15th November, 2018
Redbubble is one of Australia’s eCommerce success stories. It’s long been synonymous with co-founder and CEO Martin Hosking (who will be speaking at the Startup Grind APAC Conference in December) – but his stepping down earlier this year led to one question: why now?
We sat down with Hosking to chat about his decision to hand over to Redbubble’s Chief Operating Officer, Barry Newstead, what Hosking’s up to now, and his outlook for tech plays in Australia.
The Pulse: Stepping down after eight-or-so years is a big decision. Can you talk me through why you made it?
Martin: I’d always seen the organisation as independent of me, so I’d set it up with a governance structure which allowed for that.
For example, we had an independent board, always audited the numbers – I’d never seen it as a family company.
With that in mind, me or any other individual in the company isn’t unique. It’s the company that was set up for what we talked about.
That means the company has an ability to renew.
While the specific timing of my stepping down wasn’t anticipated early on, the recognition that I would be stepping down at some stage was anticipated.
The Pulse: So what prompted the decision at that particular moment?
Martin: I wanted to see two things:
I wanted to be ready, and then I wanted to make sure somebody was ready to step up.
The fact we had somebody ready to step up (Barry Newstead) was really, for my mind, a critical factor.
There’s a period when a highly capable person is ready and has the desire to do it. You may lose that person if you delay for too long – we’ve seen that in the political sphere in Australia.
The final timing was a recognition that Barry was ready to step up and, frankly, would be a better CEO than I would be, going forward.
There was no particular moment, but I think there’s a skillset you bring to a company as a founder and CEO which can be incredibly helpful. As the company matures, your skillset will mature with it, but there may be a time where you need to have a different level of ability and different focus.
As the company was maturing, I realised that was occurring. I was no longer going to be effective as CEO as Barry could be.
The Pulse: That’s interesting because, in startup-land, there can be a lot of traction gained by cultivating a founder as the company’s public face and there’s upsides and downsides to that – think about Elon Musk…
Martin: I think where the founders’ ego and abilities, as great as both may be, dominate the company, then you have the opportunity for significant success. Ultimately it will become a restriction on the company.
If you take somebody like Steve Jobs, in the early phase he was like that. As he came back into Apple, he was much more concerned that the company had an independent and strong governance structure.
The company’s gone from strength to strength since he left the company. That’s him gaining wisdom along the way.
The Pulse: When you stepped down, did you feel relieved or was it a bit difficult to let go of the reins of something you’d built?
Martin: It was more of a difficult transition for those around me.
The board needs to go through a process and the other members of the executive need to go through a process.
Typically, with a founder stepping down there is an inevitable focus on the overlap between the founder and the company itself.
Even though I was aware that the overlap wasn’t as great as people thought it was, it was still there in people’s minds.
There was a period, longer than I had anticipated, of working through those issues with the board, the senior executive and external stakeholders such as shareholders.
That was the most challenging aspect of it.
Personally, I think I found bits of it challenging but it hasn’t been so much relief as acceptance of the nature of that reality.
The Pulse: You said there was a perception issue where people think of the company as the founder, but you remain on the board as a non-executive director and you’ve held onto your shares. Why do that if you’re concerned by the perception issue?
Martin: I chose to do so because I think there is that issue. As a company going through a moment of transition, I think it was helpful for external shareholders and the company itself to realise there was an anchor of stability which connects the company to its past.
That being said, I think it’s really incumbent on me to be incredibly careful about how I play that role.
I’m not going to play the “founder card” on the board.
We’ve also got an independent chair and I’m just another director – which means I have the obligation and responsibilities of any director, but I won’t act like I have more than those responsibilities.
The fact my shares aren’t in play is also important – particularly right now in Australia, having strong shareholders with a long-term view about the future of the company is important. Particularly for companies which are still in the early-stage growth mode.
I think the Australian market still rewards short-termism and can overreact on short-term issues.
So having a parcel, just below 20 percent of the shares, which are held for the longer term is good. I think we’ve also attracted our other shareholders with that perspective as well.
The Australian share market right now is still adapting to how they think about growth stocks and growth tech stocks. It’s important to me that we create an environment where growth stocks and growth technology stocks can play a role.
For that to happen, we need good shareholders. I hope to be one of those good shareholders.
The Pulse: So, what are you up to these days?
Martin: I’ve been working with my hands on projects we’ve been doing on the house in the Dandenong Ranges. Just being physical and being out in nature is an endlessly soothing, focussing event.
It’s nice to not worry about what’s happening with the emails in the morning, not having the meetings. For me it’s been far closer to liberating than frustrating.
I’ve enjoyed the process of being a little bit free from the burdens and responsibilities of being a busy executive.
The Pulse: So now you’re literally building stuff?
Martin: Having that focus on what you’re doing, not looking ahead more than a few hours – those are very narrow and soothing.
Founders start things, typically, because they like to build things.
There’s a joy in just building things, even if they’re just simple things.
You can hear more from Martin and his journey post-Redbubble at Startup Grind on December 6–7, proudly sponsored by MYOB.