12:54):

So diversifying investing in some other companies and information products, which is another industry that’s quite hot right now. The two major industries online that are exploding are software as a service, which is what snap inspect is, and information products. So online courses about entrepreneurship and how to start software companies and things like that.

Jake Millar: (13:21):

And you’re quite keen to keep going down that internet based business road, as opposed to sort of creating a product physically and then actually selling that?

Sam Ovens: (13:29):

Yeah, well the only brick and mortar business I have right now is my shared office space and the profit margins and the admin and everything are just no where near as exciting as the online space. If I want to scale my shared office space, I have to get a bigger premises, buy more desks, buy more chairs, and the amount of revenue, the amount of additional revenue I gained from that isn’t even that much.

Sam Ovens: (14:05):

So online is definitely more exciting and it’s a lot less capital intensive.

Jake Millar: (14:10):

Sam to finish off, what are your wise words for the people of New Zealand?

Sam Ovens: (14:15):

Find a market, find a problem and don’t build things that you think are cool. Don’t come up with ideas in the shower, or try to build a new Facebook or Twitter. Solve people’s problems and get paid for it.

Jake Millar: (14:33):

Sam. Thanks very much.