Building VXT – Luke Campbell on Pivoting, Growth, and NZ Startup Success

Paul Spain:
Greetings and welcome along to the New Zealand Tech Podcast. I’m your host Paul Spain and today we’re thrilled to have Luke Campbell, the co founder and chief executive of VXT, joining us. Luke at 23Co founded VXT along with Lucy Turner while there were still students at the University of Canterbury. VXT helps lawyers make phone calls, send messages and host meetings, but has also become a beacon of success in the New Zealand tech scene with Luke recently being named the Young Achiever of the year at the NZ Hi-Tech Awards for 2025. In this episode we’re going to delve into the origins of VXT, into Luke’s story. We’ll learn about the technology and a range of aspects of the business. I think we’ve got some pretty interesting things to chat through and before we dive in, a big thank you to our show partners for making this episode possible. Big thanks to One NZ, HP, Spark, 2degrees, Gorilla Technology and Workday.

Paul Spain:
All right, let’s jump in. How are you, Luke?

Luke Campbell:
I’m good, thanks, Paul.

Paul Spain:
Well, thanks for making the effort to come and join us in the podcast New Zealand studio. I know you’re Christchurch based, so hopefully you’re coping with our weather all right. Some days it’s good, some days it’s not at this time of year.

Luke Campbell:
Yeah. Hey, it’s better than Christchurch today. It was pouring down when I left.

Paul Spain:
Okay.

Luke Campbell:
So I’m glad to be here.

Paul Spain:
Well, that’s a win. Look, as you know, I kind of like to start at the beginning with these sort of stories, so it’d be great to hear a little bit about your, your upbringing and what life was like for you as a youngster, where you grew up and so on.

Luke Campbell:
Yeah, I grew up in Canterbury in the South Island. First few years of my life I moved around a lot. Don’t really remember anything as most people, but I went to primary school in Ashburton and then when I was seven moved to Christchurch and probably pretty ordinary upbringing. Maybe one of the things that stood out at the time was when I was, was seven, I started playing World of Warcraft and I had my own PC which was pretty rare for like the, like none of my, the friends that I had at that time like had their own computers or like spend as much time on their computers that I did. So pretty much every, every moment I was outside of school I was like sat on a computer chair like playing computer games, exploring YouTube, broader Internet and stuff like this. But World of Warcraft was a big one for me in the early days.

Paul Spain:
Yeah.

Luke Campbell:
Okay, so I was hanging out with a lot of like adults on. Wow.

Paul Spain:
Yeah.

Luke Campbell:
Raiding dungeons. I was pretty bad at the game though, as you’d imagine.

Paul Spain:
And what do you think sort of came out of that time in terms of sort of shaping your view on, you know, on the world in various ways. You mentioned you interacting with people that were, you know, older than you were. What were the things that you can recall from that?

Luke Campbell:
Probably these days it’s really common to talk about how people are like addicted to their phones and things like this. It was very rare to have those kinds of conversations like 20 years ago. And when anything like that was brought up, it was pretty immediately dismissed by anyone. But I was very addicted to basically spending time on the computer. But certainly like World of Warcraft, the quests were all written in like old English and just like they’ve kind of written for an adult audience. So I got really good. I. My reading age was like well above the other kids, which was.

Luke Campbell:
I don’t know. I don’t know if that’s a good or a bad thing. But yeah, it was a lot of fun and you know, you do a lot of problem solving and maybe a little bit of teamwork in those games. Although most of the time I was just like screwing with people and so you’re causing trouble. Yeah, it was. Yeah, yeah, yeah.

Paul Spain:
That’s interesting though, around, you know, the teamwork and you know, those other elements that can kind of come out of gaming and often, you know, these things that at the time might not seem at all important in some way can end up, you know, playing in and helping us as we get a bit older. Right. And you know, sometimes we kind of look at computer games and we look down on them and you know, the addiction pieces kind of come in, you know, come into that. But you know, I know for myself as a youngster it was probably the, the gaming aspect of technology. Although it was pretty basic gaming, I gotta say, in the 80s, but that sort of caught my attention as a youngster and maybe pay attention to computers and then, you know, things opened up from there. Was that some way the case for you that it kind of opened up a longer term interest?

Luke Campbell:
Oh yeah, definitely. There are a few things that stood out. Like, you know, I tried like hacking my high school like computer network when I was like 14.

Paul Spain:
Which school were you at by the way?

Luke Campbell:
Kashmir High. Okay. And I got banned from the computers for six months because I was like moderately successful and my friend actually installed Minecraft on the, the serv. The school server as well. So which they never removed because they kind of, they viewed it as being educational. Just film here today, which is kind of cool. Nice move. And.

Luke Campbell:
But I think, yeah, you like, obviously different types of computer games will teach you different things. Like, you know, if you’re playing Call of Duty or like Fortnite or something, maybe you’ll learn like your hand, eye coordination generally, you know, that’s like a fast paced game. I played a lot of strategy games when I was growing up, which have been like super important. Taught me a lot of things, I think was at a talk from like Jamie Beaton like five years ago. And one of the big parts of his talk it was, it was to like a young audience. And you know, one of the central pieces of advice that he shared was like, if you’re interested in startups and becoming a founder, I already started VXT this time. But it was just kind of a reinforcing piece of advice. He said you play strategic games and you know, if you look at some of the most successful founders in the world, like Mark Zuckerberg stands out.

Luke Campbell:
Of course, his favorite game to play and the only game that he still plays, as far as I’m aware, is Civilisation, which is like a big strategy game. So yeah, those kinds of things definitely stood out. I think after not too long I had, I got a second screen for my computer and you know, I was very much like, you know, mentioned that perhaps I was like addicted and so I was like very much like an iPad kid. Right. So I’d have my whatever game I was playing on one screen and then often it was like documentaries playing on YouTube on the other screen, like same time. Right. Or maybe movies or something.

Paul Spain:
A bit of multitasking going on there.

Luke Campbell:
Yeah, Perhaps not super useful, but certainly I learned some things, I guess.

Paul Spain:
And was there, was there a time, you know, during your childhood where you did anything entrepreneurial or were there, you know, any, any signs of, of this sort of business and entrepreneurial and startup sort of interests during those years?

Luke Campbell:
Well, no, but I’d say like probably some of the characteristics that are shared by great founders that like, maybe I have were definitely very clear. Like many great founders are highly disagreeable people, so they could be really hard to work with. And they’re the type of people who, you know, say something, maybe it doesn’t, you know, you don’t say it with much intent and then the person says, no, you’re wrong. Here’s what’s right. And that was certainly like the type of like kid I was. So probably, you know, if someone, someone had that view, that that was a characteristic that was common and successful founders, I definitely do today, then like, maybe they would have like saw that and gone, okay. But I mean lots of people are pretty disagreeable, so I don’t know.

Paul Spain:
Yeah, yeah, Interesting. So, you know, tell us about what, what did you, what did you study and why did you pick going to, you went to University of Canterbury?

Luke Campbell:
Yeah, yeah. So like to your last question. Yeah, I wasn’t the, kind of, wasn’t really in an environment where, you know, extracurriculars like are a thing. Certainly not like young entrepreneur scheme, which is a great program, but I wasn’t the type of person to be involved in that. But I got really passionate about space at high school and through space physics and I was a very bad student because I spent all my time playing computer games. So you know, I would go to sleep like 4am most evenings and then like fall asleep in my class at school. So I didn’t actually get university entrance at high school, so I had to do an entrance course at uc. UC has like a really good program for people who don’t have ue.

Luke Campbell:
So I did that and went on to do a Bachelor of science majoring in physics and economics.

Paul Spain:
So along the, along the way you met your, your co founder Lucy. So yeah, how did, how did it all take shape for you to land on your, I guess your, your initial sort of founding ideas? Now it’s quite common for, for there to be pivots and changes. But what, what were, you know, what was that initial, you know, period and what did that look like?

Luke Campbell:
Yeah, well, I mentioned that I was pretty passionate about space and so really pretty early I discovered SpaceX and Tesla and Tesla through SpaceX, I guess, and then Elon Musk and kind of learned about the, I guess the founding story behind those companies, which was super interesting to me. And over time I kind of was like, okay, you know, I have all of these things that I want to do. Probably startups are like a good avenue to accumulate the like power to do those things to kind of like live the life I want, I guess. And so I’d always like I had. It was always in the back of my mind that I wanted to start a company. But of course, like where do you start? So, you know, once I was getting further along in my degree, I became like, okay, well you know, probably if I’m going to do something, like it’s probably need to start working on it. So went to the center for Entrepreneurship at UC and started like I was trying to get support. Like, what is the first step that you take? And, you know, did a course on innovation in business.

Luke Campbell:
And James Carr, who was at the UC at that time, was like, super supportive and, like, pointing me in the right direction. And I also, like, found out about Y Combinator at that time as well. And all of the resources that they have online were incredibly valuable. And, you know, one of the things that you learn pretty early on is instead of going, wow, AI is really interesting. I’m really excited about it. What can I apply AI to? To have a cool business business instead, you know, you should identify a problem to solve. And so obviously, cool, okay, you should identify problems to solve. That’s easier said than done because, like, okay, I’ve heard the word problem, and you know it’s a bad thing, right? Like, okay, I understand that.

Luke Campbell:
But like, what does it mean to find a problem in the context of a business? And so I was kind of just like stumbling around for a while, and then I got a voicemail message from, like, I got two in quick succession and I was like, trying to check my messages. I was on 2 degrees, so I had to pay to check my messages. Had to top up my phone. Took me like half an hour to check these two messages. And like, pretty much they said, call me back.

Paul Spain:
And all that pain for that.

Luke Campbell:
Yeah. And so I was really frustrated. And then, like, then it kind of clicked for me. I was like, I’m pissed off. That seems like a problem, right? And so, yeah, I was like, what is an alternative to what I just did? And there weren’t any good alternatives in New Zealand. And so the initial idea was to build a consumer application that people could that to help people manage their voicemail messages. And the core, I guess, idea was we would transcribe your voicemail messages and display them in an application, kind of like email. And yeah, didn’t exist in New Zealand.

Luke Campbell:
I didn’t have a computer science background. Lucy did. And so I spent arduous conversations, lengthy conversations, convincing her to start the company with me. But at that time, Lucy was like, you know, business is a bad word, but eventually I’m very disagreeable and persistent. So eventually she was convinced and we went on to build that first version of our idea.

Paul Spain:
Fantastic. Fantastic. And how important was it for you to have a co founder? How important in getting started was you and Lucy Turner working together? Would you have done something if she hadn’t have taken that interest or. This was definitely something that needed the both of you from your perspective.

Luke Campbell:
I mean, I would have done something but it would have been utter failure probably. So yeah, I mean Lucy was essential to and is essential to our success today. So you know, it was incredibly important to me to have a co founder, especially one who had like it opposite skill set and characteristics to me. And Lucy was that individual. You know, I’m like highly disagreeable and persistent. Lucy’s highly agreeable and conscientious and so, and also much smarter than I am. And so we, we work together because of those things. Like we made like a really, we make a really good team.

Luke Campbell:
So yeah, super important.

Paul Spain:
And what would your advice be for others? That maybe they get into it, into a situation they feel, you know, that there’s a huge benefit of having, having a co founder but you know, it’s not always an easy thing to find the right person and then, you know, it sounds like you had to be persistent to, to, to really sell the idea to, to Lucy.

Luke Campbell:
I think that once you have an idea and some like confidence around it, you’re like, I really want to go and do this thing. Well, you know, you should go and hang out with the type of people who you think could be your co founder, ideally many of them. You know what’s really difficult if you want to start a software company, you don’t have, you know, great friends who trust you and believe in you. Great software engineers tend to be highly conscientious and risk averse people. So great software engineers almost never want to start companies. So that’s like an interesting, it’s a really challenging dichotomy to get around. But in general, just go and spend the time with the people you think might make good co founders for your company. And those are often depending on the business.

Luke Campbell:
It’ll be different types of people and just tell them your idea, talk to them about things and ideally you’ll find someone who’s willing to give it a try, give them lots of equity. If there’s only two of you split it in the middle and if you are not persistent enough and you cannot find a co founder then maybe that speaks to, this isn’t the right thing for you.

Paul Spain:
Now you mentioned splitting the equity. I’ve come across a lot. I guess you come across different approaches that different founders take and yeah, I’m curious to kind of hear your take on that approach because you know, I’m sure you, you will come across a, you know, a range of approaches and sometimes you’ve got, you know, the person with the original ideas who, who you know wants to, wants to Take most of the equity and leave, you know, little bits for, for others. But I think they could, they can, you know, I guess. Yeah, each situation’s different. So. Yeah. How did, how did you, how did you put that together in your head?

Luke Campbell:
Yeah, well, I think the most important thing that I’d say is probably most often it’s a very common mistake of thought that ideas are valuable at all because they’re not. Ideas are like almost zero value. And so for Lucy and I, neither of us had any experience or money to put forward. And so, you know, regardless of the fact that, you know, I came up with the idea, you know, it seemed like, you know, hey, yeah, just cut it down the middle. And I think, you know, perhaps. Oh, you know, well, perhaps I was more motivated and, you know, perhaps I might have been more willing to, you know, sacrifice more for the company. You know, arguably, let’s say, you know, he doesn’t want to start a company and, and so maybe you could use that. But honestly, those are all bad.

Luke Campbell:
It’s hard to make a really good argument for splitting equity unequally unless you very clearly have much more resources than your co founders. So, yeah, I mean, this is a common question from people who are just starting out and interested in recruiting a team, interested in recruiting co founders. They’re like, how much equity should I give them? And it’s like. And they’re like, yeah, I have the idea and I’ve started working on it already. It’s like, that doesn’t mean anything if you’re here to start a really great high growth startup company. And high growth startup company is very different to 99% of other businesses. And if it goes well, you will work on it for 10 years plus probably much longer. And almost all of the value will be across that length of time.

Luke Campbell:
So if you’ve worked on it for a couple months and you’ve got an idea, so just split your equity pretty evenly. That’s my view.

Paul Spain:
That’s good. And look, some people come to me with ideas and they’re asking for advice. How do I make this thing happen, Paul? And it always seems to be a challenge to suggest that they shouldn’t maybe get so excited about their, their idea and how valuable the idea is because as you say, ultimately you’ve got to be able to execute on it and so on. How do you talk to that when people ask you these sorts of questions?

Luke Campbell:
Yeah, I mean, you make a great point. People are often really excited about the solution. And I think that as we touched on a little Bit earlier. That’s kind of backwards. Ideally, you should be excited and focused on the problem you’re solving and maybe the customers you’re solving it for. And so how do you get to a point where you have a really good understanding of the customers and the problem? We went through that process after we realized that our first idea, that Voicemail app, was a really bad business from a financial perspective. We had to pivot the company. And so went through this process of looking for other problems to solve.

Luke Campbell:
And when we had an inkling of what one might be, we spent a lot of time interviewing the customers who we thought face that problem. And it gave us a much deeper level of knowledge on those problems themselves, but also the customers. And so, yeah, I mean, a lot of founders, a common, like, failure mode is I have a solution. I’ve tried to sell it to some customers. I’m not getting traction, so they must be the wrong customers. But probably the right reaction to that is your solution sucks. Hopefully you know enough about the customers and the problem to have confidence about that. And if you do, then try some other solution.

Paul Spain:
Great. Well, maybe we can delve into exactly what it is that the VXT does today. What’s the problem that you solve? It’s lawyers that you’re solving problems for. Right. So, yeah, tell us what that looks like.

Luke Campbell:
Yeah, absolutely. So today, lawyers spend half of their time at work on paperwork that comes from phone calls, messages, and meetings. Basically, the paperwork the lawyers spend their time on comes from communicating with clients. And so law firms use VXT to make phone calls, send messages, host meetings, and we automate all of that paperwork using integrations with legal software and AI. So really common use case for VXT today. And what is our core business? What was the first product that we launched with after we pivoted, is a phone system that lawyers use to make calls. So when a law firm comes to VXT, we port all of their phone numbers to our network. We are their phone service provider.

Luke Campbell:
And then when their clients call them or they call their clients, those phone calls go through our application. Users might choose to record their calls if they want, but only about half of the calls that go through our network are recorded. If it’s recorded, we’ll transcribe and summarize that call, and we can save a lot of time with that functionality. But perhaps more importantly for our customers, there is a lot of really simple paperwork that comes off of the back of every time a lawyer communicates with a customer. So every time a lawyer makes a phone call in VXT, we save them about five minutes per call. We might just record the fact that a phone call took place at all without any additional information. We might record the billable time from the call if they charge by the hour. And notably the average lawyer who uses VXT makes about 22 phone calls per day.

Luke Campbell:
So those five minutes add up really quickly. And they spend around 90 minutes per day using VXT. So it’s a really important part of the software they use every day.

Paul Spain:
Yeah, well, that’s good. And how did you walk us through how you got through that pivot and you know, the chats that you had with customers and with organisations to, you know, get to that place where you, where you understood the challenges and the problems that they were having?

Luke Campbell:
Yeah, so rewind to 2020. We had the voicemail app. We had 10,000 users of the product, 1,000 paying customers. These are individual people who are paying for our app. A lot of them were paying for it, to use it professionally. So there were lots of individual lawyers, real estate agents, recruiters, electricians and so on. And so, you know, we, we quickly started to struggle to grow revenue. And one of the things we tried to solve that problem was to go to those businesses where we had at least one paying individual user, go to the people who ran the business and say, hey, John from accounts uses VXT to help manage their voicemail.

Luke Campbell:
How about you buy it for everyone else? And this is coming from, you know, I’m spending a lot of time online, you know, learning about great startup companies and you know, at this time, Slack was the fastest growing company in history. And you know, you learn quickly when you hear about that story. Land and expand. Right. So you get one user and you get everyone else. So we went to these companies and failed dramatically every single time. So we’d go in and pitch and then they’ll go like, no way, basically. And so we tried that over and over again, spoke to customers in all of the different industries where we had paying users.

Luke Campbell:
One of those conversations was with the law firm in Christchurch and they said, no, we’re definitely not going to buy your thing. But at this point they sensed my desperation and, and started talking about kind of other related problems that maybe we could help them with. And at that time they were focused on all of these problems with their phone system. And so I was really interested in that. And he said, oh, if you solve all of these problems for me, I’ll pay you anything you want. And absolute desperation at that time I was like, that sounds great and was very Optimistic. So I thought maybe solving those problems would be pretty easy. But I knew that we were in this situation in the first place because we hadn’t spent enough time talking to customers in the early days.

Luke Campbell:
Otherwise we would have identified that helping people manage their voicemail was not a problem worth solving. And so instead of just diving in head first, we set out to interview lots of different people. And so we focus mainly on interviewing lawyers, but we had a bunch of other industries in the mix there early on. And over time we just focused and focused those interviews on a smaller, smaller set of people and we asked them all about their lives, focusing on their work. What do you do every day? How do you spend your time? What proportion of your time is in these different buckets? What’s something you do regularly that really frustrates you? And what was really interesting and kind of special was that every lawyer we asked that last question to said recording time, and every lawyer that made more than five calls per day said recording time from phone calls. And I mean, like every single one without fail answered that question in that way, which was remarkable.

Paul Spain:
So they’re really struggling to get the details or whatever they needed onto timesheets off those calls. Is that effectively it?

Luke Campbell:
Yeah, absolutely. 20% of billable time goes unrecorded in the legal sector because lawyers record their time in six minute increments. And so of course you’re not going to be able to do that reliably every day. And so we figured that for those types of lawyers who made a lot of calls, we could build a phone system that would automatically record their time. And that was the problem that we started with. Of course, today VXT solves many more problems and is like much more generalizable, like it’s more broadly useful to our customers. But that was the problem that we started for. And that’s what we focused on when we were building our MVP as a part of this pivot of the company.

Paul Spain:
And so at that time, how are you getting on in terms of funds and funding and so on? Right. That’s always an important part of the startup journey, is being able to survive and, you know, pay your way when you, you’ve, you know, you’ve got to eat yourself, you know, and, you know, across your team. So what sort of size were you at that stage?

Luke Campbell:
So I was one of a small number of full time employees at VXT at that time. So I had owned when we launched that product. So this is like, you know, the pivot is kind of underway when we launched that product I’d only been working full time for, gosh, like 16 months, so I was very green. I had already gone through like our first, like serious fundraising experience, which was a very bad experience. I mentioned this recently. I was phenomenal at networking. In a first year of VXT while I was still a full time student, I met three people every day on average. So I connected with the thousand people.

Paul Spain:
That’s pretty impressive, Luke.

Luke Campbell:
I think so too. But problematically, I was so great at networking, but I was horrible at fundraising. So that meant I met every startup investor in the country, more or less. Or if I hadn’t met them, I had knocked on their door and they turned me away. But I was really bad at fundraising, so none of those conversations went very well.

Paul Spain:
So what do you think was the problem at that point?

Luke Campbell:
Well, fundraising is really hard. Most startup companies never raise venture capital because they just aren’t able to do so. So there are a lot of really hard lessons to learn and there’s not like a general rule book that’s out there. And unfortunately there is lots of really good advice, but it is in a sea of like, mostly bad advice. And so. And if you’re a first time founder and have never raised before, you don’t have many friends who have successfully raised, then how do you differentiate great advice from bad advice? And even worse, asking founders who have successfully raised once for advice on fundraising is like asking a lotto winner for advice on winning the lotto because maybe they’re actually really good at fundraising. Probably stars aligned a little bit. And so, you know.

Luke Campbell:
Yeah, so, you know, for most people when you do something for the first time, you’re rubbish. And that was very true for me. But we managed to scrape together enough money to like, stay alive. And thankfully, you know, from that perspective, thankfully, none of our team had any experience. And so. And we were all either straight out of uni or really early on in our lives broadly. So we’re pretty cheap. So VXT was able to like survive on the smell of an oily rag for like quite a few years.

Paul Spain:
Okay, okay. So looking back at the good advice, amongst the madness, any that sort of sticks out to you that you think others might actually benefit from?

Luke Campbell:
Yeah, well, there’s like the practical, like the logistical advice around. So if we park, I guess if we park like the two parts of fundraising, if I, if I were to categorize and like split it up, you know, there are two parts of fundraising that are important, I guess, or maybe three. So. So, you know, one is storytelling, one is like logistics, and the other is networking. So if we focus on logistics, like how do you organize a fundraising round for it to be as successful as you can? This is like the easiest advice to give. Well, you want to network with enough actual startup investors and it is hard to differentiate ones who actually make investments and ones who like talking to startup founders. You know, there are lots of them. Connect with enough of them, meet them regularly enough, be aligned, not a dot is a common saying.

Luke Campbell:
So you want to be building familiarity with investors before you raise money from them. If you can, keep them updated on the progress of your company and just persistently get to know them when you are ready to fundraise. When you need to fundraise, you should collect all of those connections and book, say 20 to 40 meetings and ideally like two weeks or less, very tight period. And try to. Why you’re doing that is you’re trying to create kind of an auction dynamic where you’re putting a lot of pressure on the investors in the process and you’re giving a sense that you are a really great founder, you know how to fundraise, you will be successful. And these investors should vie for the right to invest in your company as opposed to your vying for the right to raise money from them. So collect all your meetings, put them together and just time box your fundraise. Hey, we’re meeting with investors right now.

Luke Campbell:
We’re going to raise this much money. We’re going to close the round in three weeks and go from there. So that’s a logistical piece. There’s other details we could go into, but I’ll leave that there. Obviously, networking is super important and just.

Paul Spain:
On that time boxing, because I speak to a lot of founders and one of the common pain points is that area of raising capital. How long it takes, how long it takes them out of the focus on their business.

Luke Campbell:
Yes.

Paul Spain:
And that can stretch out, you know, a long way. Is that a key reason that you. That you. I mean, there’s probably a few aspects to why you can. The benefits of that time boxing, right?

Luke Campbell:
Oh, absolutely, yeah. There’s many benefits. So, you know, we kind of talked about, I guess, the benefits to the fundraising process itself, like, you know, it having an impact on, like, I guess, how fast investors will move, you know, how they’ll think about your capabilities. Of course, it means you don’t have to spend a whole lot of time on fundraising. You know, you’re building urgency, importantly. And yeah, I mean, in the early days, I was always fundraising because we were rarely successful. And it was a huge distraction. But importantly, I could never take my eyes off of the company because there were many, many things that I was solely responsible for where if I didn’t do those things, bad things sort of happened at VXT.

Luke Campbell:
And so I could never focus exclusively on fundraising. And that probably contributed to some of those early failures as well. That’s not true today, which is very nice. But yeah, yeah. The other part, storytelling. Storytelling is, like, really, really hard to give good advice on because it really depends on your company. It takes a lot of practice to describe your business in a way that gives people a good idea of what you do, but also gets them excited because you can make someone really understand what you do, but they might think it’s really boring and is not capable of creating an incredible company. And so figuring that out is really important not only for fundraising, but also for convincing great people to join you in all other areas of the business.

Luke Campbell:
Yeah, and networking is kind of more obvious. You just go meet people, especially founders, who have raised capital and prove to them that you are also a great founder, and they’ll be more than happy to introduce you to investors because, yeah, getting introductions is, like, a really important part of being able to meet great investors.

Paul Spain:
Great. And, yeah, can you walk us through the funding that you have raised and where you’re at in that journey and, know, valuations and so on?

Luke Campbell:
Yeah. So we’ve raised $6 million since we started the company. Most of that has been in the last, like, 12, 18 months. Fantastic. And yeah, we’ve raised money many times. Like, you know, it’s not. It was not a pre. Seed.

Luke Campbell:
Seed series A. It’s more like, you know, you know, sometimes we raised, you know, as little as, like, $10,000. Sometimes we raised, you know, $200,000 more recently. Way of race, like, you know, and that was, you know, needed the money, you know, for, you know, maybe put that into a picture for the first, like, four, three and a half, maybe four years of the company. We never had more than a few months of Runway in the bank at any given time. And it was really common for us to have weeks worth of Runway. Yeah. More recently, we’ve raised, like, more traditional, you know, venture capital and more like traditional fundraising rounds for startup companies on the order of, like, a few million dollars here and so on.

Luke Campbell:
And we’ve raised money from primarily from GD1 and Alpine Ventures, they’re our two largest investors, by cash.

Paul Spain:
Yeah, yeah, yeah, that’s good. And maybe we can talk a little bit about growth because, you know, you’ve done really well on the growth front. You know, when you look at that, what do you think are the keys to that growth?

Luke Campbell:
Yeah, so start of last year we had around $800,000 in annual recurring revenue. So start of 2024, today we’re at about 4.8 million. Just like 18, 19 months later, we’ve grown throughout that time, like little more than say like 10% per month on average. So that’s really fast growth. We’ve been super excited about that. Often people are like, what’s the thing that, what’s the thing that you’ve solved to grow fast? Right. And of course there’s like, it’s impossible to answer that question because it’s not one thing, it’s many, many like hundreds of like things together. But I guess to summarize, like, we built the phone system, launched that in March 2021.

Luke Campbell:
Over the following few years we were just like spending time with customers fixing all the issues with it. Because phone systems are like incredibly hard to build, or rather it’s incredibly hard to build a reliable phone system. It’s totally easy and dandy to build a demo and a first version. And so by the end of 2022 it was clear to us that now we had all of this deep intuition for our customers. And there were many things that we got wrong in designing our application in the early days that would preclude fast growth that would hold us back or prevent certain use cases, prevent us from supporting certain use cases in the future. So we set out to rebuild our entire product from the ground up. So we had to change a bunch of things about the architecture of our database at the foundational layer.

Paul Spain:
That’s a pretty hard thing to do while the plane’s flying, as it were, isn’t it? To make these sort of big architectural changes. But at the beginning you don’t necessarily know where you want to be in a few years ahead.

Luke Campbell:
Yeah, absolutely. And that’s like often true. You know, generally you need to have the like humility to understand that you do not have perfect information. And so you should probably take make trade offs that support going fast and getting that information and then accept that you will have to, once you have, once you have much better information, you will have to like fix your mistakes. And it’s really common story behind really great companies that they went through kind of similar rebuilds. Canva famously didn’t release any updates for two years as they migrated their entire code base from something really old and crappy to JavaScript. And that was really Stressful for them because there were copycats were coming out of the walls at that time. So yeah, we basically released very few updates to Vxt through 2023, rebuilt the whole product in about 13, 14 months with three engineers and and then released this entirely new product as an update in January 2024 and migrated all of our existing customers to it over a weekend of downtime.

Luke Campbell:
And the new product was like transformatively better. And you know, when we then, you know, a week later when we were bringing on new customers, it was so viscerally that their reaction to the product was so viscerally different. They would be like, wow, this is the best thing I’ve ever seen in my life kind of thing. And it was really clear that we hadn’t screwed things up. I guess importantly, no one at VXT had any experience, professional experience prior to VXT, more or less. Our head of sales will. I went to high school with him. When I recruited him to join VXT, he was a qualified butcher, selling, to be fair, selling wholesale to restaurants around Christchurch.

Luke Campbell:
He certainly didn’t have any B2B SaaS experience. Why that’s important is because, you know, we were really, really bad at pretty much everything early on, but by early 2024 we had gotten to a point where we were actually really, really good at most of this stuff. We’d gotten really good at marketing, we’d gotten really good at sales and so our product became probably the easiest to use phone system in the entire world. When we released that update, we had gotten really good at sales and marketing and so all of these things kind of came together and then we started growing really, really fast. To put the what is really good as Luke just, of course, he’s the CEO, he would say that, right? So close rate globally from a 30 minute demo where the customer is north of 50% which is, you know, benchmarks differ, but the average close rate in B2B SaaS is around 20%, 25%. So it’s pretty remarkable. You know, if a law firm sees VXT, they’re more likely than not to buy it. And most of the times when we lose a deal, that law firm is staying with what they have right now and they’ll come back a year later and buy VXT.

Paul Spain:
That’s good. And how long do you find that sort of sales cycle takes? Does it happen reasonably quickly? Because it’s a reasonable deal to switch out from one phone system to another. And you can understand why people are cautious to make those sort of changes and why there is that percentage that are gonna stay with what they’ve got.

Luke Campbell:
Yeah. Phone systems are incredibly sticky products similar to CRMs and the other software like that. Our sales cycle is very, very short. It’s less than a month. So much less than a month. And a lot of the customers that come to VXT, assuming they’re like established companies, have been using their prior system for like five, ten years. So. And that translates to some super exciting unit economics for VXT as well, in the sense that we very rarely lose our customers.

Paul Spain:
That’s great. What are some of the things that you would do to help move that along quickly in terms of building confidence with potential customers and making it very easy for for this sale to happen quite quickly?

Luke Campbell:
Well, there are two things obviously. One is just being really performant at B2B sales. It is a very well understood science. You know, B2B sales in new Zealand, generally, sales and marketing incredibly immature when compared to the U.S. you know, a byproduct of that is that, you know, many law firms in the US probably maybe not most, but very many, have dedicated sales and marketing teams. In New Zealand, I don’t know of a single law firm that has a sales and marketing team. And so I mean, of course that also is more broadly true in SaaS and technology. In New Zealand we’re really bad at sales and marketing.

Luke Campbell:
Hopefully no one takes offense to that. So being really great sales, super important. I mean, only other thing is really like obviously social proof is super important. Any sales process. So if you have really happy customers that will contribute to like trust in the market that you’re trying to sell into. And that’s true for us and has only become like more true over time, I guess as we’ve improved that product and improved our customer experience more broadly across the board.

Paul Spain:
Now when I look at successful companies, so often the outward success is a reflection of what goes on internally in terms of culture and so on. So how have you shaped the culture with VXT? Have you made that different to the.

Luke Campbell:
Run of the mill startup For a long time? Most of the people who worked at VXT had been there since the early days. And certainly we built and improved that culture together. Coming back to this point of naivety, none of us had had much professional experience. And so when we were deciding what and how to do things, we would think about it from like, okay, well from first principles it’s a bit overused, but yeah, we think about it like, what do we want to do here and why? Why is it beneficial for us personally in the company more broadly and just like do it like that as opposed to, oh, you know, I did it this way at my old company and it’s good. So we didn’t have that resource to lean on or that experience to lean on. So. Yeah, and I think, well, what would I want a workplace to look like for me personally? Well, you know, sometimes I might stay up late and maybe it’s because I was working a lot like the prior evening or whatever, maybe personal commitments and so, you know, well, I don’t want to just have to wake up at 7am so I can get to work on time arbitrarily because work starts at nine, you know. So, you know, basically we pick our own hours and you know, you can, you can kind of design your, the way you work around your life a little bit more.

Luke Campbell:
Of course there’s like many, lots of different aspects to our culture, but I guess maybe it might give you a sense of the process we went through. But certainly we’ve always been close as a team. I think that was super important. We’re all quite good friends with each other and that’s still true today even as the team has grown and we don’t want to lose that as well. So how do you maintain that culture of closeness? And it’s just like whenever there’s a how do we make this really cool and great place to work, we go through that thought process. And ultimately, of course, there’s also all of the financial and business considerations in there as well. And most of the time the thing that sounds like the coolest is actually also probably the financially, the fiduciary, most responsible decision to make, but it’s not always obvious.

Paul Spain:
Interesting. So what would be an example of, of that?

Luke Campbell:
Well, attrition is incredibly expensive and the worse your documentation is, the worse your systems and processes are in the business, the more expensive that is. So of course VXT has really great documentation and systems and processes in place. Especially today we’re incredibly mature in that area. But even still, attrition would be really expensive, like losing a staff member. You have to spend a significant amount of time to identify new people to join your company. Those things are also only more true, like how you know it’s only more expensive if your team are incredible people, if they’re exceptional people. It’s only more expensive because of course those individuals are perhaps rarer. So you can of course then work to.

Luke Campbell:
Well, it must be harder to find them, harder to convince them to join. That all translates to cost and time and so on and so Attrition is really expensive and most of that cost is indirect. It is hard to measure. And things that are hard to measure people often discount. Like in economics, externalities. Things that are hard to measure often like discounted seen as like being less significant. So, so, you know, like it probably costs if we lost, you know, someone on our team for pretty much everyone on our team. The cost of that to the company is probably an opportunity cost.

Luke Campbell:
All these other things easily six figures, hundreds of thousands of dollars. And so. Okay, well what am I willing to spend to avoid that attrition? Okay, well I’m probably willing to spend a significant amount of money. And so what do people care about? What do they want from work? What can I spend my money on to make sure that they love working at VXT and will not leave? Of course. Are we going to pay them? You know, competitive salaries, Everyone has equity at VXT. That’s super important. That translates to like lots of other benefits kind of separate to this conversation. But you know, we’re thinking about like, you know, benefits to provide to the team.

Luke Campbell:
Okay, well we’re like running away from this massive mountain of costs that in my view most people like look at it and see it as like a little hill on the ground. Yeah.

Paul Spain:
And the way you remunerate your staff. I saw something at one point around, correct me if I’m wrong, but sort of an automated sort of pay rise type scenario.

Luke Campbell:
Yeah. So I might just caveat this really quickly with we’ve only ever lost one full time staff member and I’ve never fired anyone at VXT. So I just want to put that out there because it’s like, it’s cool to hear. Okay, well VXT sounds great. What does that actually mean? Numbers. And we’ve been around for seven years. So one full time staff member, seven years, that’s pretty rare. We’re a team of 25 today.

Luke Campbell:
Yeah. We have automatic pay rises, 5% automatic pay rises on base salary every six months in April and October. That’s massive. And of course that would compounding. Right. So it goes to a really large number over like 10, 20 years. Like why? Well, performance, you know, performance. Assessing one’s performance is really expensive.

Luke Campbell:
And probably, you know, going back to that thing we mentioned earlier, how you probably don’t have perfect information so you’re probably going to make a mistake when you’re assessing people’s like what you should pay them. So if you’re probably going to make a mistake and it’s really expensive to do it. Okay, well let’s just not do that. And of course, inflation is a thing. And then separately, why not do one automatic raise once a year as an alternative or. Interesting. Another caveat here, but interesting study on humans, and particularly how we respond to rewards, found that let’s say I give you a gift, Paul. Say I give you a gift for Christmas and it’s like this hundred dollar item and you really want it.

Luke Campbell:
You’re stoked with that $100 gift, right? Well, what if I gave you that same gift but in two parts, you know, middle of the year and the end of the year? Well, the study found that people were getting a much greater sense of reward when it is regular. And in that specific situation that we just example I gave, the more frequent reward of the same size was actually much more rewarding than less frequent reward of the same size. So, yeah, that’s kind of the rationale behind it all together.

Paul Spain:
Yeah, it’s really interesting and we could probably go into this topic in a whole lot of detail for. For a long time, but no, that’s really fascinating. I think we’re probably just about out of time. Anything else that you want to, you know, share about your story and the VXT story and anything that shaped it?

Luke Campbell:
What I’d just say to anyone who’s listening to this podcast is like, VXT is always looking for great people. We’re not necessarily spending a lot of time on recruitment today, but, you know, if you’re really passionate about joining a company like VXT, then you should reach out. And even if we’re not looking for a role that’s suitable for you now, you should be persistent with it and you might end up joining our team in the future.

Paul Spain:
Fantastic. And any closing advice for listeners, Luke?

Luke Campbell:
I get a lot of people who are interested in founding companies come up to me and ask me how do I do this thing? Or I gave a talk at university last week and founders came up to me afterwards and they were like mentioned you should go and talk to customers. And they were like, how do I do that specifically? Like, what steps do I take? And like, ultimately, you know, people are just like, overthink things, like too much and, you know, you should just go and do the thing. Like, just go and do it. It’s like, you know, and if you’re being held back by like, what ifs? And well, what if this bad thing happens when I go and do it? Then ultimately maybe it’s not for you.

Paul Spain:
Yeah, great. Oh, well, thank you so much, Luke Campbell. Really appreciate having you on the New Zealand tech podcast. Some. Some really great insights, some f to hear your story. Thanks for joining us.

Luke Campbell:
Thanks for having me.

Paul Spain:
And of course, a big thank you to our show partners to workday, guerrilla technology, HP, Spark, 2degrees and One NZ for their support of the show and of the broader tech and startup and innovation ecosystems here in New Zealand. All right, thanks, everyone. We’ll catch you on the next episode. See ya.