Latest / Founder F**K ups / Worth €67 Million On Paper, Firing Staff The Same Week | Chris J Reed, Black Marketing
Transcript
- Ben Bagg: Today's guest is Chris J. Reed founder and global CEO of Black Marketing, the Singapore firm that has been running LinkedIn and personal branding for CEOs since 2013. Four number one best-selling books, more recommendations than anyone else on the platform, and a mohawk you can spot from across the room. In 2016, he signed Black Marketing Up as one of the foundation firms in the marketing group. A roll-up of independent agencies that floated on the Swedish Nasdaq. The share price went from 1 euro to 9 in under two months. So on paper, Chris is worth 67 million euros. But in reality, he couldn't sell a share. No cash was coming into the business. The group was not helping it grow, and he was laying people off while everyone congratulated him on the float. He was also going for a divorce, and that paper number went straight into the negotiation. So he's still paying for that today. Chris says the founders hyped it and sold their own shares. So one by one, all 18 firms in the group got out. It imploded, it was delisted, and the shares he eventually sold were worth less than he had sold his firm for. Today we're talking about what it costs to sell your company for a number on a screen and what it takes to build the whole thing back. Chris, welcome to the pod. Chris J. Reed: Epic to be here, man. Ben Bagg: Yeah, f that that's a hell of a fucking story to to start us off. What what at at the beginning, what did the roll up promise? Like bringing all these agencies into into w kind of one foundation? Why did joining Chris J. Reed: mean you know I just I just started black marketing as you said in twenty thirteen so I've had three good years of you know we're making profit we're making run and then I got approached by one of the one of the founders who said we're gonna do a roll up you know we're gonna basically roll up four companies to start off with and then we're gonna go on the Nasdaq in Sweden. I went the Nasdaq in Sweden there's a Nasdaq in Sweden it's like okay whatever you know let's do that Ben Bagg: Yeah. Chris J. Reed: and then I should have there should have been red flags then because he didn't it didn't say let's go on the SGX in Singapore or the hanging Hong Kong or the ASX or somewhere else or in KL Ben Bagg: Yeah. Chris J. Reed: where you are, Ben, he said the Nav stack in screen. And it's like that was mom, you know, immediately going, why not? So we had the four people do it, and he promised basically, you know, scale because everyone who basically Ben Bagg: Yeah. Chris J. Reed: does a roll-up and says we're gonna buy you, says we're gonna help you scale. And obviously, as you know, Ben, as a founder, as a sole founder, you know, I own 100% of the shares, I am responsible for the sales and marketing, there's me. But if I can have help from other people around the world. Someone in North America, someone in Sydney, someone in Zurich, someone in Hong Kong, someone in KO. I can basically, you know, suddenly go up from, you know, what I'm doing now, fivefold, sixfold, tenfold. And then you have a proper business. You don't just have a lifestyle business, have a real business. And that's what they promise. They also promise synergies as well, which I think is important, Ben, because a lot of these people say, come together and you're on your own. But a lot of them say we're going to have base synergies between the companies. And that was, you know, basically that's why I bought into it. Ben Bagg: time out guys. Lots of you are watching, lots of you are learning from the founder fuckups that we've all gone through, but please do me one little teeny favour and subscribe so that we can keep growing the channel and get more great founders on. Back to the episode. Yeah. So the scalability and and I I might be adding this in there, but I think 'cause when I first started business, I was a solopreneur too, small agency, small team. I was quite lonely, I'm not gonna lie, like and when I merged my business with another company, having like a co founder and like someone who's your peer, like it matters, right? It feels good to be a part of a team. Yeah. Chris J. Reed: Absolutely. Absolutely. Absolutely. I totally agree with that. I mean I basically so it's networking with those people, is meeting those people, saying we have the same problems, how do we help each other? Are there economies of scale, for example, when it comes to things like resources and so forth? So you know, it is an attractive proposition. Ben Bagg: Yeah. And so definitely felt right at the time. Did at any point before we get into the exciting part of one to nine Euros, did at any point you think this is too good to be true? Like or were you just like just Chris J. Reed: I you know, you're being swept up on this suddenly. And you know, I changed my C my I'm normally the only CEO with a Mohawk. For a while there, I was the only CEO on Nasdaq with a Mohawk. And I would get such abuse on LinkedIn, people going, you're not on the Nasdaq. I'm going, look, I I have look, I'm on the Nasdaq. It might be the Swedish Nasdaq. That's not my fault. It's still the fucking Ben Bagg: Ha ha ha. Chris J. Reed: Nasdaq, though, you know. So, you know, I was the only CEO on the basic the Nasdaq. So basically, so Ben Bagg: Yeah. Chris J. Reed: You know, you're being swept up in this. And also, you know, you are being promised wealth and you're being promised like this is how you reap the rewards of your journey so far, because otherwise you're just making profit and you basically have to make profit next year and you're waiting for a ten times or five times or three times valuation for someone to buy you. Suddenly you've got shares and you go from like, you know, suddenly having no value whatsoever, really, to someone saying you're now worth this. I'm going, Huh, I'm worth that. fuck it. You know, brilliant. Why would you say no? I mean, in hindsight, lots of people I met afterwards also said they did say no because of the fact it just sounded too good to be true. Which, you know, as we know Ben Bagg: Yeah. Chris J. Reed: Ben, sometimes when it is too bigger to be true, it actually is too good to be true. Ben Bagg: I mean normally. And so you you went down into the program, you got vr you got swept up in this in in in the excitement, the roll up came in, with we we list on the Swedish Nasdaq. Chris J. Reed: And we we went over to Stockholm Ben and did it you know, ringing the bell, the whole thing. yeah, fuck yeah. The whole situation. Ben Bagg: See they're ringing bell. So it's the whole journey. Yeah, it's the whole journey. It's the it's the entrepreneur's dream, like we're gonna list our Chris J. Reed: Absolutely. Ben Bagg: exit strategy. And rare in an agency to have that kind of, you know, normally it's a a different type of business that will go down that path. Chris J. Reed: Correct. Ben Bagg: so you're like swept up in all this, then the share price is one euro, boom, it goes to nine. how did that feel at the time? Chris J. Reed: Amazing because we were literally buying companies left, right, and center. Because what the founders were doing, they were using the hype share price to basically then buy a company, so which would then hype the share price. Some people, you know, have said this is the Ponzi scheme. I will leave you to determine whether you think it's a Ponzi scheme or not. But you know, if you announce that you buy somebody, your share price goes up, and then you get that share price, then allows you to go to somebody else and say, do you want to be bought? And now basically you have to give less shares out to have the same value. So by the time they did Ben Bagg: Yeah. Chris J. Reed: the eighteenth company at nine dollars, you know, people were being bought for nine times kind of like, you know, I'm sorry, the valuation, the amount of shares being used was nine times less than they gave me Ben Bagg: Yeah, yeah. Yeah. Chris J. Reed: and the other three founders, the original founders, which obviously is very attractive. If basically you're only using as a thousand shares, say, rather than ten thousand shares, you can buy more companies without actually having to reveal more shares. But yeah, of course, what that does is it creates a You know, you have to keep on buying companies. So that's why we got up to eighteen companies within three years. Ben Bagg: Yeah. And then eventually and and we'll we'll talk about how that kind of collapsed later, but when you were looking at that number, right, and and you're you're owning a percentage of a a quarter of a billion dollar business, you know, you're you're worth well what did we say was Chris J. Reed: 67 million euros I was worth. I had twenty, I think twenty-five percent of the shares. basically it's a publicly listed company. Ben Bagg: It's a public yeah. Chris J. Reed: So you'll literally look at this going, in nine months' time I can sell this and just basically go and buy Newcastle United or something, or become Metallico or something, or Ben Bagg: Yeah. Chris J. Reed: just follow Metallica around the world forever and ever and ever and ever, buying all the VIP Ben Bagg: Yeah. Chris J. Reed: tickets forever and ever and ever and ever. And you're literally all these things go through your minds, but of course it's it's it's not real because it's paper. Ben Bagg: Yeah. Chris J. Reed: And anyone who will tell you it's been bought or listed, but most of them I've met a few who basically that wasn't the case, most of them said you can't sell the shares. So I was not by any way unusual situation to not sell the shares. The problem is that some people within the group, i.e. the two founders, could sell the shares. And so that created Ben Bagg: Right. Chris J. Reed: an imbalance in terms of they were reaping rewards, but we were not reaping rewards of the four founders, and Ben Bagg: Yeah. Chris J. Reed: became six, eight, ten, up to eighteen. Ben Bagg: Yeah, and you didn't make any you I hope you didn't make any mistakes like borrowing money versus the share amount or or or Chris J. Reed: I tried. And that was see that could have been it could have been. No, but you're dead right because I was in a situation, especially going through my divorce, I was going to basically banks Ben Bagg: Il liquid. Chris J. Reed: in Singapore going, Look, I'm worth sixty-seven million dollars. Can't you give me a loan of a couple of million dollars on the back of it? And wisely then, and again, this should have been a fucking red flag as well. None of them, none of them said it was a substantial company. And I'm going, but why? It's on the Nasdaq. Surely it's a substantial company, it's been checked, it's been audited, all these things happening. And the fact that nobody and I'm talking ten banks I went to, small, big, medium, you know, little ones, all said no. That should have been a giant red flag. Hey, hi, hi, hang on a minute, what the fuck's going on here? You know? And they wouldn't so I couldn't reap the reward. I mean, in hindsight, that's a that's a benefit, because otherwise I would have been owing millions of dollars, which I could not pay back because the share price would have been below. Ben Bagg: You're bankrupt. Yeah. Yeah, yeah. You'd a you'd have been totally bankrupt if they Chris J. Reed: I mean totally fucked, yeah. Totally fucked. Ben Bagg: man, i I think that is a huge red flag. you know, we've all watched the the the movie when what's it called? The the T V show when Chris J. Reed: Wall Street. Ben Bagg: Jared Jared Leto no, Jared Leto walks into the bank at we crashed, walks into the bank and Chris J. Reed: we class. Ben Bagg: I wanna I want a loan. He goes, We can give you thirty thousand. He goes, I would like a few million dollars. Google me. I'm not sure if you've watched that. I love that clip so much. I w I love if that becomes me one day. It won't, but amazing. So sixty fo sixty seven million on paper. We're we're paper millionaire. You've got all these dreams, you're pumped, you're excited. Then you're going to the banks, they're saying, Sorry, mate, fuck off. We're not gonna give you any money. We don't think it's legit. You're still probably a bit defensive because you're like, Well, no, it is legit, 'cause you believe in the project. And if you Yeah. Chris J. Reed: Course. 'Cause I sh I can see a show price. I can see a show price listed on the Nasdaq. I can say it's real because look, Ben Bagg: Yeah. Chris J. Reed: I can I can look at it every day and see it go up and down, you know, it's like Ben Bagg: Yeah. So like you're like this is legit. Chris J. Reed: Yeah. Ben Bagg: but also within the actual business, the business hadn't grown. You hadn't got what you had been swept up in. So Chris J. Reed: Correct. Ben Bagg: now we actually you know, in and you're probably eye, let's be honest, your eye's probably not on the ball 'cause you're like pumped. Chris J. Reed: Of course I'm saying I'm worth sixty seven million euros for fuck's sake. You know, I'm I'm in Sweden drinking champagne Ben Bagg: Yeah, why am I doing a two K no? Chris J. Reed: on the ringing bells, you know, on y on yachts and stuff like this, going to VIP parties, so I'd think I'm worth sixty seven million fucking euros. Meanwhile, back at the ranks, kinda my team are based, you know, losing clients, they're thinking, Well, Chris is a millionaire now, no, he didn't try anymore. I was laying people off as I was ringing the bell. That's how bad it was, Ben Bagg: Yeah. Chris J. Reed: because basically I didn't have enough money to basically enough clients to come in, because I thought, like you said, probably my arth got the ball going, well, I'm worth sixty-something million euros now. In basic six months' time or a year's time, I can just basically, you know, give it to somebody else and walk away and just follow metallic for the rest of my life or do something else. Ben Bagg: Yeah. Chris J. Reed: So you do by very nature, I mean, I I challenge anyone not to be, you know, swept away in the dream of like, well, you know, you could l retiring at that age when I was like mid forties or whatever that was. basically is not retiring, retiring, but I even said to one of my friends at the time, he What are you gonna And it's like I'm I'm gonna invest lots of other companies, I'm gonna become a a serial investor, I'm gonna help people, I'm gonna travel the world, telling people how great I am and telling you know all this fucking bullshit. It's like, you know none Ben Bagg: Doing Chris J. Reed: of that happens. Ben Bagg: Yeah, yeah. Egg on the fucking face. So yeah i i Chris J. Reed: just a bit. Ben Bagg: definitely the so so I guess a lot of it is like your motivation to work on the current problems within the agency and the client clients that you were serving had basically completely vanished. Chris J. Reed: didn't completely vanish because obviously w I still had to make sure that we hit certain numbers to get more shares. They're very clever. The founders are going, you know, well if you want more shares, because you know it's doing so well at the moment, you can basically get more shares at a discount, Chris, as well, if you keep bringing the numbers in. And so you're going, okay, fuck it, you know, like let's streamline the company, let's win more clients, let's try and get synergies. Ben Bagg: Yeah. Chris J. Reed: And that's when I realized the synergies didn't work then, because I was going to the other companies going, okay. We're part the same group now. Do you want to buy our services? Do you know anyone who wants to buy our services? And they're like, nah. We're B2C, you're B2B. You're like, well, we do B2C marketing, you're B2B marketing. And I was like, well, you don't have any B2B clients? No, we're a B2C brand. I go, okay. Well, where's my synergies? Like, I'm looking around and go, where's the fuck's the synergies? There's no synergies. Ben Bagg: Yeah. Chris J. Reed: And so suddenly they see you don't have the opportunity to grow within the group because we've got no synergies. So then you've kind of like and then Ben Bagg: Yeah. Chris J. Reed: you're trying to literally go back to what you were doing before in basically, you know, I travel the world trying to find clients, using LinkedIn to find clients, which is fine and everything. But I thought I'd kind of moved up a step from that, and I hadn't. In Ben Bagg: Yeah. Chris J. Reed: reality, you know, six to eight months later, when I'm basically struggling, I've got cash flow issues, I'm going through this stupid divorce, trying to battle with the share price and the divorce at the same time. It's like my ex wife basically said, Well, you're according to Nasdaq, you're worth sixty seven million euros. I want You know, ten million dollars worth of shares. And I kid you not. In my divorce, my first draft of that divorce, it said, and Chris Reed will basically pay this ex-wife like ten million dollars, and it's just like becomes an unreal thing. I mean, luckily for me, I didn't sign that because the share price then started doing that. And then Ben Bagg: Yeah. Chris J. Reed: I was able to go back and show them the share price gone down, renegotiated, but it still started at an artificial level, because had I not Done that, it would have started at a much lower level because I'm an entrepreneur. And entrepreneurs, as you know, bent only pay themselves what they can afford. I didn't get a salary. I still don't get a salary. I get what I what I kill. Yeah, so basically Ben Bagg: Yeah. Chris J. Reed: that inflated the amount of worth that someone in Singapore, because that was a floated company from Singapore. I'd sold a Singapore company. I had to go to a Singapore court. And basically she could use that against me. So it was the worst, worst timing of all time when it comes to that. But I even then I didn't really think it mattered that much 'cause I thought, well, I had ten million out of sixty seven million, fine, you know, at least it's kind of done. But then, you know, that that's a nightmare, precisely. Ben Bagg: Can manage on fifty seven. Yeah, fifty-seven million, that's enough for me. You can have your ten. Chris J. Reed: Only fifty seven million euros, yes. Ben Bagg: Have your ten million Euros, no problem, girl. As long as you leave me the fuck alone. And so how Chris J. Reed: Basically Ben Bagg: yeah, how how did this valuation start to become so expensive? 'Cause o I mean that's just one part of it, I imagine. Like you would lifestyle changing. Yeah. Chris J. Reed: So basically they were hyping the shares. Yeah, because they were hyping the shares. So they were hyping the shares by buying companies, announcing it. And in some cases, Ben, they were announcing it before the a deal had actually gone through. So basically that is a typical, you know I don't know. It's hype, Ben Bagg: That's illegal, isn't it? Chris J. Reed: yeah, precisely. So they got rapped by Nasdaq for doing it after the case, which of course made a difference. But I'll tell you where where it came home, Ben, I was in Sydney. And I was meeting Ben Bagg: Yeah. Chris J. Reed: by pure chance two companies, which I won't name, who'd been approached by TMZ to be bought and not only approached, they denounced it. They'd announced on the Nasdaq that they bought these two companies. So I am in Sydney, in the Shanghala, I remember it crystal clear, even though it was ten years ago. And I met the founder of these two agencies and I said, Welcome, we're part of the same company now. And they said, What do you mean? I said, Well that we just announced on Nasdaq that we just bought you guys. And they went, No, you haven't. I say, what do you mean you haven't? Well, I just said I was interested in talking. Huh? You said you were interested in talking. And that's what they Ben Bagg: Right. Chris J. Reed: they showed me the email saying, Yes, I'm interested in talking to you. And the founders that took that as being, well, we bought them, then we can announce it on NASDAQ. And the share price went up. But of course, Ben Bagg: Yeah. Chris J. Reed: as soon as that didn't happen, and of course it didn't happen, because those guys are then going, Well, you've announced it. So now I can charge you ten times more than I was going to because you announced it. You've got no ball to play. We've got all the balls to play because I haven't signed the thing. So literally, when they Ben Bagg: Yeah. Chris J. Reed: s when they had to announce those two deals did not happen, that's when the share Ben Bagg: Yeah. Chris J. Reed: price started going down. And then everyone started looking at the numbers and everyone started looking at the laughing gross and everyone started looking at the companies. And that's when the share price really started plummeting. And then people started leaving. And that exacerbated they they basically the the share price plummeting down. And that was a nightmare, 'cause then it was basically as quick as it went up, it went down like just as quick, if not quicker. Ben Bagg: Yeah. Yeah. When did you kind of realize you know, 'cause obviously this is a pretty massive red flag. Like you're sat in a Chris J. Reed: Yes. Ben Bagg: in the Sangrillar as you say with these two founders and you're like, hang on Chris J. Reed: Can Sydney. Ben Bagg: a minute. There's a lot of and I feel like the Shangri-La is is the sixty seven million on paper move Chris J. Reed is following. Mr. Mohawk Chris J. Reed: Ha ha ha Ben Bagg: is like, hey, I'm I'm worth sixty million, let's go and hang out with the Shangri La, baby. Chris J. Reed: Yes. Ben Bagg: But when when did you realise the founders had started to perhaps cash out? Like 'cause you mentioned way at the beginning Pond Chris J. Reed: because we could see we could see basically that they were because obviously it it's the it's public. So you could see when Ben Bagg: Yeah. Chris J. Reed: people were selling shares and me and the other families are going, why why are you selling shares Ben Bagg: Scott. Chris J. Reed: and we're not allowed to sell shares kind of thing. So then some people were allowed to sell some shares to basically pay off partners or debts or whatever it is, you know, in a small amount of way. So it was totally totally controlled by then. But in in respect, so I'll give you an example what how this manifested itself. And about the about the second year, when I'd given some shares to my ex-wife, my ex-wife started selling the shares. So basically, so after this, this basically that was we had a stone moratorium, we couldn't sell the shares, and then she started selling them. And obviously, that's what that's on NASDAQ. So I remember taking my son to go and see Star Wars, and I came out the sun of me to like 19 different missed calls from one of the founders who then called me, who then Ben Bagg: huh. Chris J. Reed: called me and said. We're gonna report you to the police, we're gonna report you from inside the dealing, we're gonna report you this, like that. Because you're selling shares and say, I'm not selling shares. My ex-wife is selling shares. I can't couldn't control my ex-wife when I was married to her. I certainly can't control Ben Bagg: We own them. Yeah. Chris J. Reed: her now I'm fucking divorced from her. So basically, she Ben Bagg: Ha ha ha. Chris J. Reed: was selling shares. So they were threatening, they were literally threatening me left, right, and centre with this, that, and the other. I mean, it was all bullshit, because obviously they were doing the same thing. But effectively, she was basically selling the shares to obviously reap the rewards. So I had to go to her and say, Stop selling the shares 'cause otherwise I'm gonna be put in prison kind of thing. Ben Bagg: Did she stop? How much money did she make? Yeah. Chris J. Reed: Yes. Which she regrets, which she regrets to this day. Ben Bagg: I I would regret too. How much did she end up selling? Chris J. Reed: Yeah, very very very small amounts. A couple of hundred thousand. Ben Bagg: Okay, but still, so it sounds like she got the most money out of the deal. Chris J. Reed: Right, no, I you know, but it was she could've sold millions. I mean, if she was you know, if she I yeah, in hindsight she could have sold millions, got a good lawyer, Ben Bagg: Sí, pero Chris J. Reed: and she would have been fine, you know. Ben Bagg: Did you negotiate did you renegotiate with her? Hey, you got a couple of hundred thousand dollars. I got nothing. And I now you owe me money, girl. Chris J. Reed: Well, it was just red f it was just because it comes up. I mean, people, you know, y you can't sell shares unless you're doing it through blind trust or whatever, without it being notified to the Nice. You know, that's so it basically works both ways. You can see what other people are doing, but they can obviously see what you're doing as well. You just couldn't sell the shares. Ben Bagg: When they started to threshun you, and things like that and and obviously it's a public listed company, you can l she could legally sell her shares though she's allowed. w you know, do you start to feel like what the fuck's going on? Chris J. Reed: Well, yeah, obviously. Because obviously we had a contract which says I couldn't sell the shares. We didn't say I can't basically get my ex wife to sell them in a divorce. I even said to them, look, the Singapore courts told me to move the shares to her. You know, I I'm literally powerless to do we go through the Singapore courts. I have nothing to do with me. It's like but you know, so it's well it's a grey area because basically it wasn't as if I colluded and went, I'll tell you what, I'll give you the shares and you sell them and we'll split the profits. I have to do it. Because the court had told me to do it. I don't think I'd want to do it if I hadn't fucking wanted to do it, but I had to do because basically that was the law. But I obviously that Ben Bagg: Yeah. Chris J. Reed: was a red flag. So all these are kind of red flags going on. At the same time, so basically then the share price is plummeting down. And then basically the shareholders are basically going, What the fuck's going on? And the two founders, after I think it was about eighteen months or two years, were kind of booted out. you know, they left with probably lots of money, you know, probably sold all their shares, whatever. They brought in a new management team who were gonna basically, you know. make make the the marketing group great again to coin the frames and basically you know they were just these these bean counters came in and it got worse because they basically just kept on saying well you need to be contributing more, you need to be taking out more, you need to be doing more. And it just wasn't the same company I'd bought or I th the promises had all gone. The money basically the share price was now below one euro. So I was now Ben Bagg: Yeah. Chris J. Reed: worth less than basically they'd bought me. I still couldn't sell the shares. You still need to basically get permission from the company to sell the shares. It's still windows when you can sell the shares because obviously you have insider knowledge. So you can't sell shares I think it's the month before you announce your results. you can't do it for straight afterwards. There's lots of rules and regulations that people don't realize, and I certainly didn't fucking realise about when you can and when you can't do it. We got lots of missives every month about when you can, when you can't sell, and you you basically have no control on the shares. which I didn't realise. I just thought I could score the NASDAQ and basically sell all the shares. And you couldn't do that. You just you weren't allowed. Because obviously I mean, I can understand why. If I just gone to the market and sold $67 million worth of shares in one go, then obviously the entire market's gonna Ben Bagg: Gone. Yeah. Chris J. Reed: plummet. And why is Chris Reed, he's a founder, why is he sold, you know, why is twenty-five percent of the shares now changed hands? so basically I can understand Ben Bagg: Yeah. Chris J. Reed: that. But I mean we were seen a situation where that this at this point people were realizing and they were pulling their companies out. And what they were doing, Ben, because we hadn't signed in non compete, there were people basically who were founders who were just transferring clients from A, company A, which they'd bought, to company B. And then going, Well, I've I've less the company Ben Bagg: They just restarted. Chris J. Reed: now. I've started this company over here with exactly the same clients and exactly the same way of doing things. Ben Bagg: And if I understand that's kind of how you survived as well, because you sold the Singapore company but you had the whole Chris J. Reed: mine was mine was more complicated because basically I'd sold the Singapore company but I also had the Hong Kong company as well. And so basically I they threatened me several times. You know, I had three CFOs to give this perspective. Three CFOs in a year. Three CFOs. Each of whom threatens me in one way or the other, saying you're not doing this, you're not doing that. I'm going just bring another another CFO. And I'd had legal advice that my contract wasn't worth the the paper it was written on. So when they were threatening me, so other people were paying money to get out. So several companies basically they paid like a hundred grand to basically buy the brand back and start again. I'd had legal advice and said I didn't need to do that. So sure enough, basically I said, I'm leaving. I'm gonna close black marketing down and I'm gonna transfer all Ben Bagg: Well, you said about marketing. Yeah. Chris J. Reed: the clients over to black marketing Hong Kong. What you gonna do about it? And there wasn't a legal thing they could do about it. Plus at this point, they were running out of money and the share price was like 20 cents. You know, they had bigger Ben Bagg: Yeah. Chris J. Reed: problems to worry about. And they put out really nasty emails and a press release saying, Well, we never wanted him anyway. It was like one of those people that, you know, an ex-boyfriend or girlfriend saying, Well, we never wanted to date anyway. He's a terrible man, you know, that kind of thing. And it's like, really? That shows a little class you actually have. so Ben Bagg: Yeah. Chris J. Reed: that's basically every single client who was part of black marketing Singapore became a client of black marketing Hong Kong. Because obviously they weren't gonna stay the other company. And basically Ben Bagg: Yeah. Chris J. Reed: they were just gonna transfer it, they liked the service, they recommended the service, there was nowhere for else to go. Ben Bagg: working with you Yeah, yeah. And so that was sort of a part survival, part strategy there where you had the legal advice that hey we're gonna you know, this is perfectly fine. But then it's also survival, you're like, hey my shares are worth nothing. The founders are fucked off. We've now got these employed bean counters who just who are just trying to their job is to try and make something work out of this and Chris J. Reed: Correct. Ben Bagg: they've got an impossible mission. it's getting hostile. Chris J. Reed: Yeah. Ben Bagg: Let's get the fuck out. let's rebuild. beyond cutting the Singapore entity, w is there anything else you had to cut? Like like what did you have to do to kind of rebuild? Yeah. Chris J. Reed: we had to cut staff. I mean, literally, all the staff that were employed by black marketing Singapore, I had to cut half of them. And that's one of the reasons I started outsourcing to the Philippines and South Africa. Because literally I had to get rid of the officers in Singapore, because they were all tied to black marketing Singapore. So literally, by closing Ben Bagg: Yeah. Chris J. Reed: that company down, I had to basically transfer everything over that I wanted to, but it allowed me to basically get rid of some people because we were too top-heavy. Because I was I was building for expansion, I wasn't building for, you know. staticness. So Ben Bagg: Yeah. Chris J. Reed: it meant that, well, I can't afford these guys anymore. Therefore, basically I don't have a company, the company's gone, therefore I'm firing you now. And I literally had to go around I remember in the co-working space in Singapore going, you're fired, you're fired, you're fired. No, there's no notice period. There's no money. Yeah, literally there's zero Ben Bagg: Yeah. Chris J. Reed: money. There's zero money in black marketing Singapore because by this time I'd I'm moving all the clients to black marketing Hong Kong to even pay myself a salary. And don't forget, I'm still having to try and pay maintenance to my ex-wife as well by all by doing all this. And renegotiating that contract as this is going on. So literally a bank's fucked this way and fucked that way at the same time. I wouldn't recommend it to anybody. Ben Bagg: Yeah. Yeah yeah, no, I wouldn't recommend it either. so I mean that that's tough in itself 'cause you've probably worked with these people, sold them the dream, then you Chris J. Reed: absolutely. Ben Bagg: can go around and fire them and and you know, firing people is an acquired taste. I don't think anybody enjoys to do it and nobody enjoys to have Chris J. Reed: No. No. Ben Bagg: it done to them. So that rebuild, you had to basically complete restructure Philippines, South Africa for for resourcing. obviously you still had the brand 'cause you're still black marketing now. So Chris J. Reed: Correct. Ben Bagg: at least and you're a big part of that brand. Like, you know, it's very Chris J. Reed: Correct. Ben Bagg: 'cause you're selling personal branding and you are personal brand. You you the Mohawk, right? so so did it take a while to get back to pre acquisition s like revenue capabilities? Chris J. Reed: Yeah, absolutely. Absolutely. And if you and the trouble was that if you Googled us, basically you got all the shit because people were throwing shit at me for leaving or whatever and blaming me for the share price going down. you know, I was not in control of the share price at all. I was one of eighteen companies. So, you know, blaming one person because I was a scapegoat, 'cause I was basically saying things like how badly managed it was and what a bunch of Muppets there were, basically, you know, it's an easy thing to do. But the trouble is if you were Googling me at the time, that's all that came up. So literally now it does it doesn't exist Ben Bagg: Yeah. Chris J. Reed: now. It's very you f you find it very hard, as I I told you, it's very hard to find it now. But it literally I was getting all this shit saying, Well, apparently your your company's gone bust, or apparently this, apparently that and I have to explain the whole black marketing Hong Kong and black marketing Singapore. Now it's like I mean it's like, you know, the amount of times I had to tell this fucking story was just like Ben Bagg: Yeah. Chris J. Reed: you know, very, very stressful because even before selling someone our services, I had to explain why I still exist. Ben Bagg: Yeah. And then like people will Google you and then it just changes. I I imagine like people may not have ever told you it but you would have lost deals for sure. Chris J. Reed: Correct. absolutely. Absolutely. I I've I've probably lost millions of dollars worth of business as a result of it, yes. Ben Bagg: Because you know, at the end of the day, especially in a service business, people buy from you 'cause they know, like and trust you. Chris J. Reed: Yep. Yep. Ben Bagg: And if one Google removes trust, well, it doesn't matter if I know like you, I no longer trust you. Chris J. Reed: Correct. Correct. Ben Bagg: yeah, yeah, no that that that kinda that that that's just really, really difficult. Really, really difficult. and so for a founder who's perhaps being offered a roll up What is one question you think they should ask? Chris J. Reed: Is it real? Can you substantiate? Can you substantiate Ben Bagg: Well I assume they could say yes. Chris J. Reed: what you're selling? You know, where is the money coming from? What's the plan going forwards? When can I sell shares? What's the safety guard in terms of other people selling shares? You know, what is the plan in terms of, you know, buying other companies? What's the due diligence that's gonna fucking happen before you fucking announce it? You know, what kind of, you know, established experienced board members have you got because that's another problem we had no established board members at all we had a bunch of people who bought basically bought their friends into the boards and of course of course when the founders went well let's buy this company or let's announce this company they all went yeah let's do Ben Bagg: Yeah. Chris J. Reed: this because their share price was going up because they were being paid in shares as well so of course you had nobody on the board who went hang on a minute should we just think about this before we do this and I'd I'd Ben Bagg: Yeah. Chris J. Reed: say to people be cautious and actually check out who the board is made out of first. Make sure you have some industry veterans on there. Make sure you have some CFOs on there. Make sure you have some financial people. Make sure you have people who are already millionaires who don't care whether the shares go up or down. Because that way they can be more independent of thought and go, well actually this is not a very good way of doing it. Make sure you have conservative people on there and not just gung ho people going, let's go for it. because I think that's what we didn't have until it was too late. We brought in lots of CFOs and you know, board directors like three years later, by which time it was all too late because the brand was tarnished, everyone was slagging us off in the marketing industry. I mean it didn't help the two founders were going round going, We're bigger than WPP and we're gonna buy more companies than anybody else, which you can find and if you Google that, you can still find that on YouTube and on Ben Bagg: Wow. Chris J. Reed: Google. It basically went round saying, We're bigger than WPP and we're bigger than D D B and we're bigger than and I'm going, my God, you know and I'd have to face these people in Singapore going, Your your founders just said you're bigger than us, but we're worth a trillion dollars and you're like worth like, you know, two hundred million. And I'm going, Well, you know. Ben Bagg: Yeah. Red flags. Basically what you're saying is and because if I was to if I was to wrap this up a little bit, you got this opportunity that was so good, so amazing, too good to be true, that you you got you ended up prov giving away blind trust because you had rosy tinted goggles on. And you were so excited and it all felt legit because you literally went to Sweden, rang a fucking bell, you know, went to the parties, felt amazing, saw a public listed evaluation of yourself. but all of that stopped you from doing what you've just said. Do your D D. Who's on the board? Who's running the business? Why are we running the business? What's the thesis behind it? Basically all that logic stuff. So I guess the r the advice here is for anyone who gets an offer of any kind, whether it's too good to be true or not, just take one two fucking steps back. Remove your entrepreneur hat and put your banker hat on. Or your lawyer hat on or your you know, the the people who like just think it's gonna be shit automatically. Would would be would be probably the best lesson here. Chris J. Reed: I mean what I should have done as w with Ben in retrospect is basically go to a bank or go to someone who was in the know and say, This is a prospectus, this is what their plan is, what do you think? And they would have all gone, What the fuck are you doing? Run away now because other people did do that. I've met many, many people who were gonna be part of T G who turned it down because they just said it was too good to be true and it was didn't stack up. And they basically the red Ben Bagg: Yeah. Chris J. Reed: flags were but they were I think maybe they were more experienced, maybe they were less optimistic, there were less rose tinted glasses, you know. Ben Bagg: Yeah. There's all all sorts of reasons, but I think yeah, seek seek advice from perhaps pe a bit more pessimistic, pragmatic people when you're Chris J. Reed: Ha. Ben Bagg: when we're overly optimistic about Yeah. Yeah, exactly. Chris J. Reed: Actually, as entrepreneur as we are, we have to be although you wouldn't get up in the morning. Ben Bagg: But sometimes it is good to to have that that devil's advocate in the room. Just ask and if someone had said to you, You know what? Great idea, Chris, love it. Why don't you just go and quickly check with a banker? 'Cause this could be either absolutely incredible or a total shitshow. And like that advice would have been fantastic for you to have at the end of Chris J. Reed: And also and also, Ben, in respect as well, I should have yeah, it was only three years into the company and I s I should really have thought, well, if I'm gonna be bored at this stage where I'm only worth this many millions, why won't I wait two years when I'm worth this many millions instead? And actually wait. But I was too eager Ben Bagg: Yeah. Chris J. Reed: to base, you know, it because it is the marketing dream, it is entrepreneurial dream, sell the company and become rich and you know, go around the world watching Ben Bagg: Yeah. Chris J. Reed: Metallica, but you know, and investing in many companies and you know doing what you want. But and that's the problem as well. You get you get overblown with Well, maybe it's my only chance, maybe it's the only time it's gonna happen. Whereas other people said, Well, if you'd waited, then you know, we can do this roll up over here, there's this roll up over here. 'Cause at the time, it's not anymore, but the time there was lots of marketing roll ups going on, just at various stages targeting different firms. So I really should have waited. Ben Bagg: Yeah. Well, Chris, thank you so much for coming on the pod and and sharing Chris J. Reed: Pleasure. Ben Bagg: your heck of a heck of a fucking journey. I hope the the final divorce negotiations got better for you. And Chris J. Reed: Still paying for it. Because that's the other thing that people don't seem to realize is that these things have, you know, what I call the domino effect, and that that was used in my divorce, and I had to renegotiate it, and I renegotiated, but it was still higher than other people because of this fact. So I'm still paying for it ten years later, and I'll be paying for the next 10 years until my kids are basically over 21 because of that fatal mistake. So that's again why people should think twice before doing this kind of thing, because it it goes beyond the immediate, you know. gratification of becoming a millionaire and potentially has ramifications for things like divorce and, you know, other other legal implications. And that's a reason why Ben Bagg: Yeah. Chris J. Reed: people should be more cautious than I was. Ben Bagg: Yeah. Appreciate it. Thanks so much for coming on the pod.