“Never underestimate who you are closing a deal with. I did, and learned my lesson”
Taking a break from UberPITCHES to go on the SydStart stage, Mark Bouris — founder of Wizard Home Loans, and current chairman of Yellow Brick Road — talked about how it all started. In 1999, after he founded Wizard Home Loans, he sought capital and approached the late media tycoon Kerry Packer. He went to Kerry’s office, presented his startup, and walked away with his much-needed capital, but not before facing Kerry’s difficult and eye-opening three questions.
Question #1: What business are you in? Don’t say home loans.
“I didn’t know the answer,” Mark said. Kerry told him, “You are a disruptor, I like disruptors, and I have a history of helping disruptors. I’m going to help you out here. You are in the business of people’s hopes and dreams. You are not there to sell a home loan; nobody wants to borrow money off you for 30 years and have to pay you back every month. What you are there to do is to help them achieve their dreams.”
Your business purpose is closely related to the audience. Don’t produce something that nobody wants. Instead, find out what people want. “In Wizard Home Loans, people want to achieve their dreams, they want a house, they want shelter, and they want an investment for the future.”
Question #2: Have you ever failed in business?
“My answer to him was, “No I haven’t,” to which Kerry replied, “What use are you to me then?”
Mark said he thought Kerry would want to hear him say that he hadn’t failed. But Kerry’s point was to know if he had the respect for failure and if he could drag himself out of it. Kerry said, “You are showing me profitability at this point in time, the rate of your growth, and costs that will stay at a certain level, but things change.” Kerry wanted to know that if those things change, Mark would have the ability to fight his way back.
“He was going to put 25 million dollars in my business and he wanted to make sure it’s in safe hands. Kerry didn’t mind failure, he actually preferred it to know if you had the intellectual fortitude to push your way through it,” Mark said.
Question #3: Can I hold you accountable?
Accountability is a form of mentorship. In Mark’s view, mentorship is not seeking someone to come in as a strategic advisor who you can call on if you have questions. To him, it’s the other way around. It’s where the mentors ask you questions such as ‘Why did you do it? What’s going on in your market? Why haven’t you done this?’ It forces you to articulate in your mind the answer.
“Kerry asked the best questions, he asked the only ones that mattered. He would get to the essence of something within two minutes, and he would ask me the questions I didn’t want to talk about,” Mark said.
“I think Accountability is the most important thing today to make a business successful,” he added.
After getting Kerry in, Wizard Home Loans also brought in Deutsche Bank in 2000, and ABN Amro Bank in 2001. Three years later, they sold the company to GE Money for $500 million. “We went from a business of zero to nearly 300 branches in Australia and New Zealand, and 55 branches in India, a turnover of $100 million per annum in wages, $20 million profit in 2003, and $80 million profit in 2004 when we sold it. We had zero assets to $19 billion worth of assets in just over five years.”
Mark said it had nothing to do with him. It so happened they ventured into a market where he had expertise in, there was a great opportunity to work with people who could solve a problem, and he met a great person who told him what his business’ purpose was, gave him capital, made him accountable, and told him failure is okay.
“These are the same questions that people ask me today. It’s just the platforms, software, and technology that are different,” Mark said, who added that startups should take advantage of Australia’s new business landscape.
For more insights from Mark, The Mark Bouris Show, highlights innovation in Australia.
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