How to Swim not Sink in Hard Times: A Story of Business & Philosophy

How to Swim not Sink in Hard Times:

A Story of Business & Philosophy

Written by Lisa Allan for PeopleNZ

These are difficult times. It’s times like these when we can use all the help we can get. Uprise Digital was one of the first companies to go through the Elevater programme with PeopleNZ. A dynamic Kiwi enterprise, Uprise is transforming online marketing through their customer-centric practices. And people from around the globe are taking notice. Accolades have been strewn generously in their direction by the Deloitte Fast 50, the Asia Pacific Fast 500 and the Forbes 30 under 30. It is a company sailing on a virtual ocean of growth and prosperity. But in 2018, that ocean got mighty choppy and the company came close to sinking. It was a perfect storm that hit unexpectedly. It showed up cracks that had been covered by giddy growth. It called for immediate action.

Tim Pointer (CEO) shares his story, in the hopes that it might offer insight, tools and inspiration to any businesses out there that are currently struggling. Not to spoil the ending but Uprise certainly found a way to swim, when it seemed impossible... and you can too.

But we must start at the start.

 

The origins of a CEO

Tim is a New Zealander who comes from a very large, Italian family. His Mum is one of seven children and his childhood was coloured with big family events and lots and lots of cousins. When he was 11 he had the chance to live in Kuwait for a year. His Dad did a lot of overseas work and the family shifted over there, experiencing a totally different culture. As an innovator in the online advertising industry, Tim wears his ‘geek’ title proudly. He laid the foundations for a lifetime of geekiness by spending hours and hours during his younger years tinkering on computers with his brother. The two of them took computers apart, built them and made websites. The crowning glory of computer creation was a big PC with glass windows and blue neon lights. It still has a place in the family home today.

Tim wears his ‘geek’ title proudly

A few years after arriving back in NZ, Tim was on the school bus heading to College. Everyone was in their own bubble, staking their claim to bench space and adhering to a strict secondary school pecking order. A new kid got on the bus. The boy walked past seat by seat, his eyes hopeful then diverted quickly, looking to the next possible spot. No one budged. ‘Over here mate,’ it was Tim to the rescue. He moved his bag from the seat and the new boy sat down, smiled, became his best friend and, in just a few short years, his business partner. It was Matt Rowe.

 

The origins of Uprise Digital

So, how did Matt and Tim come up with the idea for Uprise? They were at University together, studying Marketing and International Business. Tim was continuing his love of all things digital and working for an adventure company, getting more people to their website. Matt was also working in the online realm. The two of them took a trip to Auckland to attend a conference about online marketing. After the conference, they were incredulous. Surely it was a scam. The packages being offered seemed unethical in terms of what people were getting for their money. People were being exploited due to their limited knowledge of how online marketing worked and blinded by the ‘smoke and mirrors’ being waved about by these offshore companies. The friends agreed that they could offer customers a much nicer seat on a much more affordable bus. They henceforth made it their mission to ‘un-fuck’ the digital advertising industry. They wasted no time in setting up camp in the small spare room at Tim’s parents house. And so it was that with their crappy laptops, Tim’s Mum pretending to be a phone receptionist and a view of the family clothesline, the first incarnation of Uprise (first called I-marketing) was born.

They henceforth made it their mission to ‘un-fuck’ the digital advertising industry

After a year of working from the Pointer family home, the duo changed their name to Uprise Digital (to align more with their vision) and moved into a shared office space. It was a mighty 5m x 5m. Big enough to hire their first employee and then their second. It had one window and was 11 stories high (which of course meant that they had ‘made it!’). They had their company name and logo on the door and a motivational poster of Mohammed Ali. What more did they need?

Tim and Matt put in $2500 each to start things off and didn’t pay themselves unless the company turned a profit after paying their staff. Needless to say, they became very good at being frugal. The duo would order an ‘Indian Hot’ curry from the restaurant below. They’d then race to the supermarket and get the cheapest, largest punnet of Budget yoghurt they could find and mix the two together. Voila! Acres of curry, to see you through the day and the day would, of course, always start by listening to the All Blacks’ haka. A routine of champions.

This is the time when the company met Bruce.

 

Getting shipshape

Tim can’t remember how he met Bruce Duncan, but he’s mighty glad he did. Bruce was Uprise Digital’s first advisor and the company spent three years going through the Elevater programme. Bruce was welcomed into the 5 x 5 and he set about outlining how he could help the company. He drew 20 boxes on their whiteboard and filled each box with a job title. Tim and Matt shot each other a disbelieving glance. ‘Bruce, we only have four people!’ they exclaimed. ‘Exactly,’ replied Bruce. ‘And you’re doing the jobs of 20 people.’ A few months later, the company stepped inside the Elevater and set a course for business maturity.

Bruce gave Uprise a lot of new structures, processes and an overall rigour that it didn’t have beforehand. He assigned Tim and Matt tasks to complete and provided a very important service for them, regular accountability. Tim looks back and acknowledges how important this was as their business was taking shape. Tim and Matt had been mucking in and doing everything up until now, which is the natural instinct of those starting out in business. But left unchecked, this leads to burn-out. Bruce helped Tim and Matt avoid making the mistakes that so many new business owners make and gave them a way of working that was sustainable. Together, they set goals and created a Business Improvement Framework that set out everything that needed to be done to get the company to where it wanted to be. They gained clarity around shareholders and aligned their leadership team. In every single meeting, there would be at least one (sometimes five!) Golden Nugget to take away. In fact, it was Tim and Matt that coined the term ‘Golden Nugget’ for Bruce’s pearls of wisdom.

After three years of working together, Uprise completed the Elevater programme and began charting their own course for success.

And the business just kept growing. More clients. More staff. More incomings. More outgoings. It was like the company had really let their sails out and caught a sweet wind of prosperity. The team were enjoying the sun on their faces and the wind in their hair, blissfully unaware that just beyond their line-of-sight a storm was brewing. And when it hit... it hit hard.

 

The storm

It was 2018. The year that gave us #metoo, the royal wedding of Meghan and Harry and in which NZ’s new Prime Minister, Jacinda Ardern had a baby. Uprise will remember it for another reason however... it was the year their company turned nine and almost sank to the bottom of the ocean. So, what happened?

Five things. All at once.

Let’s just put this in perspective. One thing, might rock the boat a little. Two, might get the crew out on deck to keep things steady. Three, we might be reaching for our lifejackets (or a brandy!) and struggling to keep our dinner down. Four, time to write letters home to loved ones. But five? Five things?! This was a pummelling of untamed and hitherto unknown proportions that saw all the company’s cash reserves disappear within eight weeks.

Just so you know, these were the five things.

One

The company had a non-growth quarter, for the first time ever.

Two

Uprise were paying media bills for customers on a weekly basis, but only being paid by their customers monthly and the figures were going up and up and up, becoming quite a burden each week.

Three

A long-time employee resigned and had to be paid out their accrued holiday pay.

Four

A big international client didn’t pay a $90,000 bill.

Five

Uprise moved into a big new office and there were some miscommunications around the obligations of the landlord versus those of Uprise. The fit-out resulted in a $100,000 blow out, which they paid for out of their available cash flow.

To top this all off, they were also trying to open a branch overseas, in San Francisco.

Eek!

On the surface of things, everything was normal. Money was coming in, the same as ever. But with these five things piled on top of the normal business operations, suddenly the ship lurched, sprung a leak and started to go down.

 

In the thick of it

Uprise found themselves staring down the barrel of receivership. Their $100,000 overdraft wasn’t big enough for the size of company they had grown into. They went to the bank and despite years of positive trading, they were turned down in their request for a loan. The bank manager revealed that the bank had more equity in Uprise than Tim and Matt did. At 11.04pm every night Uprise’s General Manager would check the bank account and tell Tim and Matt how close to sinking they were. Once they hit the limit of their overdraft, they knew the bank could call in insolvency.

Tim shared what was going on with the team but he didn’t share everything. They knew they needed to tighten their belts but Tim shielded them from the worst and his clients from all of it. The basic perception was that they were a duck on water. Only Uprise's leadership team knew just how furiously their feet were paddling underneath. No one knew they were in trouble. Tim had just started dating his now fiance, Beth. He didn’t breathe a word of this to her. Matt was asking Tim what support he needed but also had his job as head of Auckland branch to manage so it was difficult to do much more than trust that Tim had a firm grip on the wheel. But things were bad. Very bad.

Tim had a solid meditation practice and was pretty good at taking care of his well-being. He thought that although things were tough, he was coping. It wasn’t until he jumped on a plane to go to a business meeting and the walls started closing in, his heart started pounding and his breathing sped right up that he realised his nervous system had a different perspective. It was a panic attack. A very visceral siren from his body, telling him in no uncertain terms that he needed to take action. All the coffees he’d been drinking and the immense pressure from the situation had built up, spurring his sympathetic nervous system to take charge and pump adrenaline through his body. Something needed to change, and fast.

 

Staying afloat

Tim and Matt’s first employee, Seb (also a shareholder), was the one that opened the door to change. He could tell that Tim was not coping and he sent him a video link to a clip all about Stoicism (a philosophy designed for Roman troops) just as Tim took off on another flight, this one to the US. Tim settled back with a red wine, plugged his headphones in and watched the clip. It resonated with him completely. Here was a philosophy that was offering tools that he could start using right now.

When Tim got back to NZ, he started using Stoicism to rewire his brain. He had difficult moments arising daily. He used Stoicism to decouple, take breaths and create new emotional processes, only putting his thoughts and energy into things that could make a difference. He henceforth set about mapping things out. Stoicism invites you to look at the worst case scenario and to make a plan for that eventuality. Tim and Matt made a plan for what would happen if the overdraft ran out. Tim would put in the first $5000 himself. Then Matt. Then Tim. And so on until their reserves would be depleted. Then they mapped in family members they could ask. Finally they mapped in clients they could call on. They had $250,000 worth of $5000 blocks they could call on, if needed.

Having cash available is very important

Once this map was in place, Tim felt much calmer. Even when their overdraft crept all the way up to $98,000, just $2000 from maxing out. Seeing it all written down as a worst case scenario with a solid plan in place made it less scary.

The company switched banks. They had all their clients still paying them and knew they just had to get through this short term period. They called IRD and told them about their tricky situation. They were very understanding. They sat down with Tim and pushed their upcoming $40,000 GST payment out 6 months. The company was able to shift some other big outgoings to free up cash. They did whatever they could to hustle and get more available cash. They even went to long-standing clients and told them they were in trouble. A lot of them were paying monthly so they paid for 6 months up front instead.

And do you know what? It worked. Uprise didn’t need to call in a single one of those $5000 allotments. They clawed their way out of the hole, with their mental health intact and a Golden Nugget of their own - having cash available is very important.

 

Refurbishing the cabin

Crisis over, Tim knew that things needed to change to respond to the size their company had grown to. The biggest learning was that there was a difference between ‘revenue’ and ‘cash.’ Bruce helped Tim to understand this and the fact that having one, didn’t mean you had the other. Tim and Matt restructured the company processes to ensure that they would always have cash available in the future.

Uprise hired a new finance manager and put in place the level of structural rigour that a business their size needed to have in relation to their financial processes, including not letting debtors slip up on payments. All things that they hadn’t thought they’d needed until now, because their honeymoon period of smooth sailing had lasted for so long.

They identified the importance of opening up to others, warts and all. Now, Uprise makes sure that staff and, when appropriate, clients are kept in the loop with the status of the company and, importantly, the plans that have been put in place to weather hardship and ensure job security.

Tim and Matt set new rhythms for their business relationship. Now they connect every day to check in. Because they are best friends as well as business partners the lines between these roles can blur. They now have a system of ‘hats’ they metaphorically put on to make it clear to each other which role they should play at any given time - CEO/Head of Auckland, Shareholder or Best Friend.

Uprise now checks in regularly with Bruce Duncan and use him in an informal advisory capacity. They also utilise his Business Health Check programme to ensure their leadership team are on the same page and that they have a resilient company.

Today Uprise Digital has a team of 30, two offices (Wellington and Auckland) and they are one of New Zealand’s largest independent digital advertising agencies. They work with some of NZ’s biggest brands- Office Max, Bed, Bath & Beyond, Bendon, KiwiRail, Tourism NZ and Cigna Life Insurance. They are also proud to be working with some of NZ’s coolest startups, Timely for example, a booking management software firm.

 

Covid-19

So, how has all of this translated into being able to respond to Covid-19?

The biggest positive is that due to their new financial processes, when Covid-19 hit Uprise had cash reserves. They learnt from their 2018 near-sinking and made changes accordingly. They saw that Uprise would be okay financially and working from home would be a relatively easy transition. However, they noted that a number of their clients would be affected and that a drop in revenue was likely.

Here is a list of the things that Uprise did to lessen the impact of Covid-19...

  • Mapping – Uprise mapped out the possible case scenarios depending on how many of their clients could be affected (none, a few, a lot). They worked out how many months they could survive in the worst case scenario. They showed this to their team, practising total transparency. They showed how rigorous they had been in the mapping and they showed that they could keep everyone employed despite the potential of huge drops in revenue. This led to staff feeling secure in their jobs and asking how they could be innovative.
             
  • Innovation – Uprise decided to use any downtime that resulted to reroute staff efforts to internal projects. These were projects that had been on the back-burner due to always being so busy. Things like upgrading the website, getting folders sorted out and exploring new innovations.            
              
  • Connection & Over-communication – Tim has made a point of over-communicating everything that is unfolding. This helps with a feeling of safety and galvanisation within the team, nothing is being hidden from them. He also created two clear company goals that everyone is working towards together. These goals are a clear connecting force while everyone is working in isolation. He also created a dashboard that appears on everyone’s devices, displays the two goals and keeps everyone up-to-date with how the company is tracking.
             
  • Motivation – The two current company goals are to complete 20 internal projects and to keep revenue coming in. Every time a project gets ticked off or Uprise wins a new piece of work, the dashboard is updated and a silly song plays. This is uplifting and a shared experience that motivates everyone to keep working as a team to achieve their shared goals.
                      
  • Reframing - By diverting staff efforts to the back-burner projects, the company will also be in a better position once the crisis ends than it was beforehand. Tim sees the money he is spending on wages at this time as an important investment in the company for this reason.        

Unlike their personal business crisis, during the time of Covid-19 help is available to everyone who needs it. Banks are being flexible and understanding and the government is being responsive with wage subsidies and interest-free loans. Because we are all in this crisis together it is easier than ever to ask for help and stay afloat.

 

Rising to the surface & On the horizon

Recognising the importance of banding together, Uprise is giving back to their community however they can. They are supporting new companies as part of their business model, pricing their services on how well they perform. Uprise only gets paid when the campaign works.

Uprise is charitably involved with SOS Business - an initiative that has sprung up to sell vouchers for businesses to keep revenue coming in. Uprise is supporting SOS Business with digital marketing, including free media exposure and campaigns.

Importantly, Tim has been sharing his story with business owners to help them find their way through tough times like Covid-19. Hopefully something that he has shared in this article finds its way into your toolkit and you find yourself a little more buoyant in this time of uncertainty. PeopleNZ is proud to bring you this story and to have played a small part in it.

Uprise is sticking to their three year plan, despite Covid-19. They are holding fast to their vision of changing the industry, there is still a lot of improvement to be made. They want to keep growing and still have their sights on opening a branch in an international location. PeopleNZ looks forward to seeing where this innovative, socially conscious company sails to next!

 

 

A huge thanks to Tim and Lisa!

Bruce