Edited transcript of #25 Practical Founder Podcast interview with  Craig Letton, founder and CEO of MRM Global

Greg Head: And we’re live with Craig Letton, CEO and founder of MRM Global. Hi, Craig. Welcome to the Practical Founders podcast. 

Craig Letton: Hey, Greg. Thanks for having me on.

Greg Head: Yeah, we’ve talked several times. The first time it was a desperate moment for you. You had some product crisis and a product team crisis and you’re looking for a little perspective and I gave you a perspective. And it’s an incredible journey. And every time we chat, your business is growing and you’re making it through it. But it’s been a long, practical founder journey and I’m excited to hear and have you share the story with practical founders. Let’s just start with what is MRM Global and we’ll go through the details of where you are now.

Craig Letton: Sure. So MRM Global is an international marketing technology company. We work primarily in the alcoholic drinks vertical, so most of our clients are large spirits companies, wine companies, beer companies, or wholesalers in that industry. And essentially what we do is we have a technology platform called Brand Creator and the sales reps of these large companies who are selling into restaurants, bars, hotels, and retailers, they use our technology to create customized marketing materials for their customers that drive the sales of their brands. And we do that now in over 35 countries. We’ve got 16 big branded customers that names that you’ll know are big blue chip clients. We’ve got 65 people, and this year we’ll turn over just shy of £5 million, which is about $6 million.

Greg Head: These days you’re not based in the US. Tell us about where you’re based.

Craig Letton: Yeah, that’s right. So I actually went to high school in the US, so I do have a bit of a weird transatlantic accent, but yeah, we’re based in Scotland, so we’re based in Edinburgh, the capital of Scotland, and a bit of a tech hub. But we have people all over the world, so we have people in Australia, we have people in the US and we operate right around the world. But yeah, primarily based out of the UK.

Greg Head: So did you come out of this industry? You were in the drinks industry and there are obviously tens of thousands of people that are calling on all the restaurants and the liquor and spirits industry is massive around the world. It’s a totally global industry. Did you come out of that industry to discover this problem?

Craig Letton: Yeah, sort of. Not entirely out of the drinks industry, but out of sort of consumer goods industry and specifically within hospitality? So I actually started my career at Kraft Foods, a gig american company. Yeah. And I did a graduate scheme there, after I came out of university. As part of that graduate scheme. I did eight different placements around their business. One of those was in their hospitality division. So I was selling coffee to restaurants, hotels, etc. and that’s actually where I kind of first identified this problem that we now solve. And so I experienced that problem firsthand as a sales rep. I then moved into a marketing placement where I experienced the same problem but from a marketing perspective. So yeah, I have firsthand experience of the problem that we solve that eventually allowed me to build a solution to solve that.

Greg Head: How old were you when you were doing that? It sounds like you were pretty young, just out of university.

Craig Letton: Yeah, I was 24, so in my early twenties when I was doing that job, I then took another move and went to work for Mars Foods. So another big US company. At that point, just kind of bad luck really. I ended up finding myself running the biggest account in their business, so I was managing the Tesco account, which is like the Walmart of the UK, selling about £40 million worth of what you guys would call candy to the biggest UK retailer at the age of 25. So that was pretty intense. We would call it sweets. So it was things like Skittles, Starburst, and Wrigley’s chewing gum. Yeah, I mean it was an amazing experience. I learned a ton, had amazing training, and brilliant people, but I did get to a point where I was just really, really burnt out from doing that job. It was extremely difficult.

Greg Head: So that wasn’t frontline sales calling on Tesco stores, you know, running around as the route representative. You were dealing with Tesco headquarters.

Craig Letton: Head office, Yeah.

Greg Head: Big pricing and big arrangements and volume buys.

Craig Letton: Yeah. When I was at Kraft I was dealing with some small accounts, you know, about 6 million of sales and then I kind of jumped into Tesco. So I literally went from one extreme to the other and I was dealing with procurement, supply chain, the buying team, managing promotions, and pricing. So I really kind of cut my teeth there from a sales perspective.

Greg Head: Are you a sales guy? You’re so you’re not a coder, you’re not a technical guy.

Craig Letton: Yeah.

Greg Head: Do you see yourself as a salesperson?

Craig Letton: Yeah, I think so. That’s kind of where I started my career. That’s probably where my greatest strength is, which is kind of unusual because I’m an introvert. I’m probably the most atypical salesperson you could meet. I’ve definitely honed that skill. I am completely non-technical. I could not I can’t write a line of code. So which is quite unusual for a CEO of a tech company.

Greg Head: So what’s the magic trick of an introverted salesperson that obviously got promoted? Is it working with people to solve real problems and come up with solutions? And, you know, the problem-solving side of sales as opposed to the runaround, talking to as many people as possible, shaking as many hands, the extroverted side of sales.

Craig Letton: Yeah. I mean, I would probably be pretty bad at that. What I’m good at is kind of building kind of deep and strong relationships with clients and then working very closely with them to solve their problems, you know, really taking a very consultative approach. And I think the benefit of being an introvert is I don’t feel that overwhelming need to speak. So I’m pretty good at listening and I ask pretty decent questions so I can figure out what’s going on. You know, I end up feeling like I’m working for our customers in their business. I get myself in their shoes and we work really close. So I’ve always enjoyed that aspect of it. And in sales, you’re on the front line, right? And it gives you the ability to make a big impact on the business quickly, which I really liked about the business, it’s not a support function. You’re at the coalface.

Greg Head: So did Mars have the problem that you’re working on now, the customized marketing collateral for the front line sales reps?

Craig Letton: Not so much Mars, but Kraft did. So they had a big food service team and the problem that the sales reps had was that they needed to service a large number of outlets with marketing materials that were branded, so they needed to be compliant with the brand guidelines. They needed to be on brand as such, but they also need to be customized for the local outlet. So it could be Greg’s pub or Greg’s hotel or whatever.

Greg Head: Is this the countertop display, the end cap display, the signage in the store, and all of that kind of thing?

Craig Letton: Yeah. It’s a whole raft of different promotional items, but generally printed items promoted, sort of physical items. And it’s really, it could be called point of purchase or point of sale. And its job of it is to influence a consumer’s purchasing behavior at the point of sale. So to get you to buy their product over someone else’s and capture their attention. Particularly in the drinks industry, it’s absolutely critical whether you’re in a retail store or you’re in a bar, you know, you’ve got a lot of choices. So how does a brand owner convince you to buy beer instead of wine? And then how do they get you to buy their brand of beer instead of someone else’s? And a lot of it’s done through marketing.

Greg Head: How many sales reps are calling on bars and restaurants and hospitality and all of this where these point of purchase, point of sale displays, and materials would have is it tens of thousands of repetitious crawling all over the world?

Craig Letton: Yeah, for sure. Yeah. I mean, just in the US alone you’re probably looking at probably over 100,000 sales reps.

Greg Head: This is very narrow, but you get down there, and then there are 100,000 reps in the US and their most critical thing to influence sell-through is these point-of-purchase materials, which I’m sure was a nightmare to make anything custom sales reps on the front line and marketing on the back end. I’m sure they were not getting what they wanted and it was expensive.

Craig Letton: Yeah. That problem that I experience was that if I wanted to create something customized for a small cafe, let’s say it’s a menu or a poster or something simple, I would have to go and brief a design agency. I’d have to go back, Oh my gosh, for that designer for weeks or months. I then have to get approval from the customer, and the brand team, and then eventually send it to the printer. It could take me weeks, if not months, to get something really basic done. And it was just a nightmare. And then when I went into the marketing side, I saw the flip side of it and I saw sales reps basically bastardize the brand. Right? Frankenstein-ing in these brands.

Greg Head: Yes. Right.

Craig Letton: And I was like, Oh, God. So, you know, I saw an opportunity to really make this process a lot quicker, a lot easier, a lot cheaper. And the solution that I came up with was a technology solution. So with our platform, basically we put that in the hands of the sales reps and it allows their sales reps to create these marketing materials on the fly. Actually, as part of their sales call, they can sit down with a customer and build these menus and marketing materials with the customer collaboratively they can pull from a library of assets. We’ve all got the branded assets, we’ve got the product imagery, and we’ve got the product descriptions. So everything’s coming down has been approved by the brands and is compliant and then they can build these items in a way that’s legally compliant, brand compliant, but also customized so that it’s relevant for the outlet. And we’ve proven by selling it to some of the biggest companies in the world that that is a better way to do it. But in some markets like the US, the current state of play is that it’s done manually. It’s still done by designers, it’s not using technology. So for us, the US market’s a huge area of opportunity.

Greg Head: Yeah, there’s still in every industry you go two steps in, and there’s so much manual work still being done, very inefficient, and ineffective and sales reps are still calling on restaurants. That’s not going away. It’s not robots or emails that are solving the problem. Craig, did you just quit your job to start and find a friend to code this thing and then start selling it? Or how did this get started?

Craig Letton: So my story is quite unusual. So yeah, I did quit my job. I was like a shell of a human being from burnout. So I actually left and my wife and I went to Argentina for three months and got my head straight. And yeah, coming back from there I needed a job. And my parents who had set up their own business ten years prior were looking to retire so that they could sail around the world. So really, just by coincidence, I need a job, they need someone to run the business. So at the age of 26, I took over the business with no prior management experience. I’ve never managed a single person. That was in Scotland, just in a small town in the countryside. And at that point the business was essentially a print business with a little bit of kind of web platforms, I guess you could call it probably, more like prototypes or proofs of concepts that they were kind of playing around with and they’d taken the business from zero to just under £1,000,000. They had some good customers and big-name brands. Yeah, there was a bit of local business, but they were actually working internationally. They were working in France, Spain, Italy, and right across the UK.

Craig Letton: They had some big customers like L’Oreal and Microsoft. So they’d really taken the business a long way. But when I came in they were basically kind of doing everything for everyone. They had bills to pay, debts to pay off, and big business equipment that was on loan. Yeah, you do what you got to do, right? So when I came in, it was a little bit of everything for everyone. There was no kind of necessary focus and there were large parts of the business that actually were not profitable at all. In fact, we were losing money on some accounts. And just by misfortune really, we lost 30% of the business pretty much overnight within my first month. Which sucked. We lost a couple of accounts in Europe. And so my first task really as a manager was to make redundancies, which I’d obviously never done before. And for the next two years, it was very much like, I need to keep this business alive. I was managing decline and trying to get the business to profitability, which was a challenge. I think when survival is on the line and you just got to do what you go do, you make the tough decisions and you get stuff done right.

Greg Head: Did you find yourself two years in saying, What did I do? I’m equally burned out. But no, I don’t have any money.

Craig Letton: Yeah, I’ve definitely had plenty of little burnouts in my last decade running this business. But I think the difference is when you’re an entrepreneur, you have control over it. You don’t have a boss breathing down your neck. At the end of the day, I determine my destiny. So I feel, you know, I think stress often comes from a lack of feeling, of loss of control, whereas I have full control over this so I can solve the problems myself and with my team. So no, I don’t actually find it too stressful, as crazy as that sounds, considering what we’ve been through.

Greg Head: Yeah, I totally hear that. Which means you’re an entrepreneur. This is the game you want to play.

Craig Letton: It is, yeah.

Greg Head: So did you get that business moving and uprighted, And how did you transition into the business that you have now?

Craig Letton: So I basically spent two years kind of, I guess, kind of fixing the business. And a large part of that was taking the business from what I just call the shotgun strategy, which was kind of just blasting white and fire and taking it to the sniper rifle strategy, which is where I basically closed off all the unprofitable business. I either increased the prices to a point where it was profitable and they left or stayed, or I just shut down those accounts. And what that meant is we ended up with a business that was actually highly profitable, but much, much smaller than it started with. So I think we went from £850000 to £450000 and from 12 people to seven people. So it was a very small business by that point, but profitable. And I actually said to my parents, who owned the whole business at that point and were not involved at all, they were literally on their boat in the ocean somewhere. And I said to them, You guys should sell this business while there’s something left to sell, maybe you will recoup your initial investment. And we tried to sell it and we failed. And so I said to them, Look, I’ll buy it. I’ll take a loan from the bank. We’ll use some of the money that we’ve created in the business to be profitable, and I will buy out your shares in the business.

Greg Head: And how did that go?

Craig Letton: It was the most difficult thing I’ve ever done in my life. It was very, very difficult. I won’t go into too many details, but for anyone that started their own business, it’s like having a baby, right? Right. And I was essentially saying to my parents, I want to buy your baby and do something completely different with it than you ever imagined. So, yeah, some tough conversations. But you know what? We got it over the line and it gave me the freedom to do what I wanted with the business, which was to take it in a whole new direction.

Greg Head: Did you know you wanted to aim this printing business at that problem that you had discovered in the beverage industry and the sales reps?

Craig Letton: Yeah, no, I did, because I’d been working with these drinks clients kind of as their sort of account manager. And I had shut down all the parts of the business. So all that was left was the drinks business and a business with L’Oreal. That was it. That was left. And personally, I enjoyed the drinks business. I like the people. I like the brands I like drinking. I’ve got plenty of experience. And I noticed that what we were doing for them added a huge amount of value. It genuinely solved a big problem for them, and I could relate to that problem because I had experienced it myself and we had customers saying to us, We love this, it’s great. They were helping us build the product out and the sort of little glimmer of light that I saw at that point. And it’s worth mentioning around this point, I was actually looking to leave. I had three interviews with other companies because I was like, this business is toast. I had an Excel spreadsheet on the computer

Greg Head: And what year was that?

Craig Letton: As 2014. So I actually even had the plan to liquidate the business at that point just to recoup as much as I could. So we were that was like rock bottom. But we had a little glimmer of light because one of the biggest drinks companies in the world was saying to us, guys, we love what you’re doing here and we need this product globally. So between the customers that we had and this new customer saying, Look, we want this, I could see that there was the demand to solve this problem, I could see that it could be scaled globally. The challenge was that the product that we had in the business at the time was not built to scale. So every time we took on a new customer, we had to build a new instance of it.

Greg Head: So there was a little software interface for this printing business that was a front end.

Craig Letton: There was. So it was actually a kind of a bit of software that my father had. It was his idea. Yeah, I’m not going to take credit for it. It was essentially called a wine listing tool, so essentially allowed sales reps in the wine distribution business to create wine lists online. He built that tool using an agency out in India, and it worked. It did solve the problem. It’s clunky, it fell over quite a lot. But there were two main problems with it. We couldn’t replicate it quickly. So every time we wanted to bring on another customer, we had to spend six months building it a bunch of cash. And it was also built using Flash, which is a bit of a problem because all of our customers move to iPad and Flash doesn’t work with Apple products. So we had no choice that if we wanted to move forward, we had to rebuild the platform.

Greg Head: Did you call it MRM Global? And you say we’re going to be in the drinks industry doing customized printing, we’re going to build an app and we’re going to sell to the biggest companies in consumer products.

Craig Letton: Yeah, I did. Yes. I did rename the product. I did rename the company. I decided to build a software product. And I wanted to do it in Edinburgh. I didn’t want to do it in India using an agency. I wanted to do it with our own team, our own people. I’d never built a software product before. So I basically got in touch with some people that have sort of learned some of the basics. They put me in contact with a brilliant CTO and we built this product from his kitchen table. It was literally a drawing on the kitchen table and we were able to use feedback from our existing users on the legacy product and then input from the new customers as well as a bit of kind of my own experience to basically sketch out the wireframes for this product. And we were testing this with users from the very first stage, literally, those drawings that we were actually showing them to sales reps and saying, Look, how does this work? What do you think of this? And then we built this product out. So we actually took an office in a tech incubator in Edinburgh. So that was about an hour away from where we were based. I knew that we couldn’t hire engineers where we were, so I open a new office in a tech incubator, hired a couple of engineers, and started building this product using the latest technology, which was amazing. So we actually able to build it pretty quickly. But that was proper scrappy, you know, we started in a co-working space and then took a slightly bigger space and I think every 3 to 6 months we were sort of moving into a bigger office and seeing how many people we could cram in there. I was taking phone calls and like the fire escape, it was crazy.

Greg Head: How did you fund the engineers?

Craig Letton: Yeah, good question. So two ways. One was from profit from the legacy business. So we had this beautiful part of our business that was profitable. And I also took on a really crazy project that was totally nonstrategic with a very large luxury jewelry company, but I managed to outsource it. We didn’t really have to do a huge amount of work and it made a ton of money. So I was able to use the profits from that business to fund the development of the app and I was able to double my money by taking by applying for government grants. So the Scottish Government in particular is very good at funding small businesses, particularly if they’re kind of innovating if they’re doing R&D, if they’re increasing employee headcount and/or internationalizing. We were doing all of those. So we actually were fortunate to receive government grant things, grants where if I spent a pound they would give me another pound on top once I’d spent it. So basically profit and grants were how we funded it.

Greg Head: Yes. So that was about 2016? You were kind of underway with your product?

Craig Letton: Yeah, we were really kind of hard at it building the product. And in 2017 I made a pretty big decision. So at that point, we were still printing stuff in our own production house.

Greg Head: So you made the software for your own printing, correct?

Craig Letton: Yes. Still, at that point. But I kind of realized that that wasn’t sustainable. At that point, we were starting to trade across Europe, so we’d won European deals with two different customers. I think we were in 18 different countries and it just didn’t make sense for us to continue shipping products from the UK. What I also realized was that I didn’t want to run a print business. Firstly, I had really no interest in it. I didn’t really want to run a production business. We were it was a very small setup. We had very, very small, and I went to visit a couple of other printers that were like the Willy Wonka Chocolate Factory of printing. I was like, Holy smokes, this is how they do it. So I was like, I compared to at the time, it was like, Man United versus this tiny little team, Alloa Athletic. And I was like, We’ve got no hope in this print world, right? Super commoditized requires massive capital investment and scale. And I had no interest in it. So you either have to be massive or very specialized. You were neither. So I actually took the decision to sell all the print equipment and shut down the production facility and move our office so that we just were purely a technology company from that point forward.

Greg Head: And did you have enough revenue to sustain the small team and yourself as kind of a software front-end company?

Craig Letton: Just about. Just about. Yeah. So I got very good at running it to break even. So I knew what the break-even number was every single month. And you were we needed to get to, to pay our bills. It was, it was hairy. We ran our cash flow very tight and across that period of 2017, 2018, and 2019, we grew significantly because we were winning new contracts all the time. We won a European deal with Bacardi. Then we did another European deal with Diageo. Carlsberg, Ricard. It just snowballed.

Greg Head: We kind of skipped over this. We just started winning deals. This is the magic trick of the growth game, right? Product is hard, but you can build product, you can do it over and over again. And getting deals, especially with large global companies when you’re very small and in Edinburgh. And how did you do that, Craig? How did you get large deals? They didn’t come to your website, click and buy. Were you calling on them and networking to meet these people and then you just spoke their language, described the problem they had and they said, I have that problem. How did you do that? How did you get these deals?

Craig Letton: I need to get my dad some credit because he did the first couple of deals with that old product. He came up with the idea he sold to Bacardi UK and a couple of other clients, so he kind of got the ball rolling. And then I really built upon that. And what you tend to find is that if you can get just one deal with a big name, you can then go to someone else and say, Oh, we work with these guys and you’ve got instant credibility. So it still wasn’t easy, but I was able to kind of build upon that success. And I had been on their side of the fence, right? I’d worked for a big brand, I’d worked in sales, and I had worked in marketing. I knew the language, I knew what roles our target kind of buyers would be in. I understood the problem, and I wouldn’t say that it made it easy. I mean, I had to be incredibly persistent, but that really kind of went in my favor. I think one of the big benefits in terms of specifically focusing on one vertical as we did, where we literally shut off everything and went straight into just purely into drinks, was that you get this kind of snowball effect where you get referrals. So almost all of our new business came from either referrals or me kind of cold calling, essentially, and people move around, right? So someone would use our product at one customer, love it, go to another competitor, and say, Guys, we should be using this. And before you know it, you’re into another customer or another country. And again, we were able to grow rapidly because it spread internationally. All these companies are international. You know, if the guys in the UK love it, they tell their French colleagues, Boom, you’re in France and before you know it, you’re off and running. So you can be very efficient with your resources and create a lot of leverage by focusing on one vertical.

Greg Head: That should be printed in the sky, the billboard In every tech ecosystem: You can be very efficient to find customers and solve problems when you focus on one vertical.

Craig Letton: There are some adjacent verticals that we’re looking at as well that we haven’t even touched yet. So there are things like food service desserts, hot drinks, and even cannabis.

Greg Head: So, Craig, I’m imagining you in Edinburgh, these workspaces, and you’re kind of expanding your office and, and there are some cool software people there that are working on some they’re getting funding and the whole ecosystem dance. And then you say, I’m working on this, for the drinks industry. We solve this very specific problem. We work with printers, we do this customized point-of-sale printing software that helps front-line sales reps do this. A very specific problem. Did people look at you sideways like that strange, or were you one of the cool kids in the tech ecosystem there?

Craig Letton: So yeah, I definitely felt like a bit of a black sheep. I felt like me and my team were a bit of an oddity within this tech incubator, which was brilliant, you know, an absolutely brilliant place to be. And a lot of the people were very helpful and very supportive, but we were definitely a bit of an oddity–because we weren’t funded. I think we were one of the very few companies that were bootstrapping. We were also very, I don’t know, businessy, which sounds ridiculous, but my background was from a big business, right? I didn’t want to have a startup, I wanted to have a big business. So I was like, Let’s get through this startup phase as quickly as we can. Let’s get out of this incubator and get into our own office. So I didn’t really sort of dwell on the kind of niceties. So to give you an analogy, there was a lot of ping-pong going on in this incubator. I never played a single game of ping pong. I was the first person in that office, the last person out. I had an hour-and-a-half commute each way. You know, as I said to the guys, we’re not here to play ping-pong. We’re here to grow this business, scale it internationally, and get the hell out of here, you know? So I think it was it was very helpful for where we were at that time, but I definitely felt like we were a bit different. And one of the big differences was, was the fact that we were focused on selling. You know, we were obviously building a product, but we were building that product to go sell it.

Greg Head: And just selling as in pitching, but to go get a deal then fulfill on that deal. Go get revenue.

Craig Letton: Yes. Absolutely. Yeah. So that’s the kind of way that we’ve always run the business and it worked, right? We were picking up a ton of business in 2019. We doubled it in a year, both in headcount and revenue. But at that point, our cash flow was getting stretched well beyond its capability. We already had an invoice financing set up with the bank that allowed it us to increase our cash flow. But even with that, we were stretching it to the point of breaking.

Greg Head: And is that because you would sell something and these big corporates would pay you either on their terms very late or something, or you had to sell something and you only got paid when the orders, the print orders came through?

Craig Letton: Yeah, a bit of both. So the first thing was that these if you want to do big deals with big companies, the lead time is very, very long. And it can be years in the making. So what that means is you have to invest upfront in staff or sales costs, travel costs, etc. And then you’ve got an implementation time, maybe three months. So it could be a very long time to start getting a return on that investment. And the second piece is that, yeah, they tend to pay on 60 to 90 days and that’s after you’ve given them the invoice and after they administer it. So you could be looking at 120 or 180 days to get paid. So the upside is you’ve got these blue chip customers that are not going to go bust. So the bank will fund it, but you’ve got these long lead times. You kind of have to invest ahead of the curve, you know, probably 6 to 9 months ahead of the curve, which is quite difficult.

Greg Head: So what was a typical deal? Was this a couple hundred thousand pounds per year and it was software revenue or was it print pass-through transaction revenue? What were you selling?

Craig Letton: Yeah, So so I mean, at the start, these deals were in the tens of thousands. A big one might have been 100,000. You know, in 2017 we did a deal that was about a million. And, you know, it was a global deal, 26 countries, roughly a million in spending. And now we’re doing deals that are ten tens of millions, potentially. But I think that something that’s important is that you can’t just go in there and smash out a 10 million deal. And they won, Right? You’ve got to get those 50,000 ones then and work your way up. And, you know, I’ve learned a huge amount from every single deal we’ve done. And we just take that best practice and roll it into the next one and the next one is bigger. And I think the great thing about this is when we did a deal with one of these multinationals, it spread. So you might do a deal that’s, I don’t know, 100,000 with a UK company, but then it spreads to France, Spain, Germany, America, and so on, and the deals just get bigger and bigger as long as you provide a good service and they love your product.

Greg Head: Is the business model that you get paid when a sales rep orders printed materials, goes through your system, a local big printer that you’ve already arranged takes the order and makes that and you get a piece of that? Or is it some more recurring SAS revenues and you don’t get a piece of the pass-through? It’s a little bit like a marketplace, right, with this custom solution.

Craig Letton: Yeah, you’re right. So typically we’ll have some service revenue in there, so probably about 5 to 10% of our revenue services and that’s mostly implementation costs upfront. Then we’ve got about roughly 20 to 30% license fees. So those are kind of monthly or annual license fees to use the software. And then the remainder, roughly 60-70%, is what we call transaction revenue. So those are orders through our app, which you could liken to a marketplace. And so it’s very much either kind of software revenue or tech-enabled revenue, but it’s very repeatable, it’s recurring, it’s very consistent, easy to forecast.

Greg Head: It’s also two-sided. You actually have to get the big account, then you have to get their sales reps, and then you have to get printers wherever those sales actually are. Is it wherever the sales reps are? If somebody is in Florida or Germany, do you have to have somebody kind of local, or can these be shipped all over? Does it really matter?

Craig Letton: No, that is a really good observation. So I’ll give you an example in the US. So we’re working on a really big deal right now in the US with a very large customer. While we’ve been working with that client, running through some proof of concepts and running through the sort of RFP process, we’ve simultaneously been building out our supply chain in the US. So for the last two years, we’ve been basically identifying who the best suppliers are, sort of narrowing that down through a sort of procurement process, and then picking selected partners that can provide us with national coverage. And one of the beauties of what we do is that because we don’t own our own production, we can work with anyone, essentially. We connect to them via an API, and we can then have printers literally all over the world that we can just connect to very quickly.

Greg Head: You started as an international company, right? It wasn’t starting in Scotland and then the UK and then you started with international drinks companies, right?

Craig Letton: Yep.

Greg Head: Is the US the Holy Grail for your market opportunity where you could see most things? Or is it just another big market out there, like India or Europe?

Craig Letton: Well, I mean, as a company based in Scotland, Scotland’s a very small country. We’ve got 5 million people about the size of Massachusetts in terms of population. So if you want to build a big business in a relatively small vertical or narrow vertical, you have to go international. You’ve got no choice. You know, Scottish people have been doing it for hundreds of years. I’m pretty good at it. So yeah, in terms of expanding, America’s always been at the top of my list and there are sort of two reasons for that. One is that I used to live there, so I’ve got a sort of natural affinity for the country, I understand the culture, and I have a lot of friends there. The second part is that it is a massive market for alcohol. It’s also a very profitable market for the brands that we work with. It’s generally the most profitable market they have. And I guess a third reason really is that I started visiting the US for business in 2016. So almost six years ago doing some market research, I could tell very quickly there was a big opportunity for us because I could see how far behind some of these companies were in their marketing and how they were doing it. And I could also see that there was one incumbent supplier servicing almost the entire industry who was highly complacent. That just screamed opportunity at me. So I made multiple visits over the course of 2016, and 2017, doing more research, attending conferences, speaking to different distributors and suppliers, and building up a picture of the market and what we would need.

Greg Head: Before you started selling. You could go there and get an account and then go backwards from that, but you kind of got the lay of the land and said, Can we do this? Because there’s a lot of operations in what you do. I mean, it’s not just a software product people use. You’ve got to deliver physical things through your system and be able to do that at scale.

Craig Letton: Yeah. I mean, when I look back at it now, I think I was probably a little overly ambitious because in 2016 we had just launched the product and I was over in the US trying to sell it to some of the biggest players in the market. Right? And I didn’t succeed. But what I did get was a ton of feedback and a really good feel for the market and we didn’t end up doing our first, we didn’t start trading in the US until January 2020. So there’s a big gap there. And that was because partly because the market wasn’t ready for us, right? Yeah, certain things like the product data that we needed to run the app just wasn’t available at the quality we needed. So we literally couldn’t do it. So a couple of things have changed in that industry. Firstly, most of the big distributors do the bulk of the sales and marketing efforts in the US, Yes, they’re almost all family businesses, family-owned businesses, amazing businesses, and huge businesses. They’re now on like a third, or fourth generation. It’s consolidated massively now, so you’ve got a couple of big national players. And what’s happened is that the next generation of the family has come through who are my age and are digital natives. Right? They get tech, understand it and see the value in it. And that’s been a big change because those guys that come through into senior positions now and they’re looking for opportunities for technology like ours. And the second thing was that e-commerce has become a big thing in the US from a B2B point of view. So if you’re a bar, restaurant, or deli, you can now buy your products, and alcohol products from your distributor online. And what that meant for us was that the product information we needed, product imagery, product descriptions, all of that were now available because they’d done all that hard work to get their e-commerce platform live.

Greg Head: There you go.

Craig Letton: So we now have the database we needed for our app.

Greg Head: So you were growing and selling customers and it was working and getting your printers on the other side to do it. Did you at some point say, I’ve got it now I need to go get funding to get into the US? Or there’s some that trigger that’s always in the back of the head with founders. Should I get funding or should I stay off the funding drugs? How did you approach that as you were getting more confidence in your business was showing results?

Craig Letton: Yeah, for sure. I think towards the end of 2019 I realized that we were going to run out of cash. We were essentially going to grow ourselves to death by running out of cash. So I could foresee that coming. So I actually decided to raise funding in late 2019, and I found myself in a bit of a problem because the business was quite old. Obviously, it had been going ten years before myself. We were now nine years beyond that. So it’s 19 years old. The age of the company meant we didn’t qualify for a large amount of tax-efficient investment incentives that exist in the UK because the business was too old. And we also weren’t big enough, so we were turning over roughly just under 3 million at that point, we weren’t really big enough to get into the next tier of investors, whether it’s PE or VC to be attractive to them. So we got caught and this no man’s land of funding. So we were too old for angels and some of the syndicates that only invest with these tax incentives and too small for the big guys. So there was really only a very small number of funders available to us and what they call growth funders and we ended up starting that process to raise investment.

Craig Letton: We ended up getting two term sheets from two growth investors and I had those on my desk in February 2020. And at that time I was in Canada. I was in Vancouver and Toronto rolling out with Bacardi Canada and doing a training session for their sales guys, launching the market, our first North American market. And I had these two term sheets on my table. And to be honest, when I looked at the terms, when I looked at the consents and I looked at the things I had to sign up to, to be honest, I was like, I don’t want to do this. Like, this doesn’t look attractive. And it wasn’t the financials or the valuations or anything like that. It was really the amount of control that I was going to give up and also the consequences of some of these terms if I didn’t inform the investor of doing a certain thing, maybe hiring someone over a certain value, they could essentially fire me. And I was like, I’ve never had a boss. I don’t even have a contract. Like. Like it felt quite scary to say sign up for that. So I did delay signing those until COVID came along in March, which changed everything.

Greg Head: So did you sign one of those and sign up, like do a deal that wasn’t a perfect deal for you because you needed to?

Craig Letton: Well. So I’m sitting there in Vancouver, I’m doing this training session, and I’ve got a big group of sales guys that we’re working with, and they’re all very distracted. They’re all looking at their phones. And that’s not atypical of a sales team. They were VERY distracted and suddenly people were like, Oh, Trump shut the border. There are no flights coming in from Europe. The NBA is being canceled. The NHL is being canceled. I was like, oh no.

Greg Head: COVID hit hard.

Craig Letton: This little virus thing. I was a little bit dismissive of it up until that point. But suddenly, within that moment, I was like, Oh, no. So I literally booked the next flight out of Vancouver. I came back to the UK, and before I left Vancouver, I actually phoned my aunt, who is our HR director. So obviously we didn’t have an HR team at that time. And I said to her, This is going to have a devastating impact on our business. I need to meet you the minute I get off that flight to figure out how we’re going to deal with this because our revenues are going to go to zero very soon. So that’s that is what happened. I came back, we went straight into basically a crisis meeting with my management team. And within a week, we pulled every lever you can pull in the business to make sure that it survived. We brought in cash from all of our major customers. We sold things that we never even saw before. We created our own furlough scheme before the UK government brought it out. We created our own one. And a whole raft of different measures. We closed off all of our non-essential suppliers. We had to say goodbye. Unfortunately, there are two people that started that day. We just said We can’t take you on. So we made all these really difficult decisions and I was in a fortunate position because I had managed decline before. I knew how to run a business backwards. So I basically had the playbook that I could use. And within a week we’d pulled every lever. And on that.

Greg Head: The Survival Playbook.

Craig Letton: I have that. I still have it if anyone wants it. So on that Thursday or Friday of that week. So I think on Friday the UK government told us to go into lockdown. I think it was on Thursday I met with one of the investors in our office in Edinburgh. There was nobody else there the city was empty and I met them and I expected them to say, Craig, the deal’s off. No way. But what actually happened is they said, Craig, we believe in you, we believe in this product, we want to continue investing on the same terms at the same valuation. And I was like, Alleluia. You know, amazing. There are a couple of reasons that I hadn’t taken investment, but one of my selection criteria for that and for the investors was I want to partner with somebody who’s got values, right? Somebody who says what they’re going to do means what they say and isn’t going to take advantage of us. And that paid dividends because they held to those terms.

Greg Head: So how much did you raise there? And was that equity or equity plus debt? Y

Craig Letton: So that was a deal with a company called BGF. So BGF is quite a unique investor because they were actually set up after the banking crisis by the government, from what I understand. And they don’t have limited partners that are individual investors. Their limited partners are the five biggest British banks. So they all put 500,000 pounds into a 2.5 billion fund. And this fund exists to invest in growing kind of small to medium-sized businesses in the UK. So their investment criteria are a bit different, where they’re looking for companies that are strong, stable, profitable, and scalable. They’re not looking for unicorns, they’re not looking for high risk, they’re not looking for necessarily high returns. They’re looking for businesses that are going to be strong investments. And that suited us perfectly because that’s kind of what we were trying to do.

Greg Head: So what happened with COVID? There was the initial lockdown and then people weren’t out at pubs, but drinking went way up globally, I think. Did it just recover as the world opened up and sales reps were calling on pubs and restaurants again around the world?

Craig Letton: No, no… So we had a lockdown in Europe that lasted from late March through April and May into part of June. And for that period of time, our sales went to zero. Like they literally fell off a cliff. I still have the sales chart that sees it plummet from a record high in March to literally a flatline like someone’s died. It was horrific. And so we had to make tough decisions. We had to furlough people. We had to move to a short time working. We did have to make redundancies. We didn’t know when that was going to come back. Right? Like, yeah, nobody know what was going to happen. So we had to plan for the worst. And it was scary. It was stressful and it was scary, but I kind of took the approach that you can have the option of the fight, flight, or freeze. And we chose to fight. So we just went full-on and just attacked it as another problem. So we did all of that tough decision-making at the very beginning to keep the business and create as much runway as we possibly could. We were doing cash flow forecasts daily, so we knew exactly how long we could last.

Craig Letton: And I was obviously putting a lot of effort in with my finance director to secure this investment. So when the markets reopened in the summertime, we did see a big bounce. We saw a huge recovery, which was awesome. And that was gratifying because we tried to keep going as much as possible during the furlough period. Like I wasn’t in my back garden in a hot tub like my neighbors. We were smashing it every single day, working flat out so that when the market did open up, we were ready to go and that we were so we were speaking to our customers even though there was nothing going on and we were preparing for that rebound. So that paid off massively. We had a really strong recovery and in August 2020 we finally got the deal over the line with BGF. They did put it on pause for a few months to see how COVID played out, and then we probably had a six-week due diligence period where I was doing my day job in the day and then doing my diligence at the night and we got it over over the line in August 2020, which was amazing because that was a lifeline. Essentially.

Greg Head: They were giving you growth funding, but it turned out to be survival funding for a spell. And they stood by their deal and got you back to growth. And did you grow steadily after COVID opened up?

Craig Letton: Ha heh. No, not quite. You know, and I think one of the reasons that they stuck by it, not just by the deal, is not just because they’re are good people, but from the story that I’ve told you so far and I remember them say to me, like, Craig, you’ve got some serious scar tissue. You know how to handle this. And also, they saw our plan, right? So I showed them that playbook. I showed them what we’d done in that first week and they were like, Wow, none of our portfolio companies have done this yet. Can we use this and show it to them? So we really built a lot of faith and trust in our capabilities. And obviously, we had a really strong recovery over the summer. So I think they felt pretty confident. But when they made that investment, but none of us foresaw another lockdown that started in late December and went for four months this time. And as you know, our sales went to zero again. So we had four months of zero sales after they made that investment. So I’m sure the investors were like, Oh my Lord, what have we done here? But we took a really big decision there.

Craig Letton: I still remember the board meeting where we said, You know what, We’re not going to lay off anyone. We’re not going to furlough anyone. We are just going to keep going through this period because it will end. The market will open up. We can get a big head start on everyone else if we invest now. So we actually hired people doing that lockdown period. I think we lost about £250,000, but we kept hiring, we kept building the product, and we kept doing sales. We actually did more new business that year than any year before, and we just kept going. Sure enough, when the market opened again in the summer, we got another big bounce. In 2020, we managed to hold our sales flat versus the prior year. In 2021, we actually grew the sales by 40% despite losing four months to COVID. And that really is just a testament to how hard everyone worked in the business. We actually had to take a week off at the end of 2021 as a company to recover. We were knackered. It was a really tough period. But you have to be resilient. That is the number one attribute that you need to be an entrepreneur.

Greg Head: What is resilience to you?

Craig Letton: Yeah, I was thinking about this the other day actually, because I was trying to work out whether that trait was something that was born in me or something that I’ve kind of developed over time. I think it’s probably a bit of both, but I’ll give you a wee story. When I was young, I used to play a lot of rugby. Rugby’s a very physical sport. Very, very tough. Particularly if you play in a Scottish winter when it’s cold as hell. I played from the age of four till about until I moved to America when I was 12. I took it very seriously. I took it as seriously as probably a professional athlete when I was a kid. And I am very competitive. I love competing and I absolutely hate losing. Unfortunately, we were like the second-best team in Scotland, so we used to get to the finals of all the tournaments and we’d lose I have a box of silver medals in my garage from when I was a kid and I used to cry every time we lost. Like I was just devastated. And I was thinking about this day and I was thinking I used to have this weird trait where every time the opposing team scored, I would take the ball and run it back to the halfway line and get there before the other team did, despite no matter how many times they scored on it, I would keep running it back, keep running it back. And I was kind of like, Why on earth was I doing that? But I think that’s really like I developed the sort of leadership capabilities at a young age playing rugby with young guys. And just had that resilience to keep coming back no matter how many times you get scored on. And then if you lose, you go again. Not developing this fear of losing because I actually learned how to lose and then play again the next weekend and not worry.

Greg Head: You don’t die. There’s a difference between losing and dying for sure.

Craig Letton: And I think and I think through the business because we’ve been through so much, we’ve had that really tough buyout. We’ve had COVID. We’ve for every sales meeting that went well, I probably had ten that didn’t go well. Right? We’ve had people leave for very inopportune moments. It became almost a bit of a dark joke during COVID. I was like, what possibly could go wrong next? I mean, it was just horrific. But you just keep going. You know, I think I think that is sort of part of my nature and probably why I’m quite well suited to this job.

Greg Head: Where do you think this goes from here? It’s a growing business and maybe we don’t have another COVID spell and drinking isn’t going to go away. And sales reps calling on restaurants and bars isn’t going to go away. How big can this business become, this really niche-focused business, Right? How big can this business become for you?

Craig Letton: Yeah, pretty, pretty darn big, I think. Our original investment thesis was that we could grow this business from £2.5 Million to £25 million in five years. We’ve now changed that forecast and made it bigger. We think this could be a £50-£100 million business. And the reason for that is because the deals that we’re working on in the US, so we’re pretty far down the road with those and they are very large. So we’ve got lots in the pipeline already. There’s already there’s also a lot of growth we can have from our existing customers by going into new markets or adding new products. But there are also new verticals. So we have been very, very focused on one vertical, intentionally, and that’s paid off for us. It’s worked well, but there are multiple verticals that have the same problem and are as big or bigger than the one we’re operating in. Probably not next year because we’ve got a lot of growth to do in the US next year, but the following year we’ve kind of targeting that to move into new verticals and I think we can do amazing things. We’ve got a phenomenal team and we’ve actually just about to relaunch the product next year.

Greg Head: Rebuild the product that you rebuilt.

Craig Letton: Yeah. For the third time. For the third time. So, I think you mentioned regards to the US, right? The US is a very different market, probably THE most different that we’ve experienced so far. We quickly found through the work we’ve done there so far in the proof of concepts and work with some clients there that the requirements for the users are a bit different. So we’ve actually had to rebuild the front end of our app, change the user experience, and change the design so that it meets the needs of our US customers. And we’ve also had to sort of rebuild elements of the back end to make sure that it’s stable and scalable enough to handle this massive increase in volume. So we are working on that right now. It’s going really well. And that’s obviously where I reached out to you initially because I had this sort of decision point of, How do we massively increase our development resource quickly? And the solution we came to was bringing in an agency and it has worked like a dream. So we quadrupled the size of our engineering team to do this. When we built the product back in 2016, we moved quickly because we didn’t have a lot of money.

Craig Letton: We had no money. So we had to get the product market fit quickly. And so we built the product quickly. And it was still a brilliant product. It was miles ahead of anything in its time. It still is actually. We took a few shortcuts, right? We created some tech debt that eventually accrued over a four or five year period. And the product got to the point where we hit a bit of a…we came to a standstill essentially where there was so much to fix that the guys were spending all the time fixing stuff and couldn’t build any time building new features, new functionality or improving it. So we came to a to a crux where we had to make the decision, what do we do? So we kind of made some changes in the leadership. We brought in an agency that could very quickly stand up a very experienced team. We made a couple of changes in the team and brought in a new CTO. And it’s like a different world now. Our teams are just flying. It’s incredible to see and we’ve got some brilliant people in that team that have just done some amazing work. So we’re in a really good position now. But there was this time last year, not so much.

Greg Head: That’s an amazing journey. You’re in growth mode now. You’re no longer a scrappy startup. You’re a growth company, right? Lean and mean, but you’re a growing company, expanding regions, perhaps expanding verticals, expanding accounts, going to go create a big business. At the end of whatever that five year vision is, do you sell this company and pay back your equity investors or do you keep run a long term business successfully?

Craig Letton: Yeah, well, I guess, you know…When you take investment from an equity investor, you need to create liquidity for them at some point. One of the benefits of BGF is that there actually are an Evergreen fund, so there is no deadline to sell your business and they don’t pressure you to do so, which is again one of the reasons we chose them. But at some point, we’re going to pay those guys back. But that can take many forms, that could be a management buyout or a trade sale could be an IPO. It could be a whole range of different things. We could bring in another investor and go again? We’re only two years into that investment. You know, we’re growing like hell. Next year, we’re set to grow by about 130%. So we’re not really thinking too much about that at the moment. We’re really focused on scaling the business and building out our business in the US. But for me, it’s about how we kind of further the mission of what we’re trying to do right? So right, because what we haven’t mentioned so far is that there’s a big environmental impact on this. So so every order we move to the on-demand model, it’s one less order that goes to waste. And that’s a really kind of inspiring purpose for our team. So that’s given us a kind of North Star to head towards and we feel really confident about the future.

Greg Head: That’s awesome. Craig One thing I’ve been thinking about as we’ve talked today because now you have a growth company and a lot of people say you can’t build a growth company growing 100% a year headed towards £50-100 million turnover (revenue)–you can’t do that unless you get big funding unless you go to the big city, play the big game, you know, start early with funding. I’m trying to imagine how even if you had this idea, showed up in London or Boston, the hot spot, the tech center, and said, I have this idea, I need funding, let’s go. I can’t imagine you actually getting through all of the hurdles and growing a company up and doing it the way you did. I can’t imagine if you started with funding as opposed to a customer in a printing machine in a co-working corner, I don’t imagine that you could have created this opportunity doing it the big funding way that everybody says you need to and the ecosystem. Or could you?

Craig Letton: Well, I mean. When I think back to when I kind of bought the business and decided to go, I didn’t really know much. I wasn’t I wasn’t from the tech world. I was from the customer’s world. So I didn’t really know about this whole VC thing. And these multiple rounds of funding weren’t really the world I operated. And I operated in a world where you needed to make a profit every month to pay the bills. To me, it wasn’t really an option. But what’s interesting is I did actually speak to our current investor. In fact, the same individual that’s on our board now was back in 2015 or 2016. And I went to him and said, look, this is what I want to do, this is what I want to build. And he said, Great, it looks brilliant, but we can’t fund this until you’ve got traction until you’ve got customers, you know, and you’re a bit further down the road to three years later. I went back to them and said, Look, I did it. And they were like, Holy smokes, we can, we can invest now.

Greg Head: You’re the one.

Craig Letton: Yeah. So and that’s kind of how, at least from my point of view, I almost see the funding in reverse. So it’s like creating the opportunity, get the customer, get the deal, and then go find the funding rather than the other way round, which is a bit more typical these days.

Greg Head: Craig, is there anything you’d like to share with practical founders who are listening to this amazing story? You’ve got a very focused business and a lot of momentum in your growing company. What is it that you’d like to say to this crowd that would be helpful?

Craig Letton: You know, we’ve talked about, you know, what I’ve done a lot, you know, in the last period of time, but this would not be possible without all the people that have worked for us and worked for us now over that time. And I think my biggest learning over the last sort of 11 years is that it’s all about the people. And I look around me now and I look at the people on our team and our in our management team, and I think, Wow, these guys are brilliant. They’re better than I am. And that gives me huge confidence that we can go and solve any problem or take on any opportunity, no matter how big, because I just know that people around me are really strong and they can support me. And I think what I’ve been quite good at is surrounding myself with good people, whether it’s people in our team–or advisors. So I’ve got a big network of advisors, unpaid. People that I can reach out to if I’ve got a problem. I was looking at the funding thing the other day. I basically went to like ten different people and said, What do you think of this? You know, got all their advice, distilled it down, made a decision, and off I went.

Craig Letton: And I think that’s become something I’ve become really good at. And that becomes, I think because I’m relatively I’m pretty humble. I don’t think I know it all. When I came into this business, I was like 25, 26. I didn’t know anything. So I was basically just learning on the fly all the time. And I still am today. I listen to I think I listen to 7,000 minutes of podcasts this year. Spotify tells me I’ve read dozens of books and I’ve reached out to people like yourself when I need help. So I don’t think anything of picking up the phone or emailing someone and asking for help. And that probably has been the biggest thing to get me where we are today because I didn’t have the answers. So I just went to people who did and said, How did you do it? How did you solve this problem? Nobody has ever said no, it’s amazing how generous people are.

Greg Head: How isn’t that interesting?

Greg Head: You saw my post on LinkedIn and you said this guy might know something and reached out and we had a chat. I can still remember the conversation. I said You’re stuck unless you fix this and you got to the other side. So you’re the one. You get to the other side of all of these. Craig, what an amazing story, an improbable story, and an exciting story for future growth. You know, create a big and successful and valuable company and make a lot of impact in the world. You’ve raised just a little bit of funding and you’re on your way. I really appreciate you sharing the gritty story of creating MRM Global and now it’s all downhill from here. It’s easy, a cakewalk to 100 million. Congratulations on getting to where you are, as you should be very proud of the progress you’ve made and excited about the future. Thanks for being on the Practical Founders podcast, Craig.

Craig Letton: Yeah, thank you for having me.