Category Archives: DMi

2 Reasons For Completing A Degree

I’ve always been a believer in “attitude and aptitude” when employing but I also recognize that those two attributes can’t be measured when culling from opening letters and resumes. Sometimes having a degree and even a post graduate degree can be the difference.

It was with this that I undertook a Masters post graduate degree as a mature age student at Monash University whilst being CEO of Digital Motorworks during a growth period.

Yes it was hard work.

No it hasn’t made a material difference to what I’m doing (that I’m aware of).

Yes it was worthwhile.

There were two main reasons I completed a Masters degree as a mature age student:

1. Insurance. What if I was in a competitive process for a job that I wanted/needed and I didn’t get past the resume cull because I had no tertiary qualifications? We all get told that loading up on super, life insurance, income protection and an up to date will is a prudent personal financial strategy. I believe you should add education to that list to help with “job insurance” if you are a white collar worker.

2. You don’t know what you don’t know. What if you actually learn something that could help you? I am tipping there is some value or there are a lot of very silly people in high paying professions. It was certainly good for me to get an academic spin on the practical stuff I had learnt and was putting into practice.
Now before you point out all the successful people who don’t have degrees remember the first point above – insurance. Very very few of us are college drop outs and go on to found a Microsoft, Facebook, Oracle or Dell and become billionaires (yes they were all drop outs).

Those guys don’t need life insurance or income protection either.

Great Lesson For A Startup – Realising The Real Value & Finding Your Core

Sometimes a company’s real value is not what their core offering is. Here is the story of such company that I was involved with and was fortunate to find their niche.

In the mid 90’s there was a bit of a fad in the US automotive industry around touch screen kiosks to showcase new models and to show new and used cars they have for sale. This was particularly good for dealers with multiple sites and to place these kiosks at shopping Centres, etc. The downside with this was that they were cumbersome to update meaning as soon as they were updated they were out of date.

“it’s all about the data”

Two guys out of Austin, Texas built on the concept and made their kiosk offering Internet connected, dialing into the car dealer’s computer system to retrieve the inventory details so that no matter where the kiosks were located they were automatically updated daily. On top of this, it simultaneously gave the car dealer a seamless and integrated Internet strategy for their web site. This was cutting edge stuff in 1995 and Digital Motorworks Inc (DMI) was born.
Their business model revolved around selling the Internet kiosk package to dealers, particularly targeting the big dealer groups who would pay monthly fees on a per kiosk and/or website basis. Not a bad model in theory especially considering there were over 20,000 car dealers in the US. By 1997 they were finding it difficult to get cut through at a dealer level “knocking on doors” and this was slowing growth (and affecting cash flow). They were doing it tough after such a promising start.

…the kiosk software was not their most valuable asset; it was in fact the software process and infrastructure they had created to automatically extract…

Through 1998 I was busy implementing the same business model for Reynolds in Australia and caught up with the DMI guys at the National Automobiles Dealers Association (NADA) conference early on in 1999. The change in their attitude from the last time I had met them was immediately noticeable and I quickly learnt why – “it’s all about the data”.

What they had discovered over the previous 18 months was that the kiosk software was not their most valuable asset; it was in fact the software process and infrastructure they had created to automatically extract the vehicle information from the dealer’s computer systems. So much so that they were no longer a touch screen kiosk provider and were now a data aggregation company! And it totally transformed the business.
They signed a deal with to provide them with the vehicle data from all of their thousands of dealers on a nightly basis. They went from having to knock on dealer’s doors to make a ~$500 per month kiosk sale to having dealer orders emailed to them at recurring ~$100 per month – an immediate 5,000 dealers at $100 per month is a lot of touch screen kiosk sales in one hit!

Fast forward 20 years and DMI today extracts, normalises and aggregates vehicle, sales, customer, parts & service data from over 25,000 dealerships across North America for a range of different clients as a fully owned subsidiary of CDK Global (formally ADP Dealer Services).

Without realising their real value and making it their core offering, they certainly wouldn’t be around today selling touch screen kiosks.

An Exit Strategy Isn’t Bad For A Start-Up


Mark Cuban’s “12 Rules for Startups” has number 1 as “Don’t start a company unless it’s an obsession” and number 2 as “If you have an exit strategy, it’s not an obsession“.

I get his point but I think it is directly related to “cashing in” as opposed to protecting your interests, especially when you have partners involved.

I believe that when you start a company it invariably means at some point there will be an end; if it’s not the end of the company it may be the end of your involvement with the company which can take on a number of different possibilities and all necessitate an exit strategy to be considered from the start.

“We were building a technology company and had a choice to build (and own) the IP/technology ourselves with 100% of the business or license the technology…..”

In 1999 I was involved in my first start-up and quickly learnt about the importance of thinking ahead to all possibilities around an exit strategy. It was with a colleague from Reynolds at this time when we went to work on a plan to fill a niche not being filled in the market.

Being from a technical background I was all set to develop the required technology to get us going when a call out of the blue changed our direction and with time to market being defined as an important factor for us, we pivoted and went into partnership with a US company licensing their technology.

Herein started the lesson I learnt. We were building a technology company and had a choice to build (and own) the IP/technology ourselves with 100% of the business or license the technology along with giving up half the company. With a very large, multi million dollar deal at our fingertips, we chose the option that assured us the immediate contract by cutting our time to market and providing a comfort blanket to our prospective client.

“Fast forward two years and the business was traveling very well, growing, very profitable and serving some of Australia’s biggest media players…..”

Fast forward two years and the business was traveling very well, growing, very profitable and serving some of Australia’s biggest media players. We started to become an attractive acquisition target for a few companies in the midst of the dot-com boom but had one missing ingredient – our own IP driving the core of the business and this severely limited our options to be acquired. We did end up getting acquired at this time – by the US company who owned the IP and half of the company already.

What did we learn? You must always think of the exit strategy from the start. This includes IP, technology and a shareholders agreement. In this case it was the technology that drove the company. We had quickly built a business that was profitable and growing but was unattractive to an acquirer which limited our exit strategies. In retrospect we should have had the exit strategy defined in our agreements with the US company which would have removed all the angst about thinking we were getting done over; whether we were or weren’t was another matter.

Would we have made the same decision again? Most probably. Given the choice of time to market now with a near guaranteed contract immediately versus 6 months development before trying to secure business whilst having a second mortgage on my house and second child on the way with no money coming through the door……..