Paul Spain:
Hey, folks. Greetings, and welcome along to the New Zealand Tech Podcast. I'm your host, Paul Spain. And today, we have 2 great guests with us, AJ Smith and Mitchell Pham. So great great to have you both here. AJ, maybe we can start with you a little intro of where you fit into this big wide world of tech in New Zealand.

AJ Smith:
Yeah. Thank you. Thank you much for hosting us today. Yeah. I'm in in New Zealand now for about 8 years. Originally from South Africa. Came over to New Zealand. Entirely sure what I'll be doing here, but loved the country and loved the people and loved the environment, and came for a much more relaxed life.

AJ Smith:
Well, that didn't turn out well. But, I'm enjoying every day doing tech. And, yeah. Great.

Paul Spain:
Well, we're look really looking forward to sort of, you know, delving in and and learning, you know, about your company TradeWindow. Mitchell, you've you've been, you know, very deeply involved in the tech sector in New Zealand for for a long time. What are sort of the highlights of the things that you're focused on, at the moment? Obviously, TradeWindow is, you know, one of the you're involved with.

Mitchell Pham:
Absolutely. Hi, Paul. Good afternoon. Hi, everyone. Yes. So look. Maybe about about 3 years ago, I, stepped back From, the daily running of the CodeHQ group. Very, very fortunate to have a really strong leadership team, that continues to kinda lead the business so that I can actually step back, still stay involved, but step back and start to what what I wanted to do was take my and maybe share that and apply that in different context, helping different businesses to unlock their potential for growth.

Mitchell Pham:
Yep. And and and each Organization is kind of different. Yeah. Yeah. Particularly, a TradeWindow for the last maybe just over a year or so. I've been mainly helped with, finding ways to kind of unlock some things and maybe some make some adaptations In the business to ensure that it remains agile. It it started out as a as a startup, so it was very agile. Yeah.

Mitchell Pham:
Yeah. But then once you've listed, there's a whole lot of things there That over time kind of can come in and kind of, you know, make you less agile than than otherwise. And and and so so, Really, my main focus has been looking at different parts of business. Say, well, how can we, you know, how can we retain that agile culture? And how can the business, You know, when the time comes, when it seizes, opportunities, that it can scale up really rapidly Yeah. You know, in New Zealand and offshore. So that's kinda what I really enjoy doing at TradeWindow.

Paul Spain:
Yeah. Great. Great. Well, also a big thank you to our, our show partners, to 1NZ, 2 Degrees Spark HP and Gorilla Technology. So TradeWindow, very very keen to, to hear the story, AJ, around, you know, TradeWindow. You came from South Africa to to New Zealand. And, next thing, you know, you've got a, a tech startup that's listed on the the New Zealand Stock Exchange. You know, tell us how how that came about and what, you know, what was your past experience that set you up to, to jump into launching TradeWindow.

AJ Smith:
Yeah. Like I mentioned, I've always been in Fintech, and I've always had a a keen following on technology and innovation. With my Fintech businesses, the one thing that really struck me, my early stage had a great technical solution for Personal loans and, you know, other parts of the financial and lending industry. But there was one Shortcoming to that, and that was in the early days, digital identity. We could potentially manage everything and derisk ourselves, but Fraud through digital identities, identity theft was always the shortcoming. Mhmm. And it's one thing is you think a deal with somebody, but it's actually somebody else. And if you do not have the means or the the tools to establish that, then there's a shortcoming in your, you know, doesn't matter, the best solution Because you're not dealing with the right person.

AJ Smith:
Yeah.

Paul Spain:
If you've been tricked into the

AJ Smith:
You've been tricked. Dealing with. That's Yeah. You know? Yeah. That can basically still then penetrate your system. So when I came to to New Zealand, I, had this in mind. I just completed the exit for my last Fintech business and personal loans, niche market lending. And that product was then used to scale into Africa.

AJ Smith:
Pretty much used in its, final version and and rolled out to different countries. But, it obviously, I had this idea in mind That digital identities is the next thing that needs to be solved. Yep. It's a bigger problem than one can imagine because it goes across, You know, different countries and, you know, a lot of privacy concerns. And it's a simple problem, but but a difficult one with with privacy. And, and, also, there's a lot of engagement and sharing of data that doesn't make it really easy. So we started off with that, engaged one of the corporates in New Zealand, started off with a pilot, successfully ventured into the next phase of the pilot, and then Someway, we got talking about trade. And there was a day that, you know, it was just pitching all of the The problems is, you know, it's a specific bank in New Zealand.

AJ Smith:
All the different trade problems, came to light. And, They asked us, you know, would we like to be getting involved in this project? And we started getting involved in the project, and I just saw the massive Inefficiencies in trade, really, what we found there was a total paper based driven Economy System.

Paul Spain:
So when you talk about trade, what what are you covering here?

AJ Smith:
So what we do is we digitize trade. So we're removing paper from from trade, And that's in its simplest form. And this is sort of import, export That's for the importers and export in third parties like the freight forwarders, custom brokers, the agents, shipping company. So everybody in the ecosystem really from moving a container from 1 country to another one to another country and then dealing with all the compliance, related to every trade. Mhmm. So, you know, a container can be a simple box or it can be a con container full of goods, or it can be a ship. And each of those is a transaction linked to certain compliance and requirements. And one side customs clearance and the other side, customs declaration for import entry.

Mitchell Pham:
Mhmm.

AJ Smith:
So there's a lot of compliance, and each country has got different requirements.

Mitchell Pham:
Mhmm.

AJ Smith:
So What is happening is there's a lot of paper involved. So what we do is we try to digitize that entire process, deal with all the related parties that's involved and trying to bring them into ecosystem. Because what what is happening today is you've got all these different solutions and intermediaries, But none of them are connected. None of them share data. It's basically moving paper with Couriers and airplanes as we just spoke of it, moving them around the world. As one of the clients in the early pilot, when we really wanted to understand what is the the level of Digitization. We found that there there is not really. It's just been a industry that's been forever being paper driven.

AJ Smith:
And that specific company was producing enough paper per year to fill a tennis court, knee knee deep. Wow. Just 1 company. 1 of our exporters. Wow. That's the amount of paper that

Paul Spain:
they exporter.

AJ Smith:
One Mid sized New Zealand export company and the amount of paper that they need to produce. So you can imagine that's the paper to the shipping company, paper to the, banking. And and it's all in, duplicate and triplet. So it moves it out to

Paul Spain:
the efficiency that goes goes along with that.

AJ Smith:
And each participant add to that, and then it becomes a bigger pack. And it's all different requirements. Each different country has got different requirements as well.

Mitchell Pham:
They probably exported more paper than products.

Paul Spain:
Wow. So yeah. Really, really a great, a great opportunity. And so, you know, where were you at at that stage in the business. And, you know, you you'd been focusing on on digital identity. So that was a that was a pivot then to focus on on trade. You know, what was the size and scale of the business at that at that point?

AJ Smith:
Where were

Paul Spain:
where were you at in your in your journey?

AJ Smith:
So, obviously, understanding the importance of digital identity and what importance that will play in the longer term. That was a great basis to start off in terms of digitizing trade. For the moment, we just park that day and said, okay. Well, this still this industry still needs to evolve, but we've got a lot of IP created, and we can, embed that into our future products. A lot of learnings. Yep. Because there's identity in the product And these, as I mentioned just before, identity and people, your users, all different users that interact. And what is missing in trait is trust.

AJ Smith:
So if you can establish trust between the product and the users, then you deliver high level of trust And government and all intermediaries and all different participants will then be more comfortable trading, and there will be more trade. So establishing that is really establishing it through technology. So after, we've done our minimum viable product, pretty much a pilot between New Zealand and Korea with one of our exporters. We, have been very successful in that pilot, and we could show the inefficiencies in the process and how we can potentially solve those inefficiencies by connecting in the entire ecosystem of all different participants and sharing data, and Removing Paper. From that moment on, we, really thought that, this product and industry has got Opportunity to be disrupted Yep. And connecting all of these different silos that is currently in existence and some to some extent still is. And, basically, there's different pathways to establish that, and we found a pathway. And we also soon After our minimum viable product, we saw opportunity in a few businesses that solves different pain points.

AJ Smith:
In that early stages, we then acquired some of Those businesses we've today up to today, we've acquired 6 businesses and solving different problems. Busy amalgamating all of that, information and the flow of data into a system we called CUBE, which brings it all together. Then in 2021, We list the trade we know on the NZX. And the reason for listing the company that early was really because we're a small company at the bottom of the earth, And what we're trying to deal with is big, large enterprise clients and governments. And to establish that trust, You need to really trade at a much higher level and have a much higher level of discipline and governance. And, you know, when you list it, It brings your, your whole level of discipline as a business to a much higher level. Yeah. Because you've,

Paul Spain:
you know, you're forced to Port, and a whole bunch of things. You've got, you know, a whole a whole lot of layers. And I guess there's that confidence of dealing with a tech startup that, you know, a government or an entity might not be sure whether you're gonna be around tomorrow versus a list of companies, which Would would tend to have a longer lifespan. Put it

AJ Smith:
there. Totally a a higher level of corporate governance. Yeah. We're obviously In the early stages, we had attracted a bank investment, and attracting a bank investment meant already that we had to trade at a much higher level. And we had to put in a lot of corporate governance in order to fulfill the requirement. So just right from the beginning, we put in all of those measures. And we also got, you know, ISO certification and ISO, 27,000 and 9,001. All the different things that would mean that Companies and enterprises and governments would would trust us more.

AJ Smith:
Yep. And then after the listing, I would say, found it quite interesting that the market then suddenly changed. It, pretty much launched in, listed into a down market. It still is. We then, straight after stepped into COVID, another, Challenging time, but also great for digitization because what COVID did has really exposed all the inefficiencies in trade. So what happened there is, You know, goods were stuck on ports, stuck in countries, couldn't move. And the reason it couldn't move is with the paper. Aircraft stopped flying, and the paper was stuck in 1 country, and the goods was stuck in a different country.

AJ Smith:
And these 2 are needed to move goods, and that really illustrated the inefficiencies in trade. And and I think from there on forward, That realization came that trade cannot happen without digitizing the whole industry. And it's not just about different segments of the industry that can be digitized. The entire industry had to be digitized because you have to exchange data. So the entire ecosystem from a to z needed to be digitized. So that awareness, has been clearly demonstrated through COVID. And post COVID, it's a lot of digitize digitization mapping and adoption to digital trade, which has really been beneficial to TradeWindow, and it's continuously helping us accelerate.

Paul Spain:
And walk us through, listing on the on the NZX. What did that look like in terms of, you know, the the funding that you had received prior to listing and then, you know, that entry into To the into NZX. How did

AJ Smith:
how did

Paul Spain:
that, play out?

AJ Smith:
As I if I go back to the, the early, Stages of TradeWindow. We've always been well funded. Been lucky to have great, long term investors, a sizable professional investors. And I think a lot of our investors come from the industry and understand the pain points that we're trying to deal with. And it and it's there's a lot of pain points and it's expensive to, like, change the industry. And a TradeWindow can't do it on its own, but it's Lucky for us, there's a few other great initiatives and government initiatives across the world that is trying to digitize trade. You know, it's not just about digitizing. It's about, you know, legal harmonization.

AJ Smith:
It's about standardization. It's about, you know, data standards and exchanging that and being All the different silent participants be ready to accept data exchanges and and also, you know, in a secure way to be to be ready to engage. So our investors obviously knew and, we're experiencing all of these inefficiencies. TradeWindow then started building, solutions. Some of the solutions we've, you know, built in house. Others, we acquired. There was a lot of IP and, you know, problems already being Soft and silent way and no need for us to, like, reinvent the wheel. So we just consolidated some of those applications into what we call CUBE.

AJ Smith:
And we'll continuously expand on that in our innovation. Then, soon after we listed, I think the market the capital market started changing, as we all now by now know. It's also, was time, that we soon after COVID came, which I said COVID was great for us because it really exposed the inefficiencies. But, then a down market cycle, you know, high inflations, you know, it was like the Ukraine war and, you know, what we've got now, another war front opening. Yeah. It's been a it's been a interesting time to list. We did a direct listing. So with the direct listing, it's not like a IPO where you basically, sell stock on the day.

AJ Smith:
A direct listing is just a compliance listing. It's getting All of your processes and your fundraising ahead of the listing. We've we just successfully done a listing or a capital raise a week around a week before our listing of compliance listing. And then effectively, just the difference is you comply to all the the regulations and requirements of NZX, and then you stop Start trading. On the listing day, we had a successful couple of months. Like I said, it was really a a great market to listing at the time. Because you ended up

Paul Spain:
with a market cap, what, in the direction of 300,000,000 Yeah.

AJ Smith:
The year for a period. Yeah. I think people saw the The problem we're solving. And it got a lot of attraction, and it got a lot of interest. And obviously, another point is It it's got pros and cons when you've got limited liquidity. And and like I said, none of our long term shareholders are actually selling. They're all mostly, you know, long term investors. So this scarce liquidity Yeah.

AJ Smith:
And, that meant with a few shares. It can quickly increase your market cap

Mitchell Pham:
Yep.

AJ Smith:
Which we've seen. And vice versa, of course. And and vice versa. So on the flip side, when the market change and there's, scarce liquidity and it's a down run, and a changing market and scarce cap scarcity of capital, then it can also, run down. But, yeah, it's been a interesting time. I I really enjoyed the experience. It was great to work through all of the compliance, built a really solid team. And you enjoy doing compliance.

Paul Spain:
That's that must be that must be unusual too. You enjoy compliance stuff. I wouldn't

Mitchell Pham:
say I enjoyed it. To enjoy learning.

AJ Smith:
But I, but I appointed the right people who do enjoy that. And they did a great

Mitchell Pham:
job. Enjoys. AJ enjoys delegating. Yeah.

Paul Spain:
Yeah. Absolutely. No. That's I

AJ Smith:
guess that's

Paul Spain:
the thing, isn't it? It's Finding those right people that can that can take care of all the different, you know

AJ Smith:
Building great teams around you. That's really this, the superpower, of any company is if you've got the right people doing the right things and they and they are aligned to the vision, and they energized, and they, share your work ethic and your, you know, your culture. Finding a group like that, believing in something, and that's what I've got with TradeWindow. I've got a awesome group of people there that is, you know, through all of the ups and downs, been really resilient and believe in the mission. And and and like I said, it makes it so much easier To pitch up for work when you've got and we're surrounded by such a strong group of people. So, yeah, right through the process, we had specialist in everything, helped us, you know, great people in finance, great people in government governance as we say, great advisers. So that early stages of the listing was probably a little bit overvalued to the market and, you know, you know, unrealistic expectation of what the company value is because it does early in commercialization and and, monetization of our products. So I don't think that value is there at that stage that was little you know, there's scarcity and options in New Zealand's capital markets in equity markets.

AJ Smith:
And, so It it got a lot of attention and, you know, it it it had a good run, but it wasn't the real value of the company. There's always a a multiple that the comp you know, that your company based on your revenue. So that was a little bit disconnected.

Paul Spain:
We which isn't unusual in the startup world, is it? Yeah. I mean, it's like, you know, you're trying to you're looking at multiples, but you're also looking at What's the potential? We you know, we're where will this, organization, you know, be? How much can they scale to Yeah. Even for well established firms that have that have been around for a long time, you can look at the multiples and, you know, scratch your head and and and wonder how they come about. But, you know, I guess that that's what investors have to make those calls and and judgments based on what what they see and what the potential is.

AJ Smith:
But I also believe it was a time when most tech companies were maybe a little bit overvalued at the time because you were finding multiples that was just not in line with the revenue. Yeah. And there was a, a flood of capital in the market looking for a home, and and a little bit of FOMO in the market and, you know, It was really easy to raise capital in those markets. And I think that, that that drove up the prices. And Like I said, I think there should still be a connection to the company's underlying performance and its and its, and a multiple link to its revenue and different Mhmm. Different multiples for different reasons. I I totally agree with that. But there must be some sort of connection.

Paul Spain:
And, Mitchell, tell us about your involvement with, with TradeWindow. When did when did you get, first get involved.

Mitchell Pham:
I was, I've I've known AJ for for some time. And we first met when I was, Leading the Digital Council, Fautaro. And we were doing some work, looking at ecommerce. Right.

Paul Spain:
This is for the gover for

Mitchell Pham:
the government. Government Yeah. Advisory, body. Yep. And we we did some research into, you know, ecommerce because, you know, ecommerce was going to be the key thing to unlock New Zealand businesses and economy, especially under COVID. Right? So we we kind of embarked on that. And then we started to realize that actually Underneath ecommerce, it doesn't matter how good your kind of ecommerce online booking platform and all those things are. In order to complete A successful ecommerce transaction, a good has to be delivered to a person at a place.

Mitchell Pham:
Right. So then that whole ecommerce layer relies on a lower layer, which is supply chain logistics. Alright? And for a country like New Zealand, both importing and exporting, that that supply chain has got to be integral to The flow of international trade.

AJ Smith:
Mhmm.

Mitchell Pham:
In and out.

Paul Spain:
Yep. You

Mitchell Pham:
know? And so that was when AJ and I started, like, a working group Yep. Bringing, on one hand, government entities, and on the other hand, private sector companies together to start looking at how New Zealand could Actually, tech called this digitalization of trade Mhmm. Both as a the lack of it is a is is a challenge, but actually, That thing in itself is an opportunity to really unlock the New Zealand economy. You know? And and and AJ demonstrated amazing leadership. You know, we New Zealand didn't have that kind of a group before, and he stepped up and he brought others together. And and so I I was, You know, I was part of leading that conversation from the the from a digital council side of things, and then kind of we learn I learned more about TradeWindow and Realize, wow. This is actually this company is actually pushing the frontier here, at least in New Zealand. You know, this is the the one the one that's at the forefront.

Mitchell Pham:
By the time I'd met AJ, I think I don't know what trade volume you were doing, AJ, but you were only, like, Sixty, 65% of all New Zealand export going out, you know, into the world. I was I was gobsmacked. I'm thinking, Wow. How come I've never heard of this company, Taekwondo? You know? And it's already, you know, handling more than half of New Zealand export. Yeah. And and we're Nexford Nation. Yep. You know? Yep.

Mitchell Pham:
And so that was how I was first aware of TradeWindow. And then over time, part of that working group, but also part of learning more about what are some of the challenges in in trying to digitize the flow of trade. Right? Mhmm. You know? To enable all of the everything else to to actually happen. And then AJ started to share more about the challenges of building a business that does that, You know? And and then listing it, but then, actually, there's more challenges after you've listed.

AJ Smith:
It's like a

Mitchell Pham:
it's like like when you play a game, you go to the next level, you think, yeah, it's great, and then it gets harder Yeah. Yep. Based on your previous success. So so the biggest challenge then was AJ was saying to me, look. You know, we're doing really well. We've listed. We're growing and everything else. But at the same time, all of the things that come with being listed Mhmm.

Mitchell Pham:
To be able to be trusted in all of those really good things

Paul Spain:
Yep.

Mitchell Pham:
Actually also have an impact on how the business Operate. You know? And and AJ felt that, you know, Taekwondo wasn't as agile as it used to be. You know, things were kind of there were just more layers and more tiers and more kind of kind of, I guess, steps and delays and things like that and more reason for why, you know, we're not really rolling out new products and and development and things as as quickly, as as we used to kind of thing.

Paul Spain:
Which guests is pretty common, isn't it? As as an organization scales, you

AJ Smith:
Yes.

Paul Spain:
You kinda you know, you can almost build a a straight jacket, around the business and things that that all seem necessary. So

Mitchell Pham:
Yes. Now, look, all those things were necessary. However, when you looked at TradeWindow, It's not a large corporate. Yeah. They're not they're not a a a start up a small start up anymore. However, they're not a large corporate.

AJ Smith:
Now about 43. Yep. Yep.

Mitchell Pham:
And, and and so for us for a not large corporate, Having to carry all that structure, you know, and having to start to operate like a a large corporate actually actually slows you down, you know.

Paul Spain:
Yeah. Yeah.

Mitchell Pham:
And and so, AJ kind of invited me to come along initially as an adviser to look at, you know, how to where? You know? Can we unlock things? And how can we unlock those things to enable The business to become agile again, both the scaling up and scaling down and adapting, and seizing and and so forth. And I think that was how kind of how we be began the the the working relationship.

AJ Smith:
Mhmm.

Mitchell Pham:
And it's been really interesting to see, You know, it's quite a unique situation, you know, where you're kind of in the middle, you know, in the middle of size. You're not, like, a big conference. You don't have all of that resources. Right. But then you're not a little player, and you can't just shoot from the hip. You know? And Mhmm. So there's there's a bunch of, Disciplines that you have to that you have to have as a business.

AJ Smith:
Finding that balance.

Mitchell Pham:
It's finding that balance. Right? You know?

Paul Spain:
Yeah. And walk us through because, you know, often the, you know, the best learnings are through the the tough Holmes. AJ, there's the the scaling up, but scaling down was mentioned too. And you had a partnership with a a UK based firm, and and that ended up sort of, you know, failing. And it's meant you had to, you know, had to let a bunch of people go. So walk us through a little bit of of that. Because these things can be, you know, incredibly stressful, obviously, you know, on individuals that had to exit the business. But, You know, there's there's probably you know, that sort of thinking can cause a lot of, you know, a lot of damage to a business if it's not, you know, not handled Correctly.

Paul Spain:
Well Correctly. How did you walk through that that time and not, you know, not get disillusioned? Yeah.

AJ Smith:
Look. It's always difficult, but business is not easy. And, as you mentioned, deals fall over. If if you're in business and not gonna expect deals to fall over, then it's the wrong place for you to be. And like I said, we can manage everything from our side as best as we can to the best of our ability. But you're dealing with two sides of a deal. And what happened with the the UK company is We always look looking for better ways and more efficient ways to, add more resources to TradeWindows firepower, to scale up and to do and to build more product and build it in smarter ways. And, you know, What we found through partnerships, that's a really efficient manner to, scale up the business, also to develop it in a way where we can capitalize the cost to our balance sheet, and then also finding a partner who's got all the resources and the know how and the International network, connections, and also IP.

AJ Smith:
So part of the deal was is some IP that We could find unique IP that would give us, you know, unfair advantage. So from Early days, it's a deal that took about 7 months.

Mitchell Pham:
Mhmm.

AJ Smith:
So it was a lot to work through. Quite a bit

Paul Spain:
of headspace for you then.

AJ Smith:
A lot of headspace back and forth. Quite a complex contract. Took us a long time to get to the final version. By that time, we were really sure about the deal. So by that time, there wasn't it's a point of almost no return. We already integrated quite a bit. And then what happened on this side is they, had some internal turmoil. The CEO on the day that to settle us was, fired for internal activity.

AJ Smith:
Like, Anyway, there was some internal turmoil. It was really bad timing for us. So

Paul Spain:
how how did you feel finding Finding this out

Mitchell Pham:
on the

Paul Spain:
day that you're supposed to settle Yeah. That, that things are kinda collapsing in front of you.

AJ Smith:
But I actually only received a text and a email later and saying, hey. We've got a few issues yet to deal with. We've just lost our CEO. Twenty people has exit the business trying to get hold of the company and say, hey. What's going on? I really think this is not a great time to, like, have your turmoil while while you have to settle us.

Paul Spain:
1,000,000 of dollars at stake.

AJ Smith:
Yes. After 7 months of working and going back and forth, and, I'm not entirely sure, but I doesn't think that this is gonna be, You know, a great experience for us on this side of of the deal that need to now go back and explain to the market that, hey. There's a deal that fell over, and this is how it's gonna impact us. And also, you know, the last quarter of the year, it was never a good time to raise capital and reset and find alternatives. We're always working and dealing with other funding opportunities and other development partners, but this one came quite late and it To a big surprise, we never expected that on the day of settlement when they confirm, you know, everything is good. It's all It's all good to go. Mhmm. And then you'll receive a text and say it's not gonna happen anymore.

AJ Smith:
But, you know, getting back into it, we then decided maybe It's a blessing in disguise. There's always alternatives. And there's you know, as a resilient company and as leadership, you should always plan for the inevitable, And you should always expect that a deal is not done until the money is in the bank. Straight after then, we realize that It's a bad time of the year, and we have to reorganize. And what we we we we rather would like to call it rightsizing the business. So rightsizing it for where it is now and what its capital can carry. And TradeWindow was always fortunate to have a big r and d team. We're developing and innovating quite a lot of product.

AJ Smith:
And I was always telling the market and saying to the marketers, 58% at that stage Of all of our cost is invested in r and d. If you look at the business, fundamentally, it's got Profit margins growth profit margin north of 60%, and all of the different products that we acquired and our key products are all and on stand alone basis, they're all profitable. So a great position to be in. Yeah. Exactly. So we we knew I always knew that as our position. So what we needed to do is we had to take the foot off the the pedal on r and d. And we went luckily, it you know, quite mature, as a business to be already be at that point where we could Scale back our r and d, remove 50% of the cost base.

AJ Smith:
And within the next 3 months as we you know, from today, TradeWindow will be a sustainable and a EBITDA breakeven business. Unfortunately, any reorganization and any rightsizing takes time. So we started Straight after that announcement came out, we just completed our reorganization and our rightsizing. And now in the next quarter, TradeWindow will be EBITDA breakeven. It's unfortunate that it, happened. We were looking forward to accelerating the r and d, accelerating our innovation and having all of those extra firepower and resources on the team. But nonetheless, TradeWindow team is a resilient team. Fundamentally, we are strong company.

AJ Smith:
We've got great people. We had to unfortunately greet some of our amazing staff and developers and People who's got a lot of knowledge, but the the core team is a strong team and is a resilient team, and we will rebuild that. It's just We can't do it right now. With the current market, conditions is capital constraint. And it's not just us. All companies are finding it quite difficult to raise capital. Capital is, firstly, it's quite expensive at the moment. You've got very low valuations, multiples that company trade on.

AJ Smith:
And, you know, if you find in investment, and it's quite difficult to find it at the moment, it is a at a very low valuation. But there's alternatives to those. There's finding, new capital or finding debt or, like, just reorganizing yourself and make best of what you've got. And that's Exactly what TradeWindo has done.

Paul Spain:
Yeah. And I think I mean, this impacts everyone, doesn't it? I mean, we'd we'd probably look across listeners and, you know, there would there would be, you know, folks who have been Maybe wondering around, you know, looking for new roles, looking for, you know, salary increases, all these sorts of things wherever they sit, those that are that are leading and running businesses, and and everybody's impacted. There's, you know, people that have been laid off. There's a a lack of new opportunities for for folks. And, Yeah. When there's that sort of capital crunch, yeah, we we all get impact from one way or another, and you kinda have to batten down the hatches and and and do the best that you can. But, you know, when we come out of these things as a as a country, we can often then do a lot better, if we've been smart around, you know, how we've handled things through the, through the tougher times. So, yeah, really encouraging how you've come through.

Paul Spain:
And, look, I I really appreciate you sharing openly about this on, on the New Zealand Tip Podcast, because, you know, often what we what we get is firms that are willing to talk and sort of wave the flag for their company when, You know, when things are all roses and and the economy's doing well and and and they're doing well. But these ups and downs that We need to learn and share the stories of of how we weather them and how we make good decisions going going through these things, so that we have good stable firms, in the in the long term.

AJ Smith:
You you need to grow your resilience. And, you know, you learn from the bad days, And you learn from deals that fall over and and failures. And that's really how you grow resilience and how you grow a team that can take you forward. Because you don't learn when everything is going well and it's all easy. Because you should be really worried when a company has not faced any downturn or turbulent times. And you you also need to then Question, how would the team function under those difficult times? Will they still stay together? Will they still deliver? Or will they fall apart and fall over? And trade winners demonstrated now that, you know, we can be trusted to also deal with the difficult times. We've had the great times. With capital, it's easy, and we built a lot of product, and it's all good.

AJ Smith:
But how we deal with the difficult times really builds character. And and we've survived that. And there will be other ones. There will be different type of challenges ahead. And and that should build Confidence and trust in the team. And that's why I say my team is amazing. Those people there, they are not motivated by anything else other than success. And going through the difficult times as a team brings us together, we would have loved to have all of our team today.

AJ Smith:
But this is what we have to do for the current market. And we will scale up again. It's just a temporary thing to right size. But it's the right discipline, the right thing to do under current market conditions.

Paul Spain:
Now look at looking at that change, because what was your peak in terms of people there prior to, prior to the layoffs?

AJ Smith:
Yeah. When capital was available and we could build, a lot of product. And like I said, we've we've prebuilt product knowing that we will monetize some of them later. We were, I think, at max, a 104 people, between New Zealand, Australia, and then we've also set up, development, resources in, Philippines. That it's been really great for us, finding a lot of great talent there that supports the team. So we've we've grown the team to quite a sizable, group of developers and a and a r and d team. Like I said, that's probably, 2 thirds of the of the staff component. So it was a easy decision for us to take the foot of the pedal on r and d.

AJ Smith:
We've had a lot of products still to monetize and, you know, as the last quarter results just came out. On a, month to month, December to December, we've grown December, we've grown 49%, and our Q product has grown 150% in revenue. And that's from a, you know, year 5 base. So we we achieving really good, metrics at the moment. And I just believe that there's still more, and we could still even go faster. There's a lot of opportunity still for TradeWindow.

Paul Spain:
Yeah. And now with that sort of smaller team, Have you been leaning into the likes of artificial intelligence and so on to because that's that's the thing at the moment. We've got access to to many more tools than then what were available, you know, 2, 3, 4 years ago. How how these sort of technologies have helped you to not completely, You know, let let go even though you've ended up with a smaller team.

Mitchell Pham:
I don't think we have a choice. These emergent technologies are now part of our core road map going forward. Mhmm. Where we're looking to apply, you know, smart technologies like AI, but there are other is when we look at, at not just building great technology products that we offer to customers, But looking at the the business, the TradeWindow business itself, you know? Yep. Yep. I mean, if we succeed and we have more customers, we can't just hire more people. Right. So so we're really now looking at some of the key areas where it really matters for us to both empower Help people more as well as our customers more, but also give us more efficiency and scalability.

Mitchell Pham:
Yeah. And that's where we we've identify That's gonna be in the education area. Mhmm. We can provide, you know, the contents to educate, the market, educate our customers Through our academy business model at the moment, that is a a prime target for AI. And then there's a self onboarding For customers, ongoing self support, and then all of the back end, of our business around Tracking, monitoring, billing, payments, all of those things. Again, automation is ultimately the key. So we've we've done quite a bit over time, but we prioritize a lot on the products we build for customers. Yep.

Mitchell Pham:
I think going forward, We have to bring that balance up to actually 5050 where, you know, it's just as important, you know, for the mechanic to Have a good car

AJ Smith:
Yeah.

Mitchell Pham:
Than to just work on other people's car. Right? Yeah. So so we're now really gonna have to rebalance that and actually, lift the game on applying technologies to our own business. Yeah. Great. A lot more than we we have done.

Paul Spain:
Yep. And and the academy, tell

AJ Smith:
us a little bit about, you

Paul Spain:
know, where does where does that fit in and what does that consist of?

AJ Smith:
About 2 years ago, we ran into a bottleneck with our onboarding. And and we were, you know, fully staffed. And and just just a slow process, and we were looking at ways how can we Speed up the onboarding process. And I spoke to the team and said, it's it's all about where the big bottleneck is is about training. It's about training our people on the system and also on the industry and industry knowledge. So why don't we just go and build the academy and then A lot of the training needs that actually keep our staff busy and actually be commercializing product, they're now busy training people. And we said, let's take that function away. Let's create a a academy.

AJ Smith:
And we created a learning management system, developed All the material on every product and also industry knowledge, and we've built out to to different levels of training. And you can get a certification through our training academy. And that's now really accelerating to a point where our onboarding process is actually now a superpower. And whenever you need more information or ever when you wanna or you wanna enhance your knowledge, then you go back into the academy either on the products or general knowledge, and you can just continue Building your skill set. But it's also a great way to localize our product into other markets because every market is different. And that's a way that we can then really built, collateral of information, and people can come in their own convenience and they can train as much as they want. But we've also found it easy to Onboard staff. So if you just think about the value of academy is it's not just for your clients, but it's for your own internal use.

AJ Smith:
As when we work deal with partners and we wanna train them because trade is, you know, quite complicated. There's a lot of requirements. A lot of There's a lot of detail there. It's a there's a high barrier to entry, high barrier to entry in trade because it's so complex. Mhmm. And like I said, Compliance is the game in trade. And it's not it's not gonna get less. It's gonna get more.

AJ Smith:
So the way to deal with it is Train your ecosystem through academy. We'll be going now with academy as a next phase of evolution is Through AI, you can now train models, and you can then have a chatbot that actually ask interactive questions right out of your academy and your product knowledge base. So without knowing the the topic or the industry, you can then inject certain questions, And AI can actually educate you from informed resource, specifically to your product or specific requirements. And and I think that evolution is gonna continue, which just as needed as you require having that knowledge available. Yep. Yep. Really interactive. That's probably what I wanted to, like, mention is having a training academy that's interactive.

Paul Spain:
That's great. I think we're we're just looking at the time. We're probably Out of time, so I know there's a lot more we could delve into. So we may have to have to look at a a an update or another session on another occasion, but it's been really great. Fascinating to have, have both of you here. So, thank you, AJ. Thank you, Mitchell.

Mitchell Pham:
Thank you.

Paul Spain:
Anything else that we've missed that we should just cover off before we before we finish up?

Mitchell Pham:
Yeah. Let's just offer a last comment. I I I take a step back from the details of these conversations, and I try to kind of bone up bone back up to Kind of what what so what is the what's the big deal here? I I think, you know, going forward, if if we wanted to trust the flow of money, you know, we'll we'll we'll look to banks, you know, for that Mhmm. With the data and the systems and and and all of that sort of thing. But if we look at, you know, how we might trust the flow of goods, Then it is the kind of things that we do today going forward that will actually provide the world with the ability to trust the flow of goods. You know? And and I think that's that's what really excites me and AJ when we look forward in terms of what could be, you know, and the kind of future that we could create, you know, with a vehicle such as TradeWindow.

Paul Spain:
Oh, really excited to, to follow your your progress and, and your journey through the the inevitable, you know, ups ups and downs and downs, that these things haven't, you know, re really appreciate the, the transparency today. And, yeah, Yeah. Just fascinating to delve into into the story. So thank you both. And, thanks everyone for listening in to this episode of the New Zealand Tech podcast. And, of course, thank you to our show partners, to Gorilla Technology, HP Spark 2 Degrees, and One NZ. If you've been, watching the live stream, then, you know, do make sure you you find your your audio app, whether that's, Apple Podcasts, Spotify, etcetera. Followed the NZTech podcast there.

Paul Spain:
And, of course, if you've been listening to, to the audio, then make sure you seek out the, the videos, so you get that chance to capture some of the live streams and and the in the in person, chats there. I can follow myself, Paul Spain on LinkedIn for those. And you can look up NZ Tech Podcast on YouTube, Facebook, and x also for those live streams. So thanks everyone, and we'll catch you again on the next episode. Thanks, guys.

Mitchell Pham:
Thank you.