Building a Robust Business in Australia: Investorist CEO Jon Ellis (Part 3)

Sramana Mitra: What market were you going after? Was Investorist focused on the Australian market to start with?

Jon Ellis: To start with, it was. Initially, Investorist launched as an idea of working just in the Australian market. As soon as I launched, I’ve probably been active for six months and then I realized that to make it successful, it had to go global and it had to go global almost straight away.

Sramana Mitra: What did you accomplish in the first six months? Were there enough transactions happening in your marketplace within Australia?

Jon Ellis: No, there wasn’t. The first six months was nearly the end of the business. Because I had my ad agency and we’d done the branding and promotions on nearly a hundred development projects so I had a really good database of people. I went around to all those people and asked them to support my platform. I did the wrong thing. I said, “I’ll give you my platform for free. Just jump on and start using it.” When you give something for free…

Sramana Mitra: They don’t value it.

Jon Ellis: Yes. I ran around and I got 45 projects on my platform. It was $2.5 billion worth of stock. Then I had 185 different real estate agents who I’ve worked with across my career. I gave them free access to the platform. I expected people to go wow, but I really missed the mark. My user interface at the start was clunky. It was more suited to a consumer than a business. People didn’t use it. It was just the wrong model. Then I pumped over a million dollars of my own money. I had ran out of money. The ad agency couldn’t fund it anymore.

It left us in the position of thinking, “I put everything into this business and it’s now hit a big brick wall.” I started my seed round funding journey because I still thought it was a great idea. I knew I had to change something but I wasn’t sure what. I met two different people who wanted to support the platform. The most notable was a big bank in Australia called Macquarie Bank that had all this financial planners that had been selling investment properties. The platform in the bank seemed to be a good fit.

I was very naive that I actually could get my platform into this bank and have them fund it. I spent about three months and many plane trips to Sydney. Sydney to Melbourne would be like LA to San Francisco. It’s not a long distance flight but it’s still $600 worth of airfare, and a whole day out of your calendar. I traveled to Sydney five times to meet with this bank. I was really close and I thought I had a deal. I remember the last time I flew to meet with them. I was there sitting waiting to meet with their executive committee where they were going to sign off on this deal which would save my business.

I remember sitting there for half an hour. They came out and said, “Sorry to have kept you waiting but there has been a change of plans. We had a strategy review meeting and we decided to put this on hold. We’ll pick it up again in February.” This was in October. I remember going down the escalator and having this feeling of doom coming in on me. I called my wife in the taxi on the way back to the airport and I said, “We’re done.” I thought that was the end of the journey.

This segment is part 3 in the series : Building a Robust Business in Australia: Investorist CEO Jon Ellis
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