Speaker 1He right-clicked delete all. I just have to sit there and watch the bar progress as they deleted many copies of the game I'd made. If you want to be a side hustle, the first thing you do is open a Shopify account and snap drop shipping. I think the default becomes, no, I want to open a rental business. I grabbed a security guard, walked over to him, and I put my hand on his shoulder. I said, hey, mate, what are you up to? He's like, I'm watching how people are using my app. We've helped create multiple millionaires out of rentals now. In two months, you've gone from $0 revenue to $10,000. In practice, you hold losers every single time. Then, like, you reliably, at scale, you hold losers. Rentals are the future of e-commerce. The whole world is going to move towards rentals.
Speaker 2Just go and do it and see what happens. Ideas are worth, like, jack shit. Absolutely jack shit. Like, if you can't execute, there's nothing. Just take that initiative to actually take whatever crazy ideas that they might have and just try to see what comes of it. Don't be afraid of ambition. Chase it, love it, wrap your arms around it, and say it out loud. New Zealanders don't know any better. They will just get up and give it a shot. That's why we were first to get to the top of Mount Everest. Go to dream that ultimate dream. Like, what is it that you ultimately want to do? And it's all achievable.
Speaker 3All right. Cool. I want to start somewhere a little bit weird. So, I believe when you were around 40, you built a shooter game that had no title, and you just kind of built it. And then it was banned at the namespace level across every school. I think it was the same computer in Australia, so I understand.
Speaker 1I think it was Victoria, but, yes, maybe it's the same database, but I think it was the Victorian one. Yes, that got me in a lot of trouble. No one from the government came to me, but the school IT level stuff, they were very, very upset when they brought me to the IT office. And I was great mates with them, like, I spent a lot of time in the school office, the IT office, sitting there and chatting with them, for no other reason than I was a nerd and liked chatting with them. But they bought me a Monday. They bought me a Monday and I searched up the name of my game on the school hard drives, and from memory, it was something like two terabytes worth of copies of the game I'd made across all the schools, like, you know, home drives you get when you're in school.
Speaker 3So, it went viral?
Speaker 1Yeah, yeah. Control-A, right-click, delete. And he did it right in front of me, like, it was such a—I remember his name, David, David. He would right-click, delete all, and I'd just have to sit there and watch the bar progress as they deleted many, many copies of the game I'd made. But, yeah, no, I loved it. Loved playing little video games with my friends at school. We were in a group that's affectionately called the Super Nerds by the school teachers. And we would sit there at lunch and recess in the little shaded area just outside of the rooms, and we'd have our laptops, and we'd all sit there and play games for the 20 minutes or so of recess and the 40 minutes of self-lunch, up to where our laptops would run flat, I guess, because we had no power out there. They wouldn't let us play in the library. And we'd sit there and play Halo Custom Edition, which was way before my time. Like, I played it a lot, but it's actually a game way before my time, but it was the only thing that would run on our completely potato laptops that we got given. And I got really, really good at Halo Custom Edition. I just—I put so many hours into it. It had none of the stuff we have these days with, like, recall and stuff where it, you know, takes real skill. It just was like, you know, if you know where to point the gun, you're done.
Speaker 3So when did you learn how to code? When did you learn how to code? Because when you were 14 to build a game like that, that's, yeah, not easy.
Speaker 1Well, yeah, so I decided I was bored with Halo. I was like, all right, I'm going to build my own game. You know? I'd need—because we couldn't run the modern games that were coming out. They were all too, you know, powerful to run on our little computers. So I was like, I'll code my own. Great. I downloaded Unity, and I pulled out all the YouTube tutorials I could possibly find and just started building things. And I built a lot of really bad things. Like, I think I started—my first game I was going to make was, like, a massive MMORPG. Like, you know, the biggest million-dollar budget type thing that you need. And I built—I wonder how many projects ended up on my hard drive. Probably 50 or so little tiny games that never made it past them all. In a week, you're building. But all of them, like, I'd learn a little skill. Like, how does physics work? You know, how to—what is a vector? How do you—how do you apply rotation to items? All these other things that, you know, I just kept learning because you try to do something fun in this new game you're building, and it would go wrong. And I think after, like, maybe six to nine months of, like, hacking together little things, I'd learned enough to put that all together and actually make, you know, one complete game that would work.
Speaker 3Were you a good student, or were you just focusing on— Building things that you liked?
Speaker 1Depends which teacher you ask. But I spent a lot of time—I would sit very strategically at the back of the school—the school rooms with my back up against the wall so they couldn't see my laptop screen. And I'd plug in my laptop to the charger because my laptop wouldn't run for long enough to do anything otherwise. And I'd do all my schoolwork in, like, 10 or 15 minutes at the start of the class. So, you know, if it was maths, you know, they'd give us a section of the workbook, and you just—any questions that were meant to take an hour. And I'd just, yep, okay, done. And then jump back to what I was coding on. Well, whatever I was coding on. Start building stuff, and I just got really good at alt-tabbing whenever the teacher poked their head around. I'm like, oh, just Googling, just cool math games, whatever. I know they all knew, but it was kind of like, look, he's getting his work done. Like, you know, do you want to do the extension tasks, Bodhi? No. No, I'm just going to keep working on my other stuff. I think year 10 and year 11 and year 12, I was no longer a good student. Mostly because I'd never learned the study skills and all the other stuff that, you know, you learn by doing the homework. Because I'd always get all my work done in 10 or 15 minutes at the start of the class. I never had to extend myself by going home and doing homework. And so I hit, yeah, probably the end of year 10. And all this, you know, I was falling behind on a lot of things. Not able to keep up with all the stuff that, you know, other people learn by doing studying. I got by. I passed. I made it through high school.
Speaker 3Well, that's the most important thing.
Speaker 1Exactly. But I'd left with multiple apps built, you know, multiple apps on the App Store. I'd learned how to, you know, code servers and backends and all these other things. And like, even in my last year of school, my teachers were awesome. And they let me kind of bail on a few classes so I could. I think I only had three or four classes for the entire year, which was very out of the norm. But because they knew I was doing stuff and they knew I was working on stuff. You're going to be fine. Yeah. Yeah. They were like, yeah, he'll be fine. You know, we'll just let him get by with the bare minimum possible.
Speaker 3Yeah. And is it true that after the game got banned in your school and in Victoria that a few years later you walked past the lab and you saw some people playing the game?
Speaker 1Yeah. I walked past the school lab. I don't know what I was back there for. I think I was maybe doing a school ICT day or something to come and just speak to the kids. And yeah, I walked past the computer lab to see what was this terrible old game. I could see the bright purple textures from whether the textures had been deleted or files had been deleted from the game. But they were still running around shooting each other. I didn't even know the server still existed. I think I went and found the old server login and logged in to see. I was like, oh yeah, there's a couple of people still playing it every day, every now and then. I think they'd gone and then changed the executable name and a bunch of other things to try and get around the block.
Speaker 3What did that feel like? I mean, it must have been great to build something at 14 that went viral like that. Instead. It exists over the years, even if it got banned.
Speaker 1Yeah, I love, I mean, why do I do? I love when people use what I build. I don't really care much else about it other than, you know, people get used to it and enjoy it. And I remember just looking at them going, walking past them going, that's mine. That's I did that thing. They like it. I couldn't, I couldn't do much else at school. I couldn't play sport, couldn't impress anyone else in any way, but people could play my games and enjoy it. And that was awesome.
Speaker 3Yeah. And that maybe is also a good kind of bridge to how you got started with Locky. So there's the story. That you always tell about your uncle wanting to rent out paddle boards and you were kind of wondering, how the hell do we do this? And can we build a vending machine for paddle boards? Yeah. Can you take us back to that moment and talk about how you thought about this back when you were 17?
Speaker 1Yeah. My uncles are both really entrepreneurial men and have taken many stabs at many things throughout their lives and succeeded in a great, great majority of them. And it was not uncommon, you know, Christmas time at Easter to sit around the fire chatting about crazy business. And I think that's one of the things that made me think of my uncle's ideas and the amount of business ideas that that family wrote up as we were kids to do all sorts of crazy stuff. I distinctly remember a spinning vehicle at one point in time, I think sort of, and one day, my, one of my uncle's ideas was I want to, I want to turn my, my, my ski business into like an automated rental business because he, he was taking people out in the boat and skiing up and down the river with them. Paddle boards will take you off. He was like, I want to automatically rent paddle boards. And I'm like, I can't be there. And, and I was like, oh, that sounds cool. And he was like, well, yeah, that's your job to figure out as often the tech conversations in our family went, yeah, we'll figure that bit out. You can do the tech. And so I went away and, um, I remember trying to code a version over the Christmas holidays while still at school. And I built like a very, very terrible, I think a PHP scripts connected to a Lambda function, which takes it to like a hosting SQL database. And I didn't know how to use any of them properly, but I knew how to string them together in a very basic way to like make them speak and make them do something that, you know, vaguely like a rental system. And, um, and so I built the first version of this rental system. I hooked up some smart locks to it. You could generate pin codes for that we found online and, and it works. I mean, kind of, there was a bunch of double bookings. I don't think I actually knew how to code an availability system at the time. You know, how to, how to properly detect greater than less than what was that? I don't know, something. There was a few double bookings, but it worked. And eventually we kind of moved over the backend rental system to an existing rental software and we hacked on top of it's API is to kind of build it into their, their stuff for a little while. But yeah. For a good, I think it was probably a year and a half that it ran before COVID really hit and the whole thing just got shut down. People were able to go, they'd walk up to it, they'd rent it and, and take it out and enjoy it and bring it back. The worst problem we had was, you know, when people would leave a bit of dirt sitting on top and didn't wash and clean it off, but otherwise like people really enjoyed it. And we, we started dreaming of like, oh my gosh, we can expand this. That's, you know, we were, we, we started in the true car Moema on the, my river, but you know, gosh, we could put 10 more of these down to my river. And I'm sure there's many places that want this. There's so many people that want to do paddle boarding. And of course those hopes were very much. Dashed when COVID hit, but I'm pretty sure Michael had already started welding together a second box to do the. the second location type
Speaker 3stuff does this rental business
Speaker 1still exist no no I honestly wish it did but I think I think COVID was a bit too much for my uncle to survive on the on the business side of things I was still a bit too young to be able to run stuff on completely on my own at that point in time and the by the time COVID kind of came out paddleboards had become a lot more publicly available around the area there's a lot less rules about it it was a lot easier to get you know a lot of people had the kind of crappy ones from Bunnings to go up and down the river on he started doing some stuff again recently though so I I'm excited maybe we can get back up and going again
Speaker 3and back back then when you were 17 did you already see the potential of you know if you can enable your uncle to run his business like that maybe you could enable other people to run
Speaker 1a business definitely didn't when I built the first first version I did when I kind of the second person talked to me about it though because I built that kind of first paddleboard vending machine and and then I had a bunch of other people reach out to me I kind of had a bunch of other people reach out to me I kind of had a bunch of other people reach out I kind of got known by the locks distributor in Australia as kind of that one man rental guy and then when people talk to him about I want to do this what can I use these on my trailers or on my on my bikes he would go oh yeah there's some kid quite literally kid at that time in um in regional Victoria who's done something like that chat to him and gave them my phone number and you know started chatting to them and he was like I could use this for this and I was like and I could use that for that oh and I guess he could use it for that and and then suddenly you know people started coming to me and with ideas and more items they were like oh yeah I could use this for this and for each of them I was like oh yeah I'll custom do this I'll custom do that I'll you know you pay me 10 grand I'll put together the system to do this um and I did a lot of that for like a year or so right out of high school before I actually eventually ended up being stepped up by a startup and um and taking off into that life yeah we're
Speaker 3going to talk about that in a moment but it's probably a good moment to also talk yeah to kind of give the pitch on what's Locky actually doing and um what's your vision for enabling people to build their own businesses
Speaker 1yeah Locky's a completely automated rental system that takes humans out of the process completely so that you can kind of scale up from from a small little business with with two trailers to 600 paddle boards around an entire country if you'd like to our kind of biggest dream here has always been kind of helping and empowering entrepreneurs to build and scale rental businesses rental businesses have always been you know quite a nice lifestyle business for people to run you know you know the local hardware store that rents out a few things the local party events place that rents out some some tables and chairs rental businesses have always been fun but they've never been kind of scalable and so you know shop and fire came and it's kind of going now and and you know allowed people to build and scale these e-commerce businesses but that never happened for rentals and i i've always thought it's because rentals are too much hard work and they're too hard they're too expensive to get started and so what Locky does is make it possible for anyone to start their rental business as a side hustle and then scale it up to be you know a business processing hundreds of bookings every day and millions of dollars every year and we've already done that a couple times for people you know built these million dollar businesses and you know we're on the track to build many many more
Speaker 3what's your favorite success
Speaker 1story? So the first thing i would say to people who are looking for a garage rental place funnily enough this guy came to us he was like i want to rent out mechanics garages and i was like a morph what does this actually look like and he was like well you know mechanics your part-time mechanics or hobbyists really want to get in and maintain their own car they don't want to take it to the mechanics to do it for them but none of these guys can afford to own their own car lift right it's super expensive it's a pipe dream for a lot of them but there's all these old mechanics garages sitting next to gas stations and petrol stations that you know are boarded up and and never get used and so he was like i want to rent out mechanics garages and i was like well you know what if i can buy these locations put a car lift in them put some tools in there rent it out then you know people can come use these and can maintain their own cars and the hobbyist revolutions he calls it for car mechanics and i was like that sounds awesome like we can automate that i'm sure and he was like yeah well because otherwise we can't make the business work the model doesn't work if you have to have a guy stand at every one of these gas stations and mechanics garages and hand over the keys and unlock it for them like the business model makes no financial sense but if he can have 50 of these locations around california well suddenly that's that's a that's a big ass business amazing
Speaker 3and so this guy already scaled
Speaker 1it up to 50 he's on his way he's on his way he's not 50 just yet i think he's on he's on track to opening his fifth now but he's got at each of them i think he has two to three kind of bays that he rents out um at each garage and yeah he's making a killing at the moment from what i've heard so
Speaker 3what does the world look like where lockheed becomes a successful shopify i think it looks
Speaker 1like the new default for running you know being an entrepreneur entrepreneur online becomes not opening a shopify store it becomes opening a lockheed rental store currently you know if you want to be a side hustle the first thing you do is open a shopify account and stop drop shipping and that's why you know so much of the e-commerce industry is just so saturated right there are so many drop shipping stores it's so hard to compete i think the default becomes no i want to open a rental business i want to rent out my guitars my car my trailers my my bikes whatever you can think of and i want to scale up a business like that i think that's the the default where the industry should go especially because you know rentals bring something that e-commerce doesn't it's local but you being a good business operator kind one a responsible one actually makes a difference with a drop shipping store it's basically just how cheap can you make the shipping and how cheap can you make the item with rentals it's like no they're going to come back how good can you make the experience how quality can the item be how close is it to the customer that starts to matter again i think local businesses can start to matter a lot what
Speaker 3vertical do you think is going to be the biggest ones or yeah which ones are you most excited
Speaker 1about honestly don't think we will be able to know and that's the most fun thing about it i think the biggest ones that are going to continue doing it are the ones that are going to be the biggest ones that are going to be the ones you and i couldn't even dream of i mean the garage one is already one that i went the heck did that come from like who's renting garages that sports equipment uh we just had a couple guys in in europe start renting out like dumbbells from from workout parks like all these things that i just couldn't we couldn't dream about my hope is that it becomes power tools because i hate owning power tools i have no space for them but i need them you know once every couple of months and the funnest stat about them is if you buy a drill on average people can use it for like 12 minutes for its entire lifetime you buy a drill you're going to use it for 12 minutes so i'd much prefer to be able to walk downstairs you know go down the road and pick up one from a little rental locker that's run by lucky bring it back use it for a couple hours and then take it back
Speaker 4hey bode what do you think about kind of like what what your business like how well your business does how how well how good of an indicator that is for how well the economy is doing right because like when you when you think of a business like airbnb and like a part of the reason that i took off was it kind of came down during the whole like kind of post gfc you know you know sort of financial troubles and uh people just were like open to making a few extra bucks renting out their couch right whereas like if that didn't happen maybe maybe the whole idea of renting out your couch and having a stranger sleep you know in your house would be very very strange so kind of i guess two questions right first like yeah do you think that yours is similar business and i mean are you kind of like seeing any benchmarks around like hey has the economy sort of slows down in certain places things like this
Speaker 1yeah i think it's the cost of living grows and and yeah the economy does what it's doing right now more and more people want to start these side hustles i'd like to think that you know when the economy is healing is when lockheed's going to be doing the best right as as it goes down we're going to continue to grow but i think as it starts to heal again we're going to see the biggest success success stories appear out of lockheed we're going to see the the guys that who make make billion dollar businesses out of automated rentals are going to come in that healing phase as of right now yeah i think as the as the economy continues to go down and as cost of living goes higher we're seeing more and more people want to open side hustles and start to own their own income and their lives and so i think it's going to be a big part of the economy and i think it's and yeah that's that's helping us get more and more customers every day i was just wondering if
Speaker 4like airbnb was a weird business so it was uber yeah right in the beginning yeah people are like this is these are strange businesses like we would not naturally want to jump into a stranger's car go sleep in a stranger's house but for certain but certain technologies made it possible like i guess you know just mobile phones everywhere being able to track where a phone was the gps but also just economic financial factors that made people open side hustles because they just needed to make a little bit extra money i'm just wondering if like i guess there's two questions in there if the first is like why hasn't this already been done at scale and two like do you think the growth you're seeing now is that is that a function of the fact that we're kind of in in maybe a similar time
Speaker 1yeah yeah i i do agree that it's a weird business in a lot of ways and you do get the same response as airbnb did back at the start of automatically i'm not gonna be there to hand it over like i can't look at the guy and judge whether he's gonna be you know i'm not gonna be there to hand it over i'm not gonna be there to hand it over a weirdo that takes my item drives it off a cliff or you know i can't i can't gauge those things you get those same responses but it's interesting for consumers you know the people renting these things you get a similar response to airbnb which is like my god this is so much easier right there's so much more convenient because there's so so much kind of i guess pent up frustration with the rental industry in in general right with with the big hardware stores that rent out things there's so much frustration around how they manage things and how inconvenient it is inconvenient it is for for kind of normal people that customers are so happy when they they find these things exist and they're done properly they they think it's so much easier it's so much more convenient for them they they'll choose it every time over kind of a standard old rental business but they have to wait in line because it's rather than kind of rental businesses being built to run conveniently for the business you know doing it automatically is is running a business in a way that's more convenient for the customer and that's a lot of how we build locky in our mind is like okay yes we need to make this easy for the operator but first and foremost we've got to make it really really convenient for the customer they've got to want to choose this process for anything else i think all the economic factors combining at the moment are yeah very similar to what happened with airbnb at the time with people really wanting to be able to to own their own income to to build their own businesses to feel a bit safer in these times and with you know e-commerce going the way it is with shopify you know and the reputation of dropshippers and stuff going the way it is rentals is really the new way to start that sort of side hustle over starting another
Speaker 3dropshipping business i want to go away from rentals a little bit um we'll come back to it later but um you already alluded to you taking your first job at another startup so we want to talk a little But a different physical world problem, which is nightclubs. You were working as the founding engineer at a bottle service software company. Tell us what you did there and what that was about.
Speaker 1Yeah, it's about as far as we can get from what I do now in a lot of ways. But that start was completely built around the idea that the bottle service industry comes with a really complex process that needed to be simplified somehow and need to be made scalable because every bottle service venue ever, that's after like six months or a year. They open, they run, they make a bit of money, they close back down. And in our eyes, a lot of that comes from the fact that the whole thing was too human driven. And the second one of those humans that kind of is the crux of the entire upside down pyramid leaves to get a better job or to leave the industry in general, the whole process kind of collapsed. And so I thought was, okay, can we turn this into a reasonable thing and scalable thing that people can use all the way around the world? It was a very interesting first job as kind of an engineer living school. I remember kind of one of my first nights going into one of the clubs to work there. I was sent in. I was sent to go buy some random bottles, bottles of champagne, like was literally just give her the company card and like go buy these people some champagne. I was like, okay, sure. He's like little 19 year old me, longest hair. I was, I did not belong in these clubs alongside the people spending, you know, hundreds of thousands of dollars on things just sitting there next to the, you know, six foot one models going, here's some champagne, but it was a, it was a hell of a way to learn how to live. Listen to your customers in a, in a, in a really big way. Like I went into those nightclubs on a regular basis for once a month and would just follow around the people using our software and learn the process, which I know they'll tell you this is very much like a process. You only get to know if you work in the industry and you're there, like there's so many intricate pieces that they kind of mesh together to create this choreography of that is bottle service. And so sitting around, following them around and going, the heck do we codify this? Like, how do we make this simple? How do we make it so anyone can pick this up and learn it and run? But I think we ended up doing a really good job.
Speaker 3What were you looking for specifically?
Speaker 1I think kind of the things that, that they do by yelling across the room, by screaming into radios, by putting spreadsheets with whiteboard markets, markers on the wall, like every night they would go in there, they would, a couple of the businesses would print out 30 different pages of paper, you know, one to give to each of the girls that have a bunch of information, a couple of stick on the wall, write things off. And then another one to cross out what's been ordered and what's not been ordered. Another one to stick receipts to, and like another one to kind of tally up how much you give to each promoter. It's, it's a mess of like. Processes and money, substantial amounts of money, like flying all over the venue very, very quickly. Um, and you know, it wasn't uncommon to see a thousand dollars go missing here and there because someone forgot X, Y, Z, someone forgot to put a transaction through, someone gave out a bottle without, you know, a ticket being paid. And unfortunately in these situations where it's so much money and the people are who they are, it's tough to kind of chase them down a week later, a week later and go, Oh, Hey, you know, you weren't out of any two weeks ago. Can you send me a thousand dollars for the bottle we gave you and you already drank? No, sorry. I would chase around. I don't know. I don't know. One of the nightclub managers here in Melbourne, Nikita, still a great friend to this day now, but I chase around the nightclub and kind of learn exactly as she's doing, doing everything. And kind of the biggest thing for us in the end was safety because with bottle service, you're putting these people in the middle of a nightclub and, and their job is to be a bartender and to, to pay attention to the, to the people that are serving the table. But they're also in this incredibly unsafe environment surrounded by hundreds, if not thousands of partygoers in a very small enclosed space with security, maybe not able to get to them super quick and with no clear lines. So communication from them to kind of the back of house and security, like the best you could do is yell into a radio on your, on your shirt, but like it's a nightclub pumping at 1:00 AM. No one's going to hear a shit. And we find that so often was just like, I need help. Yeah. I need it. Table one, table one, please. Can you send a manager? I need security. Even if it did get hard, half the time it gets forgotten because you know, they're dealing with something else. They're dealing with another client and they missed the radio call. Yeah. It was, it was chaos. And, and it was a very interesting industry to try and I guess automate. I can imagine that.
Speaker 3And you, you were saying that it's very far away from what you're doing at the moment, but in a way it's also kind of like observing the physical world and trying to automate processes. Is there anything you learned from that time that you're not taking back to Locky?
Speaker 1I think the biggest thing I learned was that I do love automating physical processes, like dealing with things that are outside of my control and software's control. Like there's so much in what we do at Locky that is completely out of our control. So much. There are so many edge cases for items we have and any single item can be in one of the couple of hundred states nowadays. And it's, how do you take that and kind of merge that down to something that you show to a, to a user that's incredibly simple and easy to follow, you know, for an end consumer, it's gotta be one button right on the page. That's all you can really give them. You can't give them 10 options. It's gotta be one thing. So how do you take all these different states and edge cases and convert them down into a single happy path that means that, you know, the operator never needs to get bought into
Speaker 4it. I was just gonna ask what, what did you end up building for the, for this bottle service company, business product? Like what was, what was the final, like, what did you learn about the actual like problem space and the users and what, how did you end up solving the problem?
Speaker 1Yeah. So we ended up building a mobile app. Um, was, was the main thing. So it was, it dealt with everything from being able to keep track of every single table, every single item ordered, building in effectively what is very simple, like a bump screen, the Mac, McDonald's bump screen that sits back behind the bar to be able to kind of put those through and then kind of the system that was different to kind of the POS system is that a different person deals with every stage. A different person orders it, a different person collects the payment for it. A different person prepares the bottle, a different person gets it out there and a different person maybe handles finding the dancers who, you know, come out and they're, they're crazy outfits with two bottles of champagne with sparklers on top. It was like six, seven, eight people that were involved with every single order that flows through those businesses, especially in some cases you then have like a promoter and like the, the greeter and all these other people involved in the process. So how do you turn that into, yeah, a simple bump screen that would basically every single action would kind of fan out to one, two, three different people to tell them what they needed to do. You get approval from them to kind of take it off and go, okay, yeah, I've done my part. I've done my part. I've done my part. Okay. Now we can get the dancers. You just ping the dancers on their phone. They can come out and get the bottle. They can dance it out. Yeah. It's, it's a bit tough to break down what it did because it did so much. Like it was very much a vertical SaaS that just did everything it possibly could to try and automate it altogether.
Speaker 4Interesting. And you, and you would sell this to venues?
Speaker 1Yeah. We would sell them to venues and, and kind of sell them a monthly subscription to the, to the app. We'd help them take bookings because we, we needed, part of the problem was turning what was very unstructured data into something that kind of needed to be quite structured and AI did not exist at the time to be able to kind of turn, turn a simple email into a kind of very format, formatted stuff. So we kind of helped them take bookings as well and yeah, we'd sell a monthly subscription to them. We got it in, it was like 350 venues around the world in the end. Which was, which was massive, but we kind of getting kind of middle of last year, starting to realize like no matter how much we build onto this, nightclubs are just a very tough business. As I said before, they open and close really quickly, right? They change ownership constantly. Staff turnover is so, so, so, so high. And you know, it's hard enough to pay to get into one of these venues, right? You turn up there with a wad of cash on a Friday night and you're like begging them to let you in, let alone turn up there on a Friday night and ask them to pay you money to give their new software. So the sales cycle was long. The, the client's lifetimes were dubious. It was, it was, it was very much a hard line for a lot of different things we did.
Speaker 4What, what is kind of bottle service and what was the kind of fundamental problem? I guess, what is the user experience and what were you like, how did you come up with like the problem statement that you were trying to solve?
Speaker 1I didn't actually come up with the problem statement, I was the founding engineer. I got told the problem statement when I first joined and the problem statement was that they had built the first ever contact us ordering software in 2012. They were a tad bit too early by like, you know, 10 years and somehow that had gotten picked up by a couple of nightclubs around Melbourne who'd gone, oh, we could, we could use this for us. And you know, they kind of just kept coming back with, can we add this, can we add this, can we do this? And when I joined, they just kind of found the point where they realized that, you know, the core problem was the core thing we wanted to focus on was nightclubs. That was, we really wanted to nail doing bottle service at nightclubs. And so my job was basically to go in and go, okay, well we've, we've hacked a product together that works for them, but now we need to find a way to make this, you know, scalable and you can take to other places. So the problem was solving lost money, a lot of lost money, lost profits, lost upsells and safety on the floor. And so I just went and sat in and I learned what those processes are. These venues, the ones that are running for a while have really, really cool detailed processes on how they do certain things, how they protect the people on the floor, how they make sure money doesn't get lost. It's just an incredibly manual thing, as in for like up to 30 different pages of paper printed on a given night to try and look after everything. So my job was to tell us,
Speaker 4tell us some of those things, like how do they protect the workers? How do they make sure they don't lose money?
Speaker 1Yeah, it's part of it's having so many different people involved. People love to steal money from nightclubs and people like we were involved in so many scandals where people like staff are stealing money from nightclubs. So they, they set, make things separate out like three different people. You have the manager, you have a person who's just in charge of payments, who's sometimes paid directly by a separate thing, not just the venue, like paid by the owners and, and then you have the runners. And then you have the girls on the floor who actually, you know, take the orders. So everyone's kind of responsible for a different step to try and protect everything. So part of us then was like, okay, this is incredibly inefficient. This is costing them so much money. This is costing them upsells. Like upsells are the biggest part of bottle service that makes a difference between a venue that kind of exists in a venue that kind of grows and becomes famous for it. It's you know, how much, how, how can you make sure the clients have an amazing time and then be right there at the moment they're going to be running low on a drink and get another one sent. And if you're a few minutes late, too late with that, right? If you're a few minutes too late with being there to upsell that bottle and the payment isn't taken. And you know, the group comes back from the dance floor and they actually, we're going to leave. the bottle anymore like bam there goes your upsell and and really there goes the majority of your profit on that table because venues a lot of the time make their profit from the upsells rather than just the upfront booth cost which goes to promoters and things like that bodie i mean
Speaker 4so just a dumb dumb question but like wouldn't it be easier to just put a like a ordering screen there on the table let me just order
Speaker 1yeah you'd think that but these guys are put disrespectfully rude assholes in a lot of cases like the staff that are in these venues are the loveliest humans on the planet the people that go into these venues to book bottle service weren't exactly the type of people who want to be tapping in on an order screen on tables right they don't want that no no they're there because they're rich and they want to look like it they want the private the bartender standing in front of them in australia it's a legal requirement but they also want the private bartender there because they want to be seen as having you know having this important kind of person have their own personal staff member all this other stuff like that's part of the experience for them it's also a legal requirement by the way you have to have a staff member there especially in australia for responsible service of alcohol reasons so they have to have a staff member there for responsible service of alcohol reasons so they have to have to be standing there regardless but it is it is just generally part of the experience in most of the world and in other parts of the world where they didn't have staff members there they made remarkably remarkably less money so when when staff members were instead you know sitting back of house only coming out every now and then to check whether you want more they made less money just flat out fascinating fascinating it's it's a fascinating industry and i had a blast trying to figure out how to how to automate it and how to codify it and how to make these processes work everywhere like it really was a fascinating thing to work in and especially as your first job like being sent to a nightclub to to buy model champagne and to follow bartenders around and to and to just be there in that environment as a software engineer i can't imagine too many other kind of first-year software engineers sitting in a nightclub learning how to do their job there's a couple funnest of me in la in a nightclub coding it's
Speaker 4funny i kind of wonder like did the founder of this company like he built a comp contactless payment solution did he you know did he personally just want to spend time in nightclubs and he just fit fit the solution to the context yeah i think that's a really good point i think that's a really good point i think that's a really
Speaker 1good point so i said i the running joke was they just wanted to be able to tax deduct drinks and bars like that's why they started the contactless ordering solution was they wanted tax deductible drinks right in the end i think it was just where the where the industry took them like they started in contactless ordering and the the nightclub industry needed like software they needed the help there are so many solutions in the in kind of the event space for ticketing and for guest list but beyond that it's a pause system or it's a booking system that's it there's nothing that helps with the operations there and so he was just pulled in that direction and he was like quite forcibly like we'll pay you more money but we need you to just do this and so he ended up being there i can't say we didn't have a good couple fun nights being you're out in the night clubs building software and learning from people but it definitely wasn't my by the end of it was not my favorite thing i'm not a nightclub guy i don't go to nightclubs i don't i can't dance to save my life i don't know you know i
Speaker 4don't know how good that i mean i don't know i the quality of that software might be dubious the stuff that you were coding at 2 2 a.m after a couple of drinks
Speaker 1yeah look there was some there was some dubious functions in there there was some there was some look i never wrote money calculations when when we'd had a drink that was that was a flat out rule you were never allowed to write anything to do with money
Speaker 4did you get any girls sitting there coding no no no no no
Speaker 1because i'd sit there i'd be like a little nerd in my like nerdy outfit like just sitting like i'm chasing around the bartenders like i looked nothing like anyone ever wanted to talk to and in fact i almost so the funny story of how i got into that startup was i was working in a nightclub as a lighting guy so i was tapping the at the back of the nightclub and i turned around and i saw this kind of what i would describe as a creepy guy sitting at the back of the club just eyeballing the shit out of the bartenders like completely just eyeballing them and i was like this guy's creepy i'm kicking him out like these bartenders are my friends yeah i can't have him eyeballing them and so i walked over to him i grabbed the security guard walked over to him i put my hand on his shoulder and i said hey mate what are you up to he's like i'm watching how people are using my app what app and four days later i joined the startup as the founding engineer so you tell me who got you there i think it was me but to be fair that that guy is is now the founding sales of lucky he's a he's a plenty good salesman wow
Speaker 4did people ask you did people ask you what the fuck you were doing sitting on a computer on a totally yeah
Speaker 1yeah yeah no there's there's plenty of situations if we go why are you like what are you here for the amount of security guards i almost got kicked out of the venue by because they're seeing this like tiny kid run around with a with a laptop with no interest in partying um and you know something rather sketchy the amount of cards that would like stop me what do you know what do you know like was was really freely doing actually in the end but the venue staff are amazing and what a hell of experience to write your first code sitting in a
Speaker 3nightclub cool well i'm sure mark has never been to a bottle service nightclub so i think that's why he's generally curious about
Speaker 1it you're in miami though mark are you
Speaker 4no i'm in north carolina at least
Speaker 1okay okay okay i thought you might be in miami i was saying if you if you live in miami and haven't done bottle service like
Speaker 3come on but uh no i want to come back to lucky so yeah we we kind of learned how you identified the problem um but there was a specific week from when we first talked to you told us the story there was a specific week where this stopped being kind of like a contracting business and became really a company you said last year that you had six rental operators called it calling in on the same week those were i think like trailer operators from australia and new zealand um and some pedal boat operators from the us and they were all asking the same thing yeah take us take us back to that week what what were they asking
Speaker 1yeah it was a it was an interesting week i'd um i'd been doing some contracting work on the side and we're starting to get to the point with nightclub software we're like where's this going are we going to get to see the growth in the long term that we want to see and i got on a call with someone who i'd been like building some of those relations for for a couple years and he was like hey look we really want to grow we're going to add another couple locations this year we'd really like to go quite fast software is like when it's fine it works but it's not we can't scale this up it's not gonna work could you kind of custom build something for us i'm good i'm working at a startup like i haven't got time to to custom build this for you like i haven't got time to to do a custom build this for you like doesn't make any any sense for me at the moment you know that's me in a few months and then i got a call the next day from one of my other integration clients going hey so we're you know we're scaling up a little bit really think we need to build some more this needs some more features behind the scenes it needs to be easier for the customers it's a bit complex there's all these edge cases and this is the thing with all these automations i built the call worked but the the volume of edge cases with physical goods is just so high and they're like we really need to start to solve all these cases otherwise we can't scale this up and then i was like oh you know okay maybe i can do a contracting gig for you at the end of the year i've got a few months of the year might be a little bit free or we can put together a deal or something uh and then it just kept coming that week and i have no clue why i got a i got an email from the one of the parable operators in the u.s saying a similar thing just like oh this is great but it's starting to become a problem and then i took a meeting with uh someone who hadn't previously i'd done integrations for you this is a new customer who was kind of wanting me to build that he was kind of listed off what he wanted it was very similar to what the other ones had wanted and i was very conscious in the back of my mind that you know if i was going to code in this custom thing again he was probably going to run into all these same edge cases with the other guys and so i was kind of just kind of talking about it almost and he turned to me and he was like how about i pay you like nine bucks a trailer you know we've we've looked at every single other solution we've looked we've tried or every other software you seem to have the best understanding of what we actually want here you just don't have the stuff can we just pay you per trailer rather than paying you like a thing and also he said it because they didn't have the money to pay you like 100 grand and build the custom system and i was like that's a business and and i went away and i had a really long sleep and i got a similar call from another customer the next day and i said would you pay 12 us but i think there were there were panabots per panabot and they're like yeah of course no no yeah of course we will i was like oh that was a very quick yes and and i called one of the existing integration operators i said would you pay
Speaker 4yep done um and
Speaker 1i mean did at any point in
Speaker 4that time did you think maybe i'm underpricing it maybe i should ask for 13 i
Speaker 1know i think i realized that about a week later um that perhaps there was some underpricing being done but at the same time you know these guys don't have one or two items these guys have 50 100 items and so at that case at that price like this is already so expensive in my mind like we're already at that point almost coming in as one of the most expensive rental platforms you can actually buy at all and i was like this is this feels crazy i'm asking for like a thousand dollars a month or two thousand dollars a month from these guys no way they're going to do that and and they all agreed and so i think it was saturday night i said let's just see what i can put together and so i started building out a rental system billy me thought it would take a night it ended up taking about six months to actually get it to the point where we could solve all the things that need to solve because as i said this didn't this couldn't just be what i did the existing rental software we've been integrating with plus an integration on top this had to be an actual full solution it had to do everything it couldn't have the edge cases that come from kind of hacky integrations they just couldn't happen there's we can't afford one percent of rentals someone turning up on the item doesn't unlock and they have to contact customer support because at scale for some of our bigger operators that just that's just not going to happen and so we spent six months kind of running down these edge cases just completely trying to solve every single single one we could and we put it out late last year and immediately obviously those those first customers all came on board i just did i think another maybe 10 or so no seven or so come on board just after that of other people i kind of built integrations for where i reached out and said hey would you be interested and they're like yep done here's my credit card and so we ended last year with our i think first 13 customers or so which is right as the end of the year and i think that's what we're going to do for the rest of the year and i think we're going to do it for the rest of the year and i think that's what we're going to do for the rest of the year
Speaker 3and did you did you solve all the edge cases or were there new ones coming up that you didn't
Speaker 1anticipate so many new ones it continues to be so many new ones you solve one and and that's great it solves you know maybe you have a problem that affects one percent of bookings right you solve that and then there's three problems up here that affects you know zero for two percent percent of bookings because like each of these as a physical hardware there's so many things we can't control so you're basically just playing whack-a-mole but every month that's kind of what we're working on
Speaker 3and you were we were talking about this earlier one kind of number one thing that you care about is rely liability, right? Because this is the income from the operators, the entrepreneurs that are running their businesses. And you have an alarm system. So if something goes wrong, you sometimes get up at the middle of the night to fix stuff. Tell us what you told me earlier about when you got up
Speaker 1this morning. Yeah, my 3am alert this morning that came through for one of our databases running 100 milliseconds slower than it should. Right, fun. My girlfriend, very unhappy with that this morning. But yeah, we very early on, we tried to figure out what's kind of our core kind of KPI we want to focus on when building Locky. Because MRI doesn't seem the right one to focus on completely from the start, right? We need to focus on making sure that people are going to build businesses because of the way we're priced. If they grow, we're going to grow too, right? That's the whole thing. And so we kind of took this page out of Stripe's book, which is the bad day metric. What do you consider a bad day for your customers? And how can you optimize for it? And we kind of went back and forth for a while on what a bad day looks like for our customers, whether or not it was, you know. Having to deal with, you know, five bookings that had an issue or 10 or 20. And eventually, we realized, no, no, it's if they have to do anything manual on any booking, that's a bad day. And so that's the metric we live and die by. It's if something goes wrong, and they have to do something, that metric ticks down. And, you know, that's what we spend a lot of our time solving those edge cases for because every edge case adds another percent to that meter. That means our customers are happier and happier. And the more that it's automated, the more they have the ability to grow. Like, it's very common that a customer comes on board with us. And a month or two later, they call us and they go, I could have done nothing this week. I think I'm gonna have to buy more paddleboards. I think I'm gonna have to buy more bikes. Like, I'm doing nothing. And previously, these rental businesses, like, ruled their lives. And they'll tell you themselves, like, they would spend all of their time dealing with maybe even just having seven items because it was too much. They couldn't deal with anything more than that. It was just, it was a lot of work, especially if they're already working a full-time job. And so, you know, they spend a couple weeks with us and they realize they're doing, you know, 1%, 2% of what they used to be doing. What else are they going to do than turn around and start putting that money into growth?
Speaker 4What, how does, so this is something I couldn't wrap my head around at the beginning. How does your product actually work? How do you actually allow someone to rent something to somebody else without being there?
Speaker 1Yeah. I mean, the start of it is just booking, right? Every rental system has that. Go online, book an item, right? Then the next step is verification. So it's understanding that that human who's saying they're going to rent the item is who they are. Unlike e-commerce where you give the item and you don't want to back-rent. With rentals, we kind of want to get our things back. So we need to have some set of things to try and hold the customer accountable for bringing their item back. Whether that's just keeping their credit card file on file, whether that's keeping a security deposit, or whether that's going as far as verifying a driver's license. In the US, we even can verify social security numbers, all that sort of stuff. So we verify everything. And that happens before you can pick up. You cannot touch an item until you have done all the verification steps that the rental business finds relevant to them. And then the next step after that is kind of the pre-pickup process of doing like the legal handover. And so in person, a lot of that looks like the operator will take a couple of photos of the item. They'll answer some questions, maybe sign a waiver. And so again, we converted that all to automatic and we convert that down from what used to take a five-minute process with the staff member to a 30-second photo, photo, photo. Yes, I agree. Done. Yes, the trailer's in good condition. Yes, the bike's got a chain on it. Yes, I will wear a helmet on the road, whatever. And then after they've completed all those steps, we then actually give them access to the item so then they can unlock it. And we do that in a variety of ways. We use like IoT locks.
Speaker 4Yeah. How do you actually give them access?
Speaker 1Yeah. It depends on the item and how big they are or how small they are. But in some cases, we use IoT locks whereby we can trigger them to unlock and re-lock remotely. And we can check that they're locked or that there's something in the box and those sorts of things. On bigger items, we can sometimes use things like padlocks or key boxes that we can give pin codes to that are time-bound. Yeah, we've got e-bikes now where we can cut off the power remotely. We have bike stands whereby the bike stand will only unlock once you've paid for it and done all the other steps. It depends on the item. But generally, it's just some form of physical release so that the customer can't take the item without that kind of.
Speaker 4Right. So it's just kind of like Turo or Zipcar or something, but just for anything, basically.
Speaker 1Yeah. And we've got people building car rental companies on us. Like, yeah, sure, you can rent them through Turo, right? But you're giving away how much of your business to a company to kind of just take bookings for you. When you can do it through us, get it cheaper in a lot of ways than paying that X percentage and build your own business rather than build someone else's. We integrate with marketplaces. Yeah. Yeah. We work with lots of different marketplaces to allow our customers to rent their items through marketplaces or OTAs and stuff like that. But generally, the idea is the reason Shopify is bigger than Etsy, in my opinion, is because people want to build their own business. They don't want to be building my business. They want to build theirs. And so we spend a lot of time making sure that the rental process is theirs. It's their choice how they want to do it. It's their choice what questions they ask, what photos they request, how they want to verify, to what level they want to verify, right? With the verification steps, especially, it's a trade-off. How secure do you be? Do you want the experience for the customer to be? It's a massive trade-off. So they get to set those trade-offs and what makes sense for their business and their risk profiles.
Speaker 3What's the hardest vertical you ever tried to operate or to automate?
Speaker 1Oh, that's a great question. We're working on a couple now that I think will take an extra few weeks to get some things together. Cars are probably the hardest one in a lot of ways, just because they're so high value and you really do want to make sure that everything's perfect before they come and drive away with them. But in some ways, because they're so high value, they were also one of the easiest ones to put together. They're just the scariest. Cars are the scariest vertical in a lot of ways to do. The hardest physically, I've got to say bikes. Bikes are just, they're an absolute pain, but they make so much money. So it's the trade-off of that. They do really well, but so many expenses, so many maintenance issues, right? Like massive pain. But I don't know, I feel like most industries are similar levels of pain generally, just kind of differences in how risky it is and how much money you stand to lose and all.
Speaker 3And what's the, is there a vertical that you'd love to get onto your platform that you don't have
Speaker 1yet? I'm just trying to think personally, what do I, what do I want to rent out? I think the ones we've wanted to get, the first one we really wanted to get on that we didn't have for a while was power tools. It's like, I really don't want to be buying power tools. I want to be renting power tools. And conveniently, we now have a couple that are coming on board to do that. So I feel like we've satiated that for now. And I don't have to go buy my power tools anymore. Gym equipment's a fun one. I'm really excited. We've got a few more rental businesses, renting rooms starting to come on board now in terms of renting like golf simulators is a fun one. It's just someone set up, even someone else doing the full gyms, like private, like gym studios type things. And we've got some saunas coming on in Europe, like some floating saunas. They're a fun one. I think for those ones, I just want to make sure I get a coupon code that I can go use when I'm there next year to get a free sauna floating on the river preferably.
Speaker 3Very cool. Awesome. What's the number one thing that people mostly get wrong about your business?
Speaker 1They think we rent houses. Like that's the wrong about our business. They think we rent houses out and we're Airbnb. I get that on occasion. Like, yeah, can I rent my house? Sorry, can I rent a house through you? Do you guys have houses on your platform? The second one is that they think we're a marketplace. And that was a really clear distinction for us at the start was we didn't want to be a marketplace. As I said before, we want people to be able to build their own businesses and not build ours. And that's why we didn't go the route of building a marketplace first and foremost. That's probably the big most common one we get nowadays is that people think we're a marketplace. And they say, yeah, that's a bad thing. Like when they ask that, they're like, oh, so you're the marketplace, right? They don't say it like they want us to be a marketplace. They say it like they don't want us to be a marketplace. So it's always a good answer when you go, no, no, no, your business, like your logo, your name, you know, you're there. We don't need your customers to know who we are. We just need to, you to know who we are and you to be happy. And yeah, that's probably the most annoying thing we get currently.
Speaker 4Bodhi, what was the kind of consideration kind of on, you know, deciding whether to be a marketplace versus to be sort of a, I guess, what would you call it? A SaaS or service provider, white labeled for other businesses?
Speaker 1Yeah, I spent a fair bit of time at the start thinking about this. To be honest about whether we wanted to go the marketplace route or whether we wanted to go the, the direct to consumer or the direct to business route. And the thing I came to is what would I want? What do I, when I'm building a rental business, do I want to be renting through Locky Marketplace? So do I want to rent under my own name? As an entrepreneur myself, like, do I want to rent my items through a marketplace or do I want to build a business? I want to be able to put my name on it, right? I want to be able to put my logo on it, my colors, my style. I also want to be able to define my own process. The world is littered with kind of the bodies of marketplace rentals. It's rental platforms, right? There are so many. And there's a few that kind of continue on to this day and, you know, have some slight success, but the, the field is, is littered with the bodies of, of rental marketplace companies. And while we think they'll have a resurgence in future years when they connect to Locky and customers can choose to rent out their items through them as just another channel. For now, I think that the goal is really to kind of help people build their own business, especially with the way the economy is going, right? You do want it to be yours. You want to be able to scale it up. You want to be able to feel like you can turn it from a one item side hustle, right? To a thousand item, big business enterprise. That's, that's the goal for about every customer we get on the phone to the first question we ask you is like, do you want to grow? Do you want this to be bigger? And I'd say 90% of the time they say, oh yeah, yeah, yeah. If I could grow, if I could quit my job, if this could be my full-time thing, right? I'd do that. And you know, the amount of times you get that answer as a marketplace is a lot lower, right? Then they, oh no, no, I'm, you know, I only just want to rent one. No, I'm just trying to make a little extra money on the side. I don't want this to be actual thing. That's the, the people you get over there that it grows fast and they're not as committed to it. You get the people who are like, no, no, no, I'm going to make a million dollars out of this. Yeah. That's, that's my next thing.
Speaker 4What are you seeing kind of just more broadly are people, is this something that is renting things? Is that something that's becoming some people's jobs, right? Are you seeing kind of those kinds of changes?
Speaker 1Yeah. Yeah. I think, I mean, we've helped, we've helped create multiple millionaires out of rentals now. We've also helped a couple of people quit their jobs. Yeah. To, to just start growing their rentals full time. And, and that number will continue to grow. Like we, I think I posted on LinkedIn a few months ago, like listing how many we'd, created millionaires at that point in time and how many we thought we'd create in, in our first year of full operation. And I think we're at this point in time.
Speaker 4How many have you created?
Speaker 1I don't know the exact number so I can go check if it was just what I published at that time. But I think we'd be at two or three now. If I can't remember what I published at that time whether we were still
Speaker 4What are these guys what are these guys rendering?
Speaker 1Trailers. They started off with trailers. They're our first they're our big chat. These guys started off with trailers. Yeah. And so we're going to see that in some other industries for sure. We can already see like we can see from the metrics who's doing really well and it's the people who are going all in and committing and really are not just there for a few extra hours they're throwing in like I open up my metrics and they're still on it right now but they're based in the US like that's that's what we know they're going to do like we have one guy who would go from one trailer in one month he started with us by the end of the next month he had eight and his second month he'd made $10,000. In two months he'd gone from $0 revenue to $10,000 and he'd gone from one trailer to 10.
Speaker 4That's right. But hold on but I guess how like on a scale I don't know one to 10 where like you know one is like you bring kind of just a little bit of value versus 10 is like they could never do this without you where does Lockie fall like how critical is it to allow them to do that?
Speaker 1I'm an Australian I'm too humble to answer these questions. Look I think for a lot of our businesses they could they could probably still operate without us but they couldn't scale without us and so some of these guys could start their side hustles their regular side hustles and absolutely run run without Lockie but the guys who are doing going from one to eight and the guys going from 20 to 50 in a year like those are the guys that like I mean you can ask them yourselves they'll tell you they wouldn't leave us in a heartbeat. They've been approached by one of them got approached by kind of a standard legacy rental software a few months ago and he took a meeting with them and they were like yeah so it's going to cost you like $800 less a month right? And he was like cool cool cool and look we did a feature and at the end of the meeting he turned around and was like so to switch to your rental software I would save $800 in software costs. I would then have to hire approximately 10 staff which would mean monthly you would be costing me $30,000 and they were just like yeah all right cool so we'll chat soon like it's just that like yeah I'm sure they could exist without us but they'd be very different businesses and they wouldn't be scaling and that's why we exist because we really we want these guys to scale.
Speaker 4So the legacy software requires you to hire like a bunch of extra people and you guys empower like the individual to basically do it?
Speaker 1Yeah I mean they talk about the what is it the $1 trillion startup or the billion dollar one man's unicorn startup that's coming I think in rentals right the $1 million rental startup is a crazy thing like to talk about like in the rental industry that's a massive number to do in your first year as a one man startup and we've seen it happen so it's like and we're going to see it happen again and again we're going to see it happen more and more over time as these guys continue to start all these crazy ideas.
Speaker 4I mean what do you think about how does where does this industry go like does it at some point these smaller kind of guys get consolidated to bigger players what is are there bigger players yeah like what's the broader kind of macro in which they're operating?
Speaker 1Yeah I think there's going to end up being a lot of medium sized buyers and a lot of smaller ones doing more boutique stuff at the market I think generally as I was talking about earlier with I think rentals are local right they're a lot more local than Shopify and that comes with a lot of advantages right people want to start an e-commerce business in America right now they're competing with the guys out of China who sell the same item for two dollars right it's a tough fight for them and so Shopify I think and e-commerce businesses in general are becoming less and less attractive to start because it's just so freaking hard to compete local doesn't matter unfortunately online in that way with rentals it matters again and so I think the idea of the local kind of rental entrepreneur having their items at a bunch of 7-Elevens around their city right is going to continue to grow and there's going to be a whole bunch of those and there's going to be a whole bunch of guys who take over a state with trailers or take over a whole bunch of national parks with their bikes because unfortunately local will matter and you know the guy from China can't compete on the same level because he can't be there to provide that same customer support the guy from Australia can't run the rental business in the US anywhere near like the guy in the US can and vice versa in Australia
Speaker 4cool because actually my next question was going to be like you know if you can automate it or one guy can do it can like AI agents just do it
Speaker 1unfortunately AI agents don't yet have hands and one of the biggest things about rentals is maintaining your items is really important
Speaker 4I see but can't you hire but can't you hire people to come to maintenance
Speaker 1yeah yeah and that's part of what we do is like one of the things we've been building out is helping our customers build out like a network of people to maintain their items when they're geographically distributed is being able to kind of have a marketplace with people who can come up and repair the tire or whatever on the bike etc and I think that will continue to grow over time yeah if you can negotiate the location deals and negotiate the human side of it I feel like an AI agent one day could pull off a rental business of scale maybe we should do a test like the philanthropic guys did running a cafe see if an AI agent can successfully run a rental business
Speaker 4yeah but wait I didn't know they ran a cafe
Speaker 1yeah there was a whole thing I think one of the labs or some research thing ran a cafe with AI and let it order all the things that it like set the prices all that sort of stuff it was a fascinating video to watch actually it did not go well but it was fun to watch
Speaker 4oh it didn't go well why didn't it go well
Speaker 1no no still too suggestive I think I think it's still a bit too easy to kind of almost prompt inject the AIs to do what you want them to do like at the end of the day the consumer has to be able to communicate to the operator what the consumer wants and what would help them and unfortunately AI is a bit too quick still to go oh yeah let's implement that let me purchase $10,000 of Rubik's cubes so you can rent them like but I will that actually does sound like a fun little project to do for a few weeks to set up a rental business and let AI fully run it
Speaker 4so which which kinds of things and tell me what you have to jump off but which kinds of things are you seeing most in demand kind of through your platforms like in terms of like you mentioned trailers you mentioned a few other things like and I guess why like is it because these things are just not being like why they why is there demand for these things is there no kind of like larger players that are doing this like where's the where's the demand coming from why is it not being served
Speaker 1it's interesting that you mentioned like the larger player thing there because trailers being like the first vertical we started in right is completely saturated by U-Haul in a way right U-Haul has 10 trailers in every city on the planet basically right and yet somehow these guys are setting out and they're winning they're beating one of our customers got an offer from U-Haul like to acquire them like they're beating U-Haul and I think that kind of goes back to what I mentioned before about local matters like having a quality item having a great maintenance setup matters and U-Haul is not executing on that like our larger customers are executing on that they're executing on maintenance at scale on customer support at scale on providing a good experience at scale and U-Haul and the other big providers are not delivering that at all and you know I can imagine it being really hard to pull it off like we heard in Australia U-Haul had two maintenance techs for like the entire east side of Australia or like 5,000 trailers wow I don't know how they even managed getting between other locations at that rate with the amount of trailers we know they have they'd be getting to the trailers like once every four years and not only that but they have a terrible system for tracking how maintenance works and all this other stuff so how are they going to know even when to get to the others one of the things Lockheed does really well is being able to correlate like customer support conversations and issues on rentals and other sensor data to be able to prioritize okay this location needs a tech today and needs a tech yesterday and reordering and shuffling that as conditions change so yeah I think I think the small providers will continue to beat out these larger ones especially the quality they're offering right now that's for sure
Speaker 4that's so interesting it's interesting because you know I think a lot of the conversations that are happening now around AI it feels it feels like we're like on the verge of AGI or ASI or whatever you want to call it where it kind of like AI like self-incursively improves and we reach like this beautiful utopian world and then and then you kind of like you're running this business where like it's a local guy renting some trailers to another you know 20 other local guys and kind of becoming a millionaire off of that and it's just it goes I think so contradictory to what high narrative is right like it's it's like well in theory you should have economies of scale in theory these problems aren't that hard in theory U-Haul should win but you're seeing something different
Speaker 1yeah in practice U-Haul loses every single time and then like reliably at scale U-Haul loses and I'm sure they make lots of money right they're not doing bad but like we moved over a location that was a gas station somewhere in the world that was doing was renting U-Haul trailers out right there U-Haul trailers at the location they swapped it out one of our customers kind of won the location over and they swapped in their trailers for a nail monkey and our trailers at that location made three times the revenue of the U-Haul trailers that previously existed at that location and the guys still did no and the location did less work than they were previously doing where they were having like hand over keys and unlock trailers and check trailers and stuff
Speaker 4and the reason being that you guys provide intelligence you provide analytics you can provide a better system where the owner can just provide a better product and service to the end user
Speaker 1yeah by a mile it's faster it's more convenient it's simpler like in the day where anyone can make anything like anyone can code something together making something simple is harder than ever before in a lot of ways like making something that people can easily use understand is so much harder the amount of A-B testing we do the amount of changes the amount of we talk to end customers and not just the businesses that operate with us the amount we get permission to and then speak to the end customers to go hey what didn't you understand like how could this be made simpler what didn't you get so that we can then spend time just iterating on how that process works and making it simpler like we spend absurd amounts of time making that process simple and and yeah we talk about a lot with our operators like yes Locky's really really convenient and easy for operators to use but even more so it's actually even more convenient for the customer like we just make everything so simple for them and while protecting the operators it's just it's just so much nicer you can extend a booking with three taps you can reschedule the next week in two you can cancel your booking in two if you really want to provided it's in line with the company's policies like all of these things are so simple if you don't know how to tap the extend button you can chat It's the AI bot that, again, won't just do it. Have you ever tried to use any of them? those big companies, AI support chatbots. They go, great, you can contact customer support to extend your booking. It's like, you are customer support. You're the AI customer support bot. Like there's so many things like this whereby, you know, when you really actually execute the tech properly, customers prefer it. And now they will choose operators who run on Locky over in-person operators. Over people who stand their hand over the trade list and they will choose Locky companies.
Speaker 4That's cool. Back to that point of like, you know, U-Haul losing, the local guy winning. That's very different from software. Do you think that's a function of the fact that the physical kind of world of Atoms is so heterogeneous that it's really hard to have one scalable solution in the way that you do with software? You think that's the reason?
Speaker 1They haven't executed it well. Honestly, I think they had such a great opportunity, U-Haul, to really nail this and to keep up with the tech. And I think like a lot of legacy companies have, you know, no or very little interest in maintaining the quality they need to. Like they've built tech. They have tech. It's just terrible. And you ask any customer, I've sat at the front of a gas station and talked to people renting U-Haul trailers and gotten their feedback on it. And it's just hilarious, the differences and the feedback they give. And honestly, I get why it's a really tough thing to execute on. Like rentals are a complicated thing. As I say, Locky has hundreds of states for each item that we kind of dutifully bring back to the happy path time and time and time again. And executing on that without, you know, doing what we do. Like I love standing in nightclubs and learning about the nightclub companies that use us. I do the same for the rental industry. I stand there. I figure out what customers are thinking, what they're not understanding, and we improve it so that it works. I don't think that U-Haul or anyone else like that is executing that at scale.
Speaker 4Yeah. Yeah. That's interesting. That is so interesting. Huh. And besides trailers, I mean, it sounds like you should maybe just go out for trailers. Why are you doing everything? Like, because, you know, these things, they're usually kind of like a power law distribution where like one or two things kind of drive 90% of your revenue. Is that kind of what it is? And if so, then why go after the long tail? Because it feels like you have to do so much work. If you figure if you solve trailers, then like paddle boards are so different. Bikes, rental bikes are sort of power tools. I think you'd be surprised.
Speaker 1I think you'd be surprised how much is actually in common with these things. Like, I think the thing we've solved is renting, or we've solved well, is renting physical goods. That's the hard bit. The taking that process and adapting it to the different industries we're working with has actually been, like, honestly, surprisingly easy to us. Every now and then, there's a few extra things you have to build in to support it. But that kind of customer-centric pickup process, you know, can be very similar across all the industries. And what we've seen is that, you know, people have tried to build automated pickup processes specific for trailers. And it just ends up being more complicated in the end anyway. Like, the thing is, because we've stripped out so much of the chaff, so much of the process, which is, you know, archaic or inconvenient, for the customer, as I say, keep coming back to this, but that bad day, you know, not only does it affect the operator, that bad day metric is one thing going wrong. And that also, so that same bad day metric affects customers. So if it hasn't any customer had a bad day renting one of our items, well, we've failed. We need to improve something. And so because we've simplified that so much, that process can be really easily applied to all the other verticals we're working in. And to be honest, we haven't pushed these other verticals. Like, I've not made a single outbound call to the other verticals that are now using us, right? And they come having tried every other tool that are imaginable, right? Because we're not exactly ranking for, I don't know, golf ball rental, right? They've tried every other purpose-built solution or half-built solution, and even tried building things themselves in a lot of cases. But it turns out that, you know, the process we've got just carries over so seamlessly and so well. They switch up with us, and suddenly I get the emails that say, oh my God, why didn't I do this earlier? It's just throughout all of our reviews, every public review that's been posted, we put it on our site. The thing we get quite, reliably is, holy cow, why didn't I do this sooner?
Speaker 4Hmm, that's cool. But isn't there some, like, again, with all startups, like, kind of, usually startups fail for a lot of reasons, but one of the main reasons is because they kind of don't focus, right? How do you justify kind of not just focusing and just becoming, like, literally maybe the U-Haul, the distributed U-Haul of the world, versus just a platform for rentals, right?
Speaker 1I think that rentals are the future of e-commerce. That's my belief here. That the whole world is going to move towards rentals, as the cost of living changes, as more people want to start their own businesses, as people want to scale those up. Rentals, I think, is the next generation of e-commerce business. And so I think there's going to be a Shopify for rentals, right? And I think that's going to be us. And so that just means executing incredibly well on just general automation for rentals. And there's so much we have yet to build. And there's so much we are building every single week to try and solve more of those edge cases, right? And they are really, as I say, very similar between all the industries. The edge cases we're dealing with now, now we're, you know, a bit of time into this and in time to building are massive, right? They're time. They affect 0.1% of bookings. But they require months of engineering work to solve. But because we've got those base processes down now, we get to sit here and go, okay, how do we solve this edge case that's so painful for operators, so painful for customers that generates so many bad days? How can we solve that seamlessly across all of our verticals? And that's what we get to solve now. And we've started releasing some of those features over the last month or so. And the response from operators has just been, I didn't think this was ever going to be possible. Like, I just accept it that on, one in every 100 bookings or one in every 200 bookings, I was going to have to deal with this. And now I don't.
Speaker 4That's fascinating. You started coding pretty young. I think Henrik asked you about the video game that went viral, right? That you built. Yeah, I did. And so, I mean, going from that to now, what is your setup? Like, are you just running agents 24-7? Do you have other developers? What is that just on the development side and building stuff? How has it changed?
Speaker 1On the development side? Yeah, I do run a fair few agents nowadays, as should everyone, I'm sure. I spend, like, the biggest bottleneck for me with development, which I think probably the interesting thing people talk about these days is, is ensure quality. Because I can code so many features. And, you know, we have a big backlog of features. I can go into Linear and I can assign all of those tickets to agents and have a thousand features built tonight, right? That's not hard. And I tell this to our customers. Sometimes it's, yeah, I can build everything you want. I can build everything that VibeCredit platform has in a day. The problem is, it would work maybe 50% of the time. And that just doesn't, it doesn't work for our customers anymore. That, that, that, oh, it works sometimes isn't what writers are wanting. And so the biggest bottleneck for us, for me specifically, is just quality. So everything we build, we, yeah, we'll code out the basic prototype with AI, of course, and we'll use it to keep tuning things. But I still have to sit there and spend, I mean, an hour on every single feature, just going, okay, well, how does this UI look? Does it, does it meet kind of our requirements? Is it good enough? I mean, I don't know if you saw the drama last week on Twitter with Cloudflare releasing like a completely vibe-coded page for, for their site. But like, the opera on that was crazy. And the opera from our customers would be the same. Like they, they don't want a vibe-coded new feature. They want something that works reliably that we test. We advertise with all of our features. Every time we release a feature, we test it with 10,000 bookings first. We have a couple of customers who asked to kind of run tests with new features on their fleets. We will sit there and run 10,000 bookings with that and figure out, okay, did our automation percentage meaningfully increase or meaningfully decrease by adding this feature? And only after that do we then go, all right, all of you guys you can have it now because it works to scale. Or if it doesn't, we released a feature recently for late, automated late charges, right? Really common feature that's appearing in lots of, yeah, rental software. And, you know, the feature, the feedback we've gotten from people when they've moved to us is they wanted that. And then I asked more about it and they're like, oh yeah, it didn't really work, but I liked the idea of it. And we were like, okay, great. So no one's pulled this off yet. Let's figure out how to do it. We built three versions of it, completely different each of them. Released it, tested it on bookings, watched how it was used. I literally sat on the shoulder of people using it to see what was going wrong and what they were stepping in. And on the third version, only then did we actually see a meaningful change in the amount of automation across bookings. And now it's a really meaningful change. Like any booking that's running overdue, we now have a whole system that seamlessly handles it for both the customer and the operator that deals with recovery, that deals with all the other things that come along with it. And it works. And that's, people move to us and they go, oh yeah, my last rental software had something that did that. Like it kind of, it was just, like I had it on, but like, you know? Yeah. So you're saying the bot
Speaker 4the bottleneck is basically, is it taste or is it kind of like user testing or what exactly would you say?
Speaker 1Taste, quality and user experience, I think is the bottleneck that I see. All three at once. I just, I cannot, I can do some great prompting. I feel like I've gotten pretty good at prompting these days. But at the end of the day, like nothing beats watching a user get frustrated by tapping the screen a hundred times when it doesn't work, they work the way they expected it to. Nothing also beats just seeing an operator. So one of our operators, you know, CD automation run and then go in and make manual changes afterwards. Like that's the most infuriating thing for us. So we track how many manual changes are made to bookings. And when manual changes are being made, we're failing. And so commonly with those late, the late charging as an example, again, they would, yeah, the late charge automation would run and then they'd go make manual changes to the booking anyway. It's like, that's a failure. Like that feature is not doing enough. If they're able to go in and change something manually, we fail. And now we've released it. And like, I think 60% of our customers turn it on like in a week and it reliably gets used. Again, we monitor them, the bad day stuff, those bookings, it's running, customers using it, it's not going wrong. They're not touching, having to touch up the booking manually and it all happens seamlessly. And that's when we know, okay, we've made a meaningful contribution. We've ripped features out of Locky a couple of times now because we've just seen like, it's, yes, it's automated something, but it's just generated manual work for them as well.
Speaker 4Yeah, that makes sense. I mean, this is great. Maybe to like zoom out and to sort of wrap up, you know, you sort of stumbled into this a little bit kind of accidentally in some ways, right? Like your uncle, it was your uncle who asked you to automate the palatable rental. And then I think you've executed this very correctly. Correctly, like frankly, right, that you, I mean, the business, right, talking to customers, understanding what people want, building towards that. But in some ways, you kind of got lucky because like the problem kind of found you, you kind of became known for this thing and people came after you. For entrepreneurs that are building, they're wanting to build today, wanting to, you know, create products and features in a world where kind of anything's possible to create. But at the same time, it feels like everything's a little bit kind of saturated. It feels like there's products for everything. What advice do you have?
Speaker 1Quality. Like, honestly, it's the biggest thing that sets us apart. It's the thing that people go, wow, when they watch the first demo with us. They go through a demo with us and they see something happen. They go, wow, how did that work? Like, and they're just confused by the fact that it, you know, I'm saying Apple on here, but it just works. So, you know, yes, the eight-year-old startup line of like, talk to your customers is so important. But talking to your customers and building what they want first, building what they need is very different. And then building what they need with taste, with quality, with obsession to build something that just is completely unparalleled on user experience. Like that's, our customers will choose us time and time again. Even if someone was to build the exact same platform, right? If I've got it all together today, none of our customers would move because they would, they would look at the quality and they go, yeah, I'm going to stick with the one that just works, right? And it's why we've, we've moved, I think this month alone, we moved six customers over from Vibe Coder Solutions. They built themselves to Locky, right? Something that's in, in general, it should be more feature complete for them. Like it's got exactly what they want. They've coded to build themselves. And yet they're choosing to move to Locky because it works. It's, it's, it's quality, it's tasteful, all that sort of stuff. So I think for new people building, like, yeah, trying to understand what the customers want is super important. But then you're executing on in a way that no one else can because you know how to build. Yeah. Anyone can build these days. You said it very well. Anyone and everyone can build. Very few people can execute on taste and quality still. And that's why engineers' salaries are still going up, right? Like that's why software engineers are not getting cheaper by the month. They seem to be getting more expensive from my latest hiring conversations. Like, I think, I think if, if I could do it all at this point, like engineers' salaries would be through the floor, right? I'd like that. It'd be so much cheaper to hire some engineers to come work for us. But instead, like what I'm finding is just the engineers who I actually want, like the ones that are executing so well, so expensive, so expensive.
Speaker 4So that money we gave you is going to good use. Yeah, yeah, exactly. That's awesome. Now, Bodhi, this is great, man. Appreciate your time. I think what you're building is incredible. And I think it's a very interesting business that I think, yes, well, definitely has the potential to be the next, the next shop. The next Shopify. So congrats on pursuing that and building a great company.
Speaker 1We certainly believe in it. It's a, it's been a very fun ride and it's, I mean, I'm not sleeping at all. It seems to be getting more and more fun by the week.
Speaker 5All right, man. Appreciate it. Thank you. Thank you for tuning in to Techmates. If you enjoyed this episode, be sure to subscribe, leave a review and share it with friends. We'll be back soon with more stories of Kiwi and Aussie founders reshaping the future and disrupting Down Under. Until next time. Keep dreaming big. and daring to disrupt.
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