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Patrick Coghlan CreditorWatch.

October 16, 2023 · Hosted by Dexter Cousins

In episode 175 Dexter is joined by a returning guest, Patrick Coghlan of CreditorWatch, a leading Australian data and technology company offering a complete suite of credit reporting products and data insights covering the entire customer lifecycle.

About Patrick Coghlan

Patrick is the CEO of CreditorWatch. In 2010, he became one of the three founding employees of CreditorWatch. He was appointed CEO in December 2018.

Patrick is a specialist commentator on issues in the credit industry and regularly appears in the media as well as presenting to corporate and government stakeholders. He has played an integral role in transforming the approach to the management of B2B credit risk in Australia.

Patrick has led the development of CreditorWatch’s values and team-spirited culture, as well as driving the company to considerable growth. He has a Bachelor of Arts from Sydney University and is a graduate of the Australian Institute of Company Directors.

About CreditorWatch

CreditorWatch is a leading Australian data and technology company that provides businesses with access to unique data and innovative products. By using our platform, our customers can confidently manage their commercial relationships, improve productivity and reduce financial risk.

As a commercial credit reporting bureau, CreditorWatch offers a complete suite of credit reporting products and data insights covering the entire customer lifecycle, from customer onboarding and credit decision automation to credit risk management and automated collections.

Links from this episode.

Patrick Coghlan on Fintech Chatter.

More on credit risk and open data.

Full transcript.

Lightly edited for readability — filler words removed, wording otherwise unchanged.

Dexter Cousins
Welcome to Fintech Chatter, presented by Tier One People, leaders in fintech executive search. Follow us on your favourite podcast player or Fintech Chatter TV on YouTube.

Hello and welcome to Fintech Chatter, the show for everything fintech down under. I’m your host Dexter Cousins, and today’s guest is an old friend of the show, Patrick Coghlan from CreditorWatch. Patrick, welcome back.

Patrick Coghlan
Great to be here. Thanks for having me.

Dexter Cousins
I’ve been looking forward to this. It’s good to see you, my friend. It’s been a while. I think you made your debut in 2020 when we did the People’s Choice emerging leader of the year.

Patrick Coghlan
That’s right, yes.

Dexter Cousins
And it definitely wasn’t face to face like this in a room, was it?

Patrick Coghlan
No, it was in the midst of lockdown, I think.

Dexter Cousins
So nice to get to do this in person.

Patrick Coghlan
Yeah, good to have you here.

Dexter Cousins
Yeah. And I’ve got to say, amazing to be here at the CreditorWatch offices. Just incredible. Even on a gloomy day, Sydney Harbour looks glorious.

Patrick Coghlan
It is. It’s shimmering out there. Yeah, we’re very happy with this space.

Dexter Cousins
Yeah. Well, what I thought we could do today, maybe have a chat a little bit about CreditorWatch and what you do, but also, I guess, you uniquely positioned to kind of tell us and give us some insights as to what’s actually going on in the economy, and kind of how that translates through the potential opportunities for fintech businesses and new startup ideas. But before we go down that path, Patrick, do you want to maybe just give us a little bit of an insight into CreditorWatch and what you do?

Patrick Coghlan
Yeah, sure. Thank you. So look, we think of CreditorWatch as a technology and a data company. I think in a more traditional, old-school sense, we’re a credit reporting agency or a credit reporting bureau, effectively. We started out as a provider of credit reports, some debt collection tools, credit risk management solution for small businesses. You know, this is going back 13 years ago. There was nothing out there for them, and we thought, you know, there’s a million, two million small businesses out there. Let’s create something for them. Let’s create a tool that the big banks and the telcos and lenders, you know, all over the world utilise, for small businesses. And we obviously built it.

And every year since then we’ve actually targeted larger and larger organisations. So within a few years we weren’t just targeting small businesses, we were targeting, you know, traditional users of credit bureaus. And now what we find is we’ve got this end-to-end product offering that small businesses can use, and we’ve got big four banks using us. And that is ultimately credit risk data and credit risk management software. So how can I onboard a customer in a really nice, frictionless way? How can I make sure that they are who they say they are? So you’ve verified them, check their credit history, their credit rating, their credit report. Do I want to do business with them? And then keep an eye on them ongoing, right?

So really, you know, we’re trying to make it easy for businesses, regardless of whether you’re in trade credit or in fintech land, which is obviously a little bit more specific for your audience. We want you to be able to bring a customer on board fast, say yes really quick with shity, and then ensure that they remain a really healthy customer for the entire customer, you know, lifetime that they’re with you.

Dexter Cousins
So one of the challenges that a lot of fintech businesses face, I would assume as a challenge that you faced at CreditorWatch as well. We talk about the big banks having a monopoly, but the credit bureaus as well, you kind of had a, you know, a monopoly themselves. How has CreditorWatch been able to break into that?

Patrick Coghlan
Yeah, for sure. So there’s been a duopoly in Australia for, you know, generations. And I think we were probably naive around, you know, how hard it would be. And, you know, I think if you were to, you know, look at it in a real sort of product market fit sort of perspective, maybe get a consultant, the consultant would come back and say, don’t even bother. But fortunately we didn’t really have a sense of what we were doing 13 years ago, and we went into it, I guess, eyes wide shut, and here we are, still around and really thriving 13 years later.

So you’re right, there was a duopoly in place, but I think we’ve been able to really break into it, particularly in the fintech lending, banking space, because we’re offering new, more modern technology, better uptime, faster, you know, connectivity, and just removing, you know, those huge barriers around integration and getting data from, you know, point A to point B really fast. You know, traditionally that takes, you know, huge amount of developers. It needs, you know, ongoing support. There’s, you know, issues around end-of-life, you know, software or technology. And we’ve really, I think, particularly in the fintech space, I would like to say, have done a fantastic job of really breaking into that market as a result of that.

And I think if you think of fintechs, they’re doing the same thing, right? Like you sort of touched on, they’re trying to create something for customers or the user. It might be, you know, there might be software for a fintech to be able to operate, you know, more efficiently and with lower overheads.

Dexter Cousins
So tell us more about CreditorWatch and how it’s structured as a business.

Patrick Coghlan
Yeah, so, you know, we have a real desire to innovate, right? That’s where it came from. We were trying to create a solution for a problem that small businesses had. Now, we don’t only target small businesses. We know that medium and large and banks and fintech, etc., all have similar struggles or issues, and that we’re quite keen to solve. So we’ve got all of our product development teams in-house in Sydney, and then we’ve got sort of sales and marketing across Sydney, Melbourne and Brisbane as well. So we service the whole market.

We think about the markets that we’re going after. So we’ve got small business teams, we’ve got what we would call sort of mid-market corporate teams, and then we’ve got teams that look after, you know, the big end of town, those really, you know, tier one lenders, or the big brands that you would see on the sides of buses and at the of buildings. And we really try to service them with a segmented approach, because we know that what a big four bank wants is very different to what a small business owner with, you know, three or four employees needs.

Dexter Cousins
So you’re an ASX listed organisation?

Patrick Coghlan
Not yet, and no plans to. Actually, let me get that right. We are an unlisted public company, given the number of shareholders that we have. So really we’re a private company still.

Dexter Cousins
Right. And so what does that mean for you as CEO then?

Patrick Coghlan
Yeah, look, there’s been a big shift over the last few years. We initially, well, the shareholders sold the business to a company called Infot TR in 2017, and that was a really good deal for buyers and sellers. They were really supportive of me as I moved into the CEO role quite soon after that transaction, and ran the business, provided capital and strategic advice. And then we actually demerged from them late last year. So our shareholder base is the same as our old parent company shareholder base. Instead of having a single corporate shareholder, we’ve now got some 55 shareholders.

And what that’s allowed us to do is become more independent, sort of run our own show even more than we already did. You know, if we need to go and get capital, for example, it’s on us to go and get it, rather than, you know, asking, you know, the parent company, mum and dad, for more money. And it just gives us, you know, that independence to go and, you know, really plan for the longer term. We had a great relationship with our old parent company, we still do, but as a result of that split we’ve put a formal independent board in place. We’ve got some tremendous directors on board with, you know, amazing experience.

And it’s actually forced the whole company, particularly me, to all step up to be more sophisticated and move away from that, you know, more traditional sort of startup, early scale-up, into a scaling technology business. You know, you start to think about, you know, monthly board meetings that we have. We want to start really thinking and understanding, you know, our risk appetite and what sort of potential pitfalls exist out there, and ensure that we’re mitigating against that. Start thinking longer-term strategy. So we just had the opportunity to go through and formalise our three years strategy with some external consultants as well, rather than, you know, what are we doing this week, what are we doing next month, actually, you know what, change that idea, let’s go and chase something else.

It’s great to be able to say no to things. I think that’s really important. It’s not just about where you want to play, it’s about where you don’t want to play, what you don’t want to do. Even though, you know, there’s a good revenue pool there for you, you’re really confident to say no, we’re going to stay on this strategy and really go after…

Dexter Cousins
I want to talk about that a bit more, because what I see a lot of, particularly as we kind of enter into, you know, different economic times, challenging for some businesses, is, you know, kind of the pivot, right? And everybody talks about the pivot.

Patrick Coghlan
Yeah.

Dexter Cousins
And oftentimes what I see, having recruited through three downturns, is a pivot’s in most instances actually not a good thing.

Patrick Coghlan
Yeah.

Dexter Cousins
And it detracts from actually your customers and delivering on what you’re really good at.

Patrick Coghlan
Lose a lot of momentum.

Dexter Cousins
And lose momentum. And by the time you kind of get the point where you might start to get momentum, the market’s come back and you’re missing out on, you know, the kind of traditional business that you had. What’s been your experience of kind of, you know, looking at those different revenue streams, looking at pivots, and kind of have, as you say, having that discipline to say no to stuff?

Patrick Coghlan
Yeah, so I think, you know, going through this strategic review, if you will, nothing really changed for us, which is good. So we certainly didn’t pivot. Instead of, I guess the best way to describe it, instead of going after 10 things, we’re probably going after five. And it’s given us the confidence to go, we can go after those things that we already do really well and just do better and faster and grow more. And it’s giving us the confidence to know that the market size is there. We can continue to grow in that space for the next three to five years and not sort of saturated.

We know that, you know, from a competitive landscape perspective, we’re already doing it better than our competitors, so keep driving that and drive the distance between you and your competitor. And it also makes you really aware of where you’re using, your spending, your resources, allocating, you know, people, time and money, to ensure that you’re doing it more effectively as well. So you’ve got, you know, we’ve got a lot of confidence in ourselves as a, you know, management and company, and the directors have that, and then, you know, obviously the really good support from the shareholders as well.

Dexter Cousins
Yeah. How have you found having the board come on board? Because one of the things I’ve noticed in this last 18, 24 months, particularly with earlier-stage businesses and founders, there’s been, I think, you know, fair to say, a little bit of confusion as to what a board is there to do. They’re not there to tell you the strategy, kind of.

Patrick Coghlan
Yeah.

Dexter Cousins
So how have you found working with the board, and what’s that experience been like for you?

Patrick Coghlan
Yeah, it was really new. So if we go back probably two years ago when we put it together, almost two years on to the month, you know, their expectations were a lot higher than what we could actually deliver, because we just didn’t have a lot of the data in-house, for example. And it was also new for us because we’d never had this, you know, real formal board to prepare for and present. So there was probably a six-month feeling-out period for both of us, and we all ended up somewhere in the middle, which was really nice. And now I relish it. I look forward to the board meetings.

And, you know, what they provide is a sanity check. They provide that challenge to go, well, hold on, you’re going to do that? Show me why you’re going to do it. And then they’ll probably ask why a couple more times. That’s something you learn, particularly if you go through your Australian Institute of Company Director course. You know, ask why, why, why. Get challenged to make sure that, you know, they really have a good sense of why they’re actually, you know, going to spend all that time and money on a certain project or initiative.

The other thing it’s provided, I’m talking about downturn, is, you know, they had a really good sense of, you know, what’s going on in capital markets, what’s going on in technology world, what’s happening in the financial markets. And, you know, they’ve got a great spread of experience, and they forced us to put in, effectively, a minimum cash balance that we couldn’t break, a cash floor, if you will, within the business, almost 18 months ago, possibly a touch longer, to go, hey, there’s some storm clouds up ahead. This is the minimum we want in place. If you want to break that, you’ve formally got to come to the board and get approval for it.

And what we saw quite quickly thereafter was obviously this deterioration in markets, and particularly technology circles around the world, and we were just so well positioned for it because we were set up. Now, I like to talk about CreditorWatch being quite unique in that we’re a technology company that’s not only growing, but we’re profitable, we’re hiring people, and we’ve got, you know, quite a significant amount of money in the bank as well, which I think is quite unique in circles. I mean, there’s plenty of companies that we’ve seen, unfortunately, you know, have to lay people off or have gone, you know, into administration or had to merge or sell. You know, we sort of positioned ourselves really well a couple of years ago, and a big part of that is thanks to the board.

Dexter Cousins
Awesome. Now, one of the other things that to see is often an identity crisis. You do see this a lot with listed fintechs as well, where you kind of get this pressure from investors, analysts, that you kind of, you know, your business model isn’t necessarily what the analysts or investors kind of hope it to be.

Patrick Coghlan
Yeah.

Dexter Cousins
And, you know, what I wanted to ask you about CreditorWatch is, you mentioned at the intro, your credit bureau, but you got all these product teams and you’re technology focused. How do you get the message across to investors around, hey look, yeah, we use technology, but we’re actually a credit bureau, so don’t assess us like we’re a tech business that’s going to go on and be a, you know, deca unic?

Patrick Coghlan
Yeah, yeah. Well, I would probably say what we do is we actually talk about ourselves externally and internally as a technology company, or technology and data, because most people don’t know what a credit reporting bureau is, and we are totally set up like a technology business. So it makes much more sense, I think. I’ll use the credit reporting agency, reporting bureau, when, you know, talking to those that are, you know, used to it, I guess, in our market.

Dexter Cousins
Customer.

Patrick Coghlan
That’s right. A customer. That’s exactly right. But really we operate and think about, you know, SaaS metrics, technology valuations, that sort of thing, in all of our thinking, and then that resonates through the business. So our preference is to not be caught up in the credit reporting world. It really is a software or technology play.

Dexter Cousins
I’m going to talk a little bit about your kind of background and journey into the CEO role, but before we do that, as you mentioned, you kind of, you’re on a fairly unique spot here at CreditorWatch with the data that you’ve got access to. And, you know, it is, you know, we are seeing some kind of tough periods at the moment. I guess, you know, from the data that you’re seeing, what’s your kind of overall senses to the state of the economy right now?

Patrick Coghlan
Yeah, look, it’s really tough, particularly for small businesses. And I think, you know, most people in fintech world have built a solution for small businesses, particularly, you know, from a lending perspective, if we think about it, or even payments and whatnot. We are most likely at, you know, peak interest rate. You know, there might be one more. And I think there’s sort of two really key horizons that, you know, ourselves and our customers often talk about. One is when we’ll get somewhat of an official nod from the RBA that there will be no more interest rate rises. But I don’t think we’ll get that official nod after the, you know, the official nod two years ago, no interest rate rises until 2024. So yeah, we won’t get that. But I think you’ll get that confidence through chief economists and the media. And then the second will be, you know, when we’ve got confidence that there’ll be the first, you know, rate cut.

So that’s the sort of, you know, high-level macroeconomic view. It’s going to get harder from here. We know that administrations are on the rise. All of our own internal sort of proprietary data is showing us that companies are doing it tougher, particularly small businesses. They’ve got less cash, they’re taking longer to pay, their profile or probability of default, so the likelihood of them going into external administration the next 12 months, is continuing to rise. And our forward predictive data shows that that will happen, for, you know, continue to rise for another few months. It will then plateau.

So this concept of higher for longer, you know, with interest rates, they talk about that in the US, and is now starting to resonate in Australia, that that will be the same from an administration perspective, you know, a failure perspective, that the probability of default of Australian companies will be higher for longer. And that probably takes us through to at least mid next year, sort of June, July next year, before we start to get, you know, a little bit more confidence around it coming off.

But the fact is that interest rates, you know, we’re really feeling the pinch of that at the moment, both as a consumer and a commercial entity. Inflation still remains quite high, even though good signs that it’s coming down. And we’re not going to see a big change or shift from a, you know, a global or a local, you know, macroeconomic perspective that will make it easier. So it really is, it’s tough out there. And small businesses, as we know, they don’t have access to capital or debt markets like, you know, larger organisations, so they probably, you know, are living month to month at the moment.

Dexter Cousins
So if you were going to put your kind of founder hat on, Patrick, and you were looking at this data, where would you see potentially opportunities where fintech can help?

Patrick Coghlan
Yeah, so it’s a really good question. And I think if we take away the capital market situation, right, it’s going to be difficult to raise money as a fintech, as a startup, even as a scaler, let’s put that to the side for a moment. I think this concept of productivity, automation, efficiency is really important. You know, the government and the Productivity Commission is talking about it all the time, that we’re sort of, you know, well off where we need to be. So I think anyone who’s helping businesses do business better, faster, more efficiently is going to be positioned really well to have success.

I think the struggles for small businesses getting access to capital will remain forever. The challenge for, you know, smaller lenders and fintechs is that, you know, their cost of capital has risen significantly. So to compete against the monopoly or the, you know, the big four, the big six, is really challenging there. But, you know, small businesses still need and want access to capital, and they’ve shown that they’re prepared to pay more for it than, you know, what they probably should.

So yeah, I think productivity and efficiency for us is the really big thing. And look, that’s something that we focus on. We want to be the pipes of, you know, every commercial lending decision in Australia. You know, if we can help you say yes more often, safer and faster, then that’s what we’re prepared to build towards.

Dexter Cousins
Awesome. Now, on that note, CDR. You know, it’s, you know, we’re what, three years in now, seems to be moving at a pace probably not quick enough, certainly for the fintech industry and for startups who, as you’ve pointed out, you know, kind of running out of capital. Where do you see a business like CreditorWatch being able to evolve? And really, we talk about CDR being the Consumer Data Right, but also believe that, yeah, commercial data is probably where there’s a better use case for right now than, say, consumer data. What’s your kind of view as to, you know, the CDR, credit, and where CreditorWatch can play, and as you talked about, that being that pipes and plumbing for, you know, the kind of commercial infrastructure?

Patrick Coghlan
Yeah, look, I think anything that requires sort of government legislation, initiatives, is really challenging. Now there’s, you know, it’s not, we’re not here to obviously bash government. That’s just the way it works, right?

Dexter Cousins
It is, right?

Patrick Coghlan
Two very different worlds, right? And it’s never going to change. And, you know, they’ve really got to, you know, measure five times, cut once, rather than, you know, the rest of us who measure once, maybe measure before we cut. So that’s always going to be a struggle. And I think any business that gets into an industry that is really reliant on government initiatives, legislation, movement, you know, runs the risk of never having a decision made and therefore, unfortunately, running out of cash, despite the fact that they’ve got, you know, a genius idea that could be a, you know, a billion-dollar idea.

So I think, yeah, I think CDR certainly has a really important job to play, or place to play, in the commercial world. I would like to think that, you know, businesses are probably more willing to share data, right, to actually facilitate a decision than a consumer, particularly with all of the hacks and, you know, security, cyber incidences that happen every week now. So I think that that’s a positive. But at the moment, the way it’s set up is just so unbelievably difficult for, you know, commercial companies to actually participate that it just won’t go anywhere until those have changed.

You know, I think you have to, there’s that opt-in, opt-out sort of challenge that exists. Sometimes you got to go into the bank itself to actually opt in to be able to use it. If you’ve got multiple signatures, all of those sorts of things that you don’t really appreciate. It should be just turned on, off you go, let’s get on with it, right? So look, I think it’s got a fair way to go.

Now, there was a bit of a sprint a couple of weeks ago, and that was, you know, announced right around the time of Intersect, which is good, but it kind of feels like interval training. You know, there’s a sprint and then it’s really, you’re sort of just plodding along for a while, and then there’s, you know, news that comes out of the government. I’m a little bit cynical about it, to be honest. I think we’re still a couple of years away from it being properly adopted, not even fully adopted. I think I’ve got, someone will owe me a lunch or I’ll owe someone a lunch in the CDR world if it’s not up and running by the end of this year, and I’m feeling quite confident about that. Hopefully he’s watching or listening.

And then look, from CreditorWatch’s perspective, we obviously keep a really close eye on it, because it will help facilitate credit decisions, right? And it will help facilitate faster or more accurate credit decision. So it’s definitely a place we will play. And if I was to sort of, you know, guess, I would say it would be a sort of partner with someone who’s really, you know, good at it or the best at it, to be honest, rather than try to build it ourselves, given how technical, complicated and challenging it is, with the need to rely on government.

Dexter Cousins
We’ve talked about the economy a bit, and it’s not to dwell on it, but I think it’s just that, you know, the dynamics have shifted so much. And there’s something that you just said before which I think perfectly kind of summarises what I think is, has been, the challenge for people to get their head around, you know. And this is where you’re building businesses on the promise of a legislative change down the future, or something that’s going to be a decade off, you know, in this race to be first. And I think we’re kind of at a moment in time where the race to be first isn’t worth winning right now, and the race to just get revenue in, customers, is the one that everybody should be running.

With that in mind, like, with CreditorWatch, what has been the approach that you’ve taken to building from a technology perspective? Because, you know, this has gone back, like, even pre-COVID, right? I remember I’d be talking to chief execs, and it was whether they were in a, like, 10-person startup or an exec in a bank, and the one thing that was keeping them awake at night, you know, there’s lots of things, you know, cyber security and all that stuff, but the thing that was keeping them awake more than anything else was, is the thing that we’re building even going to be relevant in 12 months’ time? How have you, as CEO of CreditorWatch, taken that lens on technology and built stuff that you hope isn’t going to be irrelevant in 12 months?

Patrick Coghlan
Yeah, really good question. The reason I was smiling is because we’ve, you know, had this sort of internal debate quite recently around this concept of product-led growth versus sales-led growth. And I think, you know, historically we’ve always been, despite the fact that we were really innovative and we introduced new products and systems and solutions and data to the credit reporting world, the old sort of stuffy credit reporting world, you know, we were always sales focused, sales-led. You know, if we had, if we were, you know, we raised capital, we went and got salespeople, and we would, you know, build, you know, a new product off the back of some feedback from a client, but we were obviously selling to them first rather than, you know, getting the feedback first, if that makes sense.

So we were always sales-led, but building, you know, really innovative products. And then more recently we had this internal debate as part of this, you know, strategic thinking, is, you know, what are we? Are we product-led? Are we sales-led? And it’s going to sound really corny, but we’re actually what we call customer-led, because we couldn’t actually come up with, you know, confidently say that we were product-led or sales-led.

So I think the long, the sort of long-winded answer there, to get to the short answer, is, you know, we’ve always been focused on bringing revenue into the business, because we didn’t go out and raise, you know, millions or tens of millions of dollars to give us, you know, two, three, four, five-year runways. You know, we always had to make payroll, you know, the next month. So that sort of historical legacy mentality has meant that we’ve always been very focused on ensuring we are not only selling what we currently have, and therefore paying for any future innovation, but really, really challenging our thinking around, all right, if we are building this, how sure are we that there is a market for it, right? Are we going to spend 12 months building something and, like you say, there’s no market for it, or the market has shifted?

So I think, you know, we’ve been quite hyper-sensitive to that, and I think sticking to the core has been really important. And we have this concept in the business now of core, then more. You know, focus on what we do really well and focus on things that exist around our core offering, rather than getting excited or distracted by the shiny things that exist on the horizon or potentially, you know, on the per. Because you can spend a lot of time and money and realise that, you know, I should have spent that, you know, million dollars’ worth of R&D on, you know, upgrading my existing product, for example.

Dexter Cousins
I want to talk about your kind of trajectory into the CEO role. So how did you get started with CreditorWatch?

Patrick Coghlan
Yeah, so out of uni I started working for a small publishing business, selling digital advertising, online advertising, to brands so they could advertise on this small business publication website. And I did that for a couple of years and then wanted to go out and, you know, work for a Fairfax or a Google or a Yahoo, you know, a larger publisher. And then the thinking was I’d do that for a couple of years here in Australia and then maybe go off to New York or London and work overseas.

The guy who I worked for, Colin Porter, said, look, I’ve got this idea here for another business when you come back from travelling. I was going away, went South Africa for the football World Cup, and came back and chatted to him about this business idea that he had. You know, he hadn’t hired anyone. It was just, look, my advertisers, as you know, advertise and then don’t pay their bills. And then, you know, we speak to our competitors and say, did so-and-so pay his bill? That didn’t pay us either. It was like, here’s a real problem that every small business probably deals with. Let’s create a solution for it.

So I thought, okay, like, let’s give it a go. And that was CreditorWatch back in the day. So the MD of the publishing business was the MD and founder of CreditorWatch. There were three of us at the very beginning: myself, Colin and our chief technology officer, Dale Hurley. And we literally set about, you know, whiteboarding what this solution for, you know, bad debt look like for small businesses. And that was, yeah, 13 years ago in August.

So it was, no one really knew what was going to happen. You know, even back then, sort of startups weren’t necessarily a, you know, a thing. You know, you just were starting a business. The concept of, you know, venture capital was very new, and none of us came from the credit reporting world. None of us came from, you know, the technology, software, venture capital world either. So it was really brand new, and we just went, let’s give it a go and see where this takes us. And we were fortunate that we were able to raise some capital, about probably 18 months, two years in. They were quite supportive of the idea, which is really good. And from there we basically focused on, as I said, revenue, which allowed us to continue to hire and hire, and really we’ve kind of kept that through from then.

Dexter Cousins
Do you feel like you’ve changed much as a person on that journey?

Patrick Coghlan
Yeah, a huge amount. Huge amount. I mean, I was 24, couple of years out of uni, single. I’m now married with two kids, so that’ll change you, for the better, I will say. But I think also every sort of two or three years it was like a new role and a new business, right? You know, we were whiteboarding, you know, what we were thinking of doing, and then we were building, and then, you know, we raised capital and then we deployed that capital and we started hiring people. And, you know, all of a sudden you get to sort of some key points along the way, like 20 staff, you know, almost cash flow break-even, cash break-even, you know, 50 staff, profitable, 100 staff, you know.

And it just sort of happens. You rarely actually sit, have a conversation and reflect on it, but it really is a different sort of role every few years. And talking about putting the board together, you know, this is a really different role for me, that started probably two years ago when those board members came on, and we were able to go out and get some really, really good quality executives that report into me across, you know, product and finance and HR and marketing. So yeah, it’s been a wonderful journey.

Dexter Cousins
So where have you gone then for guidance and mentorship? Because I would assume, to go on that journey, you know, and you’ve kind of come from the, you know, the same people that you’d worked with previously, and you founded, you know, were part of the founding team with those people, you’ve not really had the experience of kind of working in big corporates and kind of going through that, you know, experience of just seeing how other people do it and how other businesses operate. So where have you gone to kind of get that input and guidance and mentorship and just experience?

Patrick Coghlan
So look, I think we were fortunate. Obviously Colin had run businesses before, so we had that, you know, that really good sort of senior person within the business who’d run smaller businesses, which was great. One of the directors who came on board from the VC fund, I’ll call it, provided, you know, just good guidance and governance around ensuring that sort of financials and documentation and things like that were in place. And I remember him sort of testing me. Okay, you know, you’ve got sort of five of you in sales now. What’s your sales, do you know what your sales pitch is? And yeah, we know what it is. And he was like, okay, so give it to me. I was like, okay, yeah. Yeah, literally was sell me this pen.

And you quickly realise, like, okay, maybe it’s not as slick written down, and everyone’s singing from the same, you know, hymn sheet. So that sort of, that definitely helped. You’re also, like, startup world, just head down, bum up, work, work, work. Your head pops up every 12 months, you know. And we were fortunate that we were growing and winning, which makes things a lot easier, right? Revenue growth gives you oxygen.

And then there were some sort of key points along the way. Obviously selling the business in 2017 to Infot Track, we started to get a lot of guidance from them, because they’d been on a sort of similar tear to us, but they were probably five to seven years ahead of us. So the chairman came onto our board, and he would provide advice, and we’d go away and we actually implemented a, like a strategic framework for the business and for the executive and for all staff, which was really beneficial. We never had anything formal like that in place. And obviously more recently the new board and demerging has taken us to that new level and giving us exposure.

But yeah, we would lean on, obviously, people either in the industry or, you know, those that we would meet along the way, to take advantage of their knowledge base. And then as we’ve got bigger, we’ve obviously been able to rely on either formal, you know, advisers, board members, or, you know, I’ve done a couple courses as well that have really helped.

Dexter Cousins
What’s really interesting about your journey, Patrick, you obviously, I meet and deal with a lot of founders, and when it’s your idea and it’s your baby, ego gets in the way, right? And, like, a founder, you’ve got to be ego driven, otherwise there’s no way you would ever, be crazy enough to do it. But I think also what that can do is it can kind of put a block, as you know, barrier, as to learning.

Patrick Coghlan
Yeah.

Dexter Cousins
By the sounds of it, you know, how you’ve explained your journey, it’s almost that you’ve been like the sponge and just absorbed all of this kind of information and people. And maybe it’s because, you know, yeah, you were there from the early days, but it wasn’t necessarily your baby. Maybe being able to have a little bit more of an open mind.

Patrick Coghlan
Yeah.

Dexter Cousins
Start learning.

Patrick Coghlan
Yeah, actually, I hadn’t thought about that, to be honest. It’s a very good point that you’ve made. I think in a similar way to the question you asked before around, you know, advisers or, you know, input, influence, as we’ve got bigger we’ve been able to get people into the business who are better at their job than you are. We’ve, you know, I’ve always had that concept of, you know, you can’t be the best at effectively anything, right? You want the best people doing their jobs, whether it’s marketing, product, technology, finance, etc.

So we’ve been fortunate to get those people in, particularly into sort of key spaces like sales and technology and product, you know, years ago, more so recently. We’ve got what other people have come in, who come to you with their ideas and how they’re going to do it, and effectively you’re either testing it or going, that’s a great, that’s so much better than, you know, what I would have come up with. How can I help facilitate this? How can I help do it faster? What do you need from me?

So I think there’s, you know, there’s always been a lot of trust in the executives and senior managers and leaders within the business, regardless of whether there were sort of, you know, 30, 40, 50, or we’re at 180 now. You know, we’ve always been able to rely on the people in the business to help drive it forward. And yeah, you’re right, there’s been a, I’d like to think there’s been a significant lack of ego within the business. No one wanted to do it, you know, this my-way-or-the-highway type of arrangement.

And then more recently, I think once you’ve got that formal board in place, it’s very difficult for, you know, a single person to have total control, right? Because you’ve got those guard rails and someone asking why, why, why, why, why, over and over and over. I think also, you know, we put a huge emphasis on culture. And I think if you were to be that sort of egomaniac who’s leading the business and you can’t convince others to come on the journey with you, then you ultimately won’t be successful, particularly as you get bigger. You simply cannot do it all on your own once you get to sort of, I would say, 50 people.

Dexter Cousins
You got kids, right?

Patrick Coghlan
Yes.

Dexter Cousins
I think everybody believes, like, looks at culture like they look at their kids. Everybody thinks their kids are awesome, everybody thinks their culture is awesome, right? And I think one of the kind of challenges that you have, and I think, you know, you talk about becoming a parent, and it is a life-changing experience, it certainly was for me. And I think, you know, the hardest part about being a parent is that the feedback is right there in your kids. And I’ve got experiences, you know, we still have them, just yesterday, right?

Patrick Coghlan
Yeah.

Dexter Cousins
Kids do something that you don’t necessarily agree with, you know, where did they get that from? And look at your wife, say, she’s looking at you and going, yeah. And you’ve got to look in the mirror. And you, you kind of, and I think that’s ultimately what culture is, right? Reflection of how you are a leader. And the bad stuff, kind of, you know, that’s down to you, right? Not down to the staff. That’s down to you and how you lead. And I think it’s kind of one of the, you know, challenges around cultures. It’s not these words, not these aspirational, mirror of who you are as a leader and a chief exec.

Patrick Coghlan
Yeah, yeah, that’s right. Yeah, spot on. It is really important. And I think there’s obvious metrics or ways of measuring whether that culture that you think is great is actually great. And, you know, our retention has been really, really good, even through, you know, being a software company when, you know, product, particularly product people and developers were getting, you know, silly dollars thrown at them left, right and centre through, you know, 2020 and 2021, 22. We were able to really, really hold on to, and also recruit.

You know, CreditorWatch isn’t a brand name, not CBA. We’re not at lassan, we’re not zero. You know, we’re what I would say a fairly, operating in a fairly unsexy part of the world. But we were able to recruit, and we still are growing. We’re able to recruit really, really good quality people to the business. So I think that the cultural narrative resonates really well. And I think getting your staff behind your strategy and where you want to go and why you want to do it and how you going to do it is really important, because if they’re on board with it, they’re the ones ultimately who are going to drive the success of the business.

Dexter Cousins
Now, we get amazing talent listening to the show. I’m sure there’s some that are listening that probably quite interested in, you know, the CreditorWatch business and the journey that you’ve been on. Obviously if they’re listening, you know, a shout-out to where they can find out more about careers. But what have you got planned over this next 24 months that, if there is somebody listening, could be part of that journey?

Patrick Coghlan
Yeah, look, we’re at the beginning of, you know, this big three-year push, three-year effort, strategy, whatever you want to call it. And I’m genuinely as excited as I’ve ever been within the business. I think, you know, we’ve got a real clear understanding of where we want to go and how we’re going to do it, and some of the numbers and the goals that we’re putting up in front of us, they’re big. So to go and achieve them, there’s going to be a huge sense of achievement that comes with them. We also, I would challenge almost any business to say that they have more fun than CreditorWatch. Now again, credit reporting isn’t a sexy space, but Jesus, we have a lot of fun along the way as well.

Dexter Cousins
Yeah. I tell what, I’d work here just for the offices.

Patrick Coghlan
That’s it. That’s it. There, the V of confidence views.

Dexter Cousins
Yeah, yeah, yeah. Well, Patrick, it’s been fantastic to have you back on the show. Really great to hear about the business kicking on. Where can people find out more about careers?

Patrick Coghlan
Yeah, you can, to be honest, you can slide into my DMs on LinkedIn if you want, or you can go to CreditorWatch. I think it’s under About Us, there’s a careers page, in the footer as well. You can click on there and have a look. But to be honest, if there’s a role that’s not there that fits, you know, what you’re looking for, I’m always keen to meet new people within the industry, or people that are interested in joining CreditorWatch. We often will find good people come to us via a referral or, you know, through the contact page or through LinkedIn, and, you know, we often find a role for them, because, you know, we’re growing fast. We know what we need for the future, and if we need to accelerate investment because we’ve, you know, come across a really good candidate, then we’ll do that.

Dexter Cousins
Brilliant. Well, as always, thugs thanks for listening. You can follow me on LinkedIn and the platform formerly known as Twitter. If you’re coming back, thanks so much for your support. And if you’re new to the show, make sure to give us a follow on your podcast player of choice and leave us a review. It really helps me promote great founders and CEOs like Patrick and great Aussie businesses like CreditorWatch. Until the next episode, keep well.

Fintech Chatter is produced by Tier One People, leaders in fintech executive search. We’ll find world-class leadership talent to build world-class fintech ventures, and you can find us at Tier One People.

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