Yahoo Finance How disastrous interview shaped $32 million man
The New Investors video series brought to you by Yahoo Finance reveals the secrets of the most successful entrepreneurs and business people in Australia today. This is the third episode of the season.
It sounds like something out of a sitcom: a student walks into a meeting with one of the heads of the biggest bank in the country.
He’s charming, witty, confident. He has a fantastic idea.
And the suit he is wearing is held together by gaffer tape.
As the founder of the $32 million Flatmates.com.au website, Andrew Maloney put it, “Clearly to be an entrepreneur, you do not have to be intelligent.”
Where it all began
Maloney was only 19 when the gaffer-tape meeting occurred, he told Yahoo Finance Editor-in-Chief, Sarah O’Carroll on the New Investors show. It was the beginning of the multi-millionaire’s entrepreneurial pursuits.
He had identified a problem many students were facing – the inability to pay for a laptop. So he decided to find a solution.
His solution was to broker a deal between Commonwealth Bank and Apple to set up a deferred loan program that would see students pay off the computer by the time they graduated.
“I just hate to see in the world a problem that annoys me, that no one’s doing something to fix it.”
Through a friend of a friend who knew the head of retail banking at Commonwealth Bank, 19-year-old Maloney was given the opportunity to pitch his business idea to the country’s biggest bank.
Everything was falling nicely into place. He had the idea and he had the contact.
But then he had a motorcycle accident.
“I remember flying through the air… and thinking, “Oh God, this is gonna hurt,”” he related.
But while Maloney walked away from the accident unscathed, his one and only $100 Myer suit wasn’t so lucky.
It was totally shredded on one side, and the meeting with the Commonwealth Bank was in just three days.
Today, he acknowledged that the wise thing to do would be to buy a new suit or even borrow one from a friend.
But when you’re 19 years old, the wise course of action often isn’t the most obvious.
“[Buying a new suit] did not occur to me as a possible solution. My solution – I thought it was obvious – was gaffer tape,” he explained.
“So I got black gaffer tape and I turned the suit inside out and I trimmed all the trims and I, very carefully… repaired the inside and I trimmed bits off and trimmed bits off and trim trim trim.
“Put the suit on and… the left side was just solid gaffer tape.”
Maloney realised that he hadn’t actually mended the suit – he’d just stuck it together.
Unfazed, he came up with another solution.
“I thought, “Well, that’s okay. That’s okay. That’s okay. I’ve got another part of my solution. I’ll just walk sideways.”
“Obviously.”
Most people probably wouldn’t listen to a man wearing a suit made out of gaffer tape but somehow, Maloney sealed the deal with the then-head of retail banking, who agreed to put $3 million into a trial program.
“I discovered he left the bank a month later so I had this secret suspicion he might’ve been really disaffected with the bank and I was his little retribution on the other executives,” he joked.
He went on to have a meeting with Apple (wearing a new suit) where he officially sealed the deal for the program.
You’ve just got to do it
While Maloney now jokes about that meeting, it’s that same attitude towards problem solving that has seen him launch several successful businesses, including Flatmates.com.au which he ultimately sold for $32 million, Student VIP which facilitated the selling of textbooks between uni students and now Student Super – a superannuation fund targeted at students who can’t afford to pay excessive fees for sub-par performance.
The common thread between all of them: he thought the problem was “dumb” and the solution was obvious. He just needed to make it happen.
“I think there’s a piece of my brain that’s missing, the bit that says it’s too hard, don’t try.”
“I just hate to see in the world a problem that annoys me, that no one’s doing something to fix it,” he explained.
The only difference is that the problem Maloney is trying to solve today isn’t a shredded suit, it’s Australia’s $2.6 trillion superannuation sector’s approach to young people.
But again, Maloney thinks the answer is relatively simple: don’t charge fees for balances under $1000, prevent the proliferation of multiple accounts and avoid paying excessive fees by investing in the index, rather than separate stocks.
It sounds simple – too simple to some, Maloney admitted.
“Two years ago, people were saying, “What are you gonna do next?” [And I was saying] “I’d like to start a superannuation fund.”
“And they just looked at me and said, “That’s not gonna happen. Do you know how hard it is to get a super launched? It’s not gonna happen.”
But he did it.
“I think there’s a piece of my brain that’s missing, the bit that says it’s too hard, don’t try. [But] I’m like, “Yeah, it’s gonna be too hard but what if I do try?” he said.
“It’s step by step. I’ve got this little problem. Solve that, then try the next problem and keep going until it really is impossible.”
The New Investors video series brought to you by Yahoo Finance reveals the secrets of the most successful entrepreneurs and business people in Australia today. This is the third episode of the season.
