Recap: Insights on Growing a Global Business from Eddie Sheehy, Co-founder Nuix
At Startup Victoria’s November Growth Club Education Event, special guest Eddie Sheehy spoke to founders about how they can maintain control of their companies as they scale.
Startup Victoria’s Growth Club allows scaleup founders the opportunity to meet and hear stories from successful founders. After a short Q&A, the recording equipment is turned off so that founders can ask uncensored questions, making it a unique opportunity to gain valuable insights for their business.
Some of the stuff talked about at Growth Club can’t be shared. That’s why we’ve captured the main points from the event here so that you can access invaluable knowledge for your growing business.
“Growing a business is really hard. There are so many elements that you’ve never come across before. Learning from people who’ve done it hopefully stops you making those same mistakes. It’s a lot easier to learn from everybody’s successes and failures than it is to do it yourself.”Eddie Sheehy
When it comes to growing a business, there isn’t much Eddie Sheehy hasn’t done.
As the founder of e-discovery company Nuix, Eddie Sheehy built a global company with more than 400 employees in over 50 countries and over $100M in profits every year. In his time at Nuix, Eddie helped law enforcement around the world catch and prosecute criminals, famously donating software to help journalists decipher the Panama Papers, the biggest journalistic leak in history.
However, after 10 great years at Nuix, in the lead up to the Nuix IPO, Eddie lost control of his company. That’s why, after leaving Nuix in 2017, Eddie joined SquaredIA, an advisory and investment company which helps founders and CEOs accelerate growth without having to sacrifice their leadership.
During the hour-long session, Eddie talked about how:
- Building strong relationships and investing 9-10% p.a. in marketing contributes to Nuix’s growth
- Making your customers more money than you, retains customers to make you more money
- The CEO of a global company should visit all locations at least twice per year
- You shouldn’t hire graduate marketers to lead your team, it can set you back years
- Companies should partner with investors who can offer more than a cheque
- Every market is different, so businesses need to employ trusted, experienced and well-connected locals
- Founders and CEOs can keep control of their businesses as they continue to grow
Continue reading below for more insights from Eddie.
Startup Victoria’s Growth Club is specialised for founders of later-stage, scaleup businesses. If that sounds like you and you’re interested in joining Growth Club, submit an enquiry to get in touch with our team.
How to Build a Company
When Eddie joined Nuix in 2006, e-discovery – using software to make unstructured data easily searchable – was a budding industry. Nuix only had two competitors, but they were better connected with better and cheaper products.
Elements of Eddie’s strategy to turn the company around are surprisingly simple: Focus on customer service and be nice to people.
If you fix customer problems instantly and make your customers more money than yourself, you will never have retention problems. At the same time, any founder with a reputation for being nice will forge partnerships and attract strong talent.
As well, any CEO needs a deep working knowledge of their market and product, and to be constantly revising the company’s road map. In modern industry, rapid progress makes these factors challenging to keep up with. However, without this knowledge, it isn’t possible for a leader to steer all the other moving parts of a company.
“For the last 18 months, I’ve been fundraising and have gone through a whole set of experiences with investors I wouldn’t have thought would happen. Listening to Eddie, I completely got my confidence back.”Fiona Boyd, Co-founder and CEO, EdSmart
How to Take it Global
Eddie hates time zones, which, he says, make running a unified business difficult. On top of that, every market is culturally unique, and differences in business aren’t to be underestimated, even between places as similar as the UK and Australia.
To overcome these challenges, Eddie recommends a combination of trusted lieutenants and personal vigilance.
To manage the northern hemisphere, Eddie had a trusted and capable COO working out of Ireland, who could make decisions while he was asleep. He also had experience with local managers in each of their locations, who understood the needs of the customers in their region.
To manage these people as CEO meant long days for Eddie. He never left any of his 200 daily emails unread until the next day, when large time differences can delay replies by over 24 hours. He studied the history and politics of each region, to understand the climate in every place he operated in. Even with all of these measures in place, Eddie would still visit every location twice a year.
It is a lot of work, but it’s the price Eddie paid to take Nuix to 50 countries in just ten years.
“Being here with peers is incredibly important, because you know you’re not alone. Being a founder can be a very isolating role, so coming together like this has been invaluable for me.”Paul Evans, Founder, 5stream
How to Market a Global Company
In 2015, Microsoft named Nuix as the second-best inbound marketer among their global partners.
This didn’t happen by accident.
During Eddie’s time at Nuix, the company spent at least 9-10% of revenue on marketing, some years, as high as 12-15%.
According to Eddie, it’s possible to build a company up to $5M in revenue through partnerships but, after that point, it becomes untenable to grow through partnership. After that $5M mark, it’s all about brand.
Nuix’s PR strategy and industry blog were central to this strategy.
Eddie says, when it comes to marketing, it’s essential to hire someone with experience and a reputation. Graduates make mistakes that can set you back years. Talent might be expensive, but Eddie says, if you want to grow fast, find the budget.
“It’s good to get a warts and all view. It’s really important to hear about companies that have done the same sorts of things.”Alison Hardacre, Co-founder and Managing Director, Halaxy
How to Find Money
Nuix never needed funding, but the startup environment is different now, and most companies need outside investment.
In 2018, VCs invested $254B globally, compared to the $54B invested in 2008. This means even self-sufficient startups need funding to guard against well-funded competitors.
Eddie has a lot of experience with VCs through his time as a consultant at SquaredIA, helping Australian startups raise $80M over two years. He says that it’s important to chase what you need for the stage of growth that you’re in.
It might sound like a good thing to secure a tier-1 investor, but accepting a high level of funding too early might give investors more influence than you’re comfortable with.
Don’t sacrifice control of your company for funding and look for VCs who can give you more than a cheque, such as long-term support, industry connections or experience. Most importantly, when engaging with VCs, be frank in setting up terms and push back on bad deals.
Make VCs chase you.
If you focus on building a strong business, they will come.
“I love hearing about people who are years in front of me because it means that I can learn from their mistakes to avoid making them or identify those mistakes earlier.”Chris Naoumidis, Co-founder, Mindset Health
How to Measure Success
During his time at Nuix, Eddie worked in an exciting space, in a burgeoning industry helping catch criminals and prevent crime.
That’s why it was a shock to Eddie when the chair of Nuix’s board was done for money laundering. To make matters worse, the board sided with the chair, who refused to stand down. As it was, Eddie decided to leave Nuix in 2017, as the company was preparing to go public.
This was the low point Eddie’s time at Nuix.
That’s why Eddie is driven to help founders and CEOs avoid the same situation. He feels fortunate to work with such a diverse cross-section of different founders and a wide variety of different people. When it comes to business, there’s only one winner, and Eddie does what it takes to make sure founders and CEOs come out on top.
But Eddie also acknowledges that there’s more to winning in business than simply winning business.
Eddie greatest win from his time at Nuix?
After 10 and a half years of long days, high-stress, and global travel, Eddie finished at Nuix with his family by his side. You can make all the money in the world, Eddie says, but if you have no one you love to share it with, money is pretty boring.
What are your impressions of the Melbourne startup scene?
“It’s extraordinarily different. When I started Nuix, and even for the next five or six years, outside of Atlassian I didn’t really know there was another software company. When I came out of Nuix in 2017 there was all of this exceptionally vibrant startup community and activities going on. Not just in Sydney but in lots of other places. Brilliant little companies growing up. I’ve been blown away by it. I’ve had 2.5 years now helping them all – helping a few. It’s interesting, I come across a lot of technology-led-founder led companies. That’s different to a finance-led-founder led company. They’re all slightly different, it’s great to see the variety.”Eddie Sheehy