[00:00:00] Hazel Showell: Hello everyone. I'm Hazel Showell and I'm here to guide you through the toughest transitions in life, business and even love. Welcome to Endings.

In today's episode, I'm speaking to Andy, co-founder, and director of Known Origin Labs. What started as a passion project grew to a 50 million valuation in just two. Following this meteoric success, Andy faced losing control of everything he built when he received an offer. Too. Good to refuse. While you are listening to Andy, pay close attention to how he lets his values guide his decision-making process.

After you hear Andy's story, I'll explain how you can stay true to your core. Through periods of change. But first, let's go back to the beginning.

Andy's story starts with curiosity, and a fascination with emerging technology, specifically blockchain.

[00:01:25] Andy Grey: So I started reading a little bit about it. It sounded quite fascinating. What attracted me to cryptocurrencies, is the ability to, with lines of code, actually, send value.

[00:01:36] Hazel Showell: And with that spark of interest, Andy and some friends decided to put together a small platform to see how blockchain tech worked in practice.

[00:01:46] Andy Grey: We all wanted to play with this thing. We wanted to see what it meant. Uh, blockchain-powered application.

[00:01:56] Hazel Showell: One of Andy's co-founders spotted a gap in the market using blockchain technology to authenticate the sale and ownership of art. One thing led to another, and suddenly Andy's co-founders were hosting a pop-up art gallery.

A far cry from the world of programs.

[00:02:17] Andy Grey: And we just invited a lot of people down, bought some drinks, and everyone turned up. Everyone was sort of fascinated and we sold a few little pieces of art on the blockchain and then we were like, oh, this is quite

[00:02:26] Hazel Showell: fun. The business continued to grow as Andy balanced his full-time job and passion project.

[00:02:33] Andy Grey: It was a pleasure. When you're into something and it's fun, you don't mind going into your bedroom at eight at night and doing a few hours or picking it up on a weekend. When people are starting companies, they've gotta do it for nothing and presume it's gonna go nowhere and earn any money because they wouldn't bother in the first place.

[00:02:48] Hazel Showell: His dedication paid off so much so that he and his co-founders were quickly able to quit their day jobs, to focus on known origin full-time. Their niche was creeping into the mainstream

[00:03:02] Andy Grey: with the ground swell of interest and, and, and then, the grown success of the platform. It then led. Conversations that started talking about acquisitions and getting larger shares of the company and bigger players

[00:03:14] Hazel Showell: in the space, A serious offer to buy the business was made, one that offered a life-changing opportunity, but could bring dramatic changes to the foundations of the company.

That

[00:03:28] Andy Grey: was sort of a seminal moment where the three of us had to look each over the eyes. Are we all on the same page? We're not gonna do this unless we all want to do it. We're not gonna drag one of us along. So, you know, and then there was some hesitation, there was some doubt, some questions, some nuns.

[00:03:56] Hazel Showell: So some pretty huge companies. Looking to invest in your platform? On what basis do you decide whose investment to take, if any

[00:04:10] Andy Grey: investment? For us, we realized over time wasn't all about just getting some cash, so you feel comfortable. It's getting that bit of guidance from investors, connecting you to the right people, keeping you on the critical path of where you want to go, and building out, a roadmap and runway so you can execute what you want to.

but in the crypto space, back in, in our first round, you know, it was still very much crypto investment companies who invested in firms like ours. We spoke to a lot of people, and although we were doing some decent numbers, people don't just throw our money at you. We realized, that we had to work hard to secure that first round of seed investment and we sold a small part of the company and got seed funding.

But then again, it is like people tell you that you're gonna need more money again quickly. To play on a global scale. You know, it takes, it does take a little bit of resource and time and cash and even infrastructure. As the platform was ramping up our bills for infrastructure were growing from tens of pounds to thousands of pounds.

And then if you start projecting that across the year, you're like, wow, it's gonna cost, you know, a hundred thousand to keep this thing going. And that's what a lot of people don't realize, cuz they think you just went to a little website. Well, you know, we were processing a lot of images, doing a lot of stuff.

It takes money. Generate the revenue and, then have that business model. There was another round of funding, like what traditionally people might call a series. That came probably only nine or 10 months after the seed round was completed because you quickly realize, no, it's great. We've raised a little bit of money, but we need some more money.

[00:05:45] Hazel Showell: Yeah... When it came to deciding though, who you would accept as, an investor, I know when we talked to you, you'd got a clear view of what mattered to you. Do you want to say a bit more about that?

[00:05:57] Andy Grey: At the start, we were very clear in wanting crypto. Investment funds because they understood what we were talking about.

We'd speak to traditional investors and they were very excited, but they couldn't read the numbers that we had. They didn't make sense because you know, you three or four people generating some big numbers, but there's no guarantee and it's in crypto, and crypto's volatile, and then you've gotta get it in a real bank.

In the end, crypto investors understood that there may be token models. You may have to rip up the old rule book of how you're gonna value a business over time. As, as the industry matured, traditional investment companies and traditional companies start getting a little more interest because what we were doing was then being picked up in mainstream media.

And it was probably coming up in board meetings in corporations that have nothing to do with blockchain because people are saying, oh, have you heard about this blockchain? How does that affect our business? So they're starting internally questioning the. , what does this mean for us? You know, everyone's seen like you Blockbuster, you know, go out of business cuz Netflix is like, the business changed.

So larger companies and larger investment firms were probably afraid of cryptocurrency and cuz of its volatility, but then they couldn't ignore it any

[00:07:15] Hazel Showell: longer. So you did attract the attention of some very big players.

[00:07:20] Andy Grey: Yeah. Yeah, I mean we had conversations with large companies and that was, that was a real buzz at first cuz you're like, here's a company that I've heard of that we use all the time.

And, this happened several times and they were like wanting to chat with us. We're like, wow, how do they even know about us? So you just don't realize what goes on behind closed doors in other corporations. In the end, after several conversations with several very large companies and, the ones that didn't come off, I can't name them.

Some were, I always felt fishing for information, trying to, you know, hold a sort of like promises of investment and, and, but really to figure out what was going on in the blockchain landscape. And in the end, when we spoke to the company that essentially acquired us again, we thought there might be a little bit of, you know, cat and mouse, but thankfully it, it was serious.

But for us it was quite unsolicited in some ways we weren't looking for, for an acquisition of the company, but opportunities present themselves and, and if, if they make sense, you know, maybe a deal could be done.

[00:08:27] Hazel Showell: And that's interesting isn't it? Cuz you had one plan, but when an office is put on the table, that makes sense.

You're prepared to kind of pivot and change and think of something else. So you decided in the end to accept the. And then when we were talking, you said there was a value that was at the heart of them and you that mattered to you. Yeah,

[00:08:49] Andy Grey: Definitely. We got acquired by eBay, right? And we built a creator economy that our whole goal was to support thousands of artists and maybe tens of thousands of artists one day, turn their creative output and be able to monetize it using technology in ways they could never do.

So a lot of people were putting their creative output on Instagram and stuff and didn't get any value back, and we enabled them to sort of turn these, this creativity that they had into something that could become a small business or fund them in some way. And eBay had the same, uh, started 27 years ago and had the same model.

They wanted to connect, connect all these people, who had a passion for something and creating and selling and in a particular category as, as, as you'd. With people who want to buy that thing. So both of us had the creator economy at heart. We want to help people create, quit their day jobs, build industries, and connect two people who've got a mutual interest in some value or something.

There were very interesting conversations at first because you're often talking and you feel like you're talking about the same product, but we're talking about two different businesses and we'd never, you know, figured this out. And other businesses connect people. But in the end, both of our products were marketplaces that are connecting two people, with a love of something in the.

[00:10:10] Hazel Showell: It was fab. We saw the connection between what looks at first glance different businesses while the deal was going through. There's quite an uncomfortable moment when you can't talk about it to your staff, and that's for any business. And anyone listening to this podcast who's, who's going through a deal at the moment, will know a little bit about what that feels like.

But d if you want to share a little bit about how that was for you now, that's done. Yeah. I

[00:10:34] Andy Grey: think you learn a lot. I've never, we've had a, you. through various businesses. I've had a small acquisition, but an acquisition of this size, and it involves people at this point, I think we had 20 staff, uh, are getting up to that sort of number.

So there's a responsibility. You foster a company and you know, and, and, and you plan. And then when things like this sort of slightly derail you and you've, there's lots of, you know, you've gotta take on a lot mentally deciding whether you want to go forward with an. And then there's a certain amount of secrecy and, for the right reasons.

You know, you wanna protect the deal and make sure it's all there. But I think at any merger and acquisition sort of player, there is a certain amount of secrecy, but it just feels uncomfortable. You used to like communicating with your team dearly, keeping them up on what's going on, and all of a sudden there's a bit of Clark and Daga stuff, so you just feel naturally uncomfortable.

it's not like a short time, you know, this can take months and weeks where you sort of gain an extra job behind the scenes and like sneaking out of rooms and having conversations that people you'd normally share these things with, you're not sharing. It just prompted a lot of questions like, is this the right thing?

Is it good? Because if, if it doesn't happen, then at least no one knows that we tried to do this. But on the flip side, you could gain some advice from people if it was possible, but we stuck to the plan, you know because we wanted. Get the result, but it, it, it just felt uncomfortable. Like it, outside of business, if you are keeping a secret from someone who, who'd liked to tell something, there's a certain anxiety around it.

And it was difficult for all the founders and people in the know of the deal because it, it's not, we're an open company. We like sharing and we like working together and discussing things, so it was just weird.

[00:12:22] Hazel Showell: And when you were able to tell your team, how did you handle that?

[00:12:26] Andy Grey: Well, thankfully, um, large corporations, I now realize have people who do this all year long,

So they were, they've prepped us perfectly. So it was an amazing day and it was planned very strategically by Ebbet itself and all the merger and acquisitions and communications team. So they helped us. They were in Manchester. There was a, a, a schedule of announcements and, but you have this weird moment where I suppose I always compare it to like buying a house.

There's a, there's a moment when it's done. It always feels like it's gonna be done and there's a moment when you think it's gonna happen, but until you get that call and get the keys in your hand, you know it's not done. And we were sort of waiting around a little bit and when it was done, obviously this sort of then kicked this new chain of communication in, into.

Which was weird cause you don't have time to like sink in and think, wow, this, we've achieved this immersion milestone because your next responsibility is getting this communication, communicating with your staff, communicating externally. So it was quite fascinating really how it all happened.

Cause it's in, you get into a whirlwind. and it was such an intense period. I ended up a day later getting Covid, so like we managed to communicate with the staff, but then I was off for like a week. It was like I just disappeared. But like, that wasn't intentional. But the great thing about all our staff, they were, you worry over these weeks of like hiding this information that they're gonna be upset, but it, it went well.

And I think that's a credit to the. The team from the acquirer handled it and we handled it, and it, it just shows we had a lot of trust with people in the room and they trusted us that we'd made a good decision. And, but there is a shock. Like you turn up for work and all of a sudden you've been bought by another company.

So I need to speak to some of the team and say, well, what was that really like? Was it a, you know, what did it feel like? Just that, that instant change. And I think it, it took a, a day, you know, everyone had to go home and sleep on it, and then the next day the questions. I'd love to hear what they say about it, to be honest, to

[00:14:25] Hazel Showell: hear all it is Newsome, isn't it?

Cuz like say any ending of something because essentially it was an ending of the SME. You'd founded and had grown and suddenly you become something else. It's like an end of identity and people can feel like, yes, is this gonna end who we are and the way we work? And there can be all sorts of concerns about that.

For something new to start, you have to let go. The old, but the starting point is a little, it's a type of grief and that first stage of shock. It's amazing how once they come, yeah, people, some people can get a bit naar and go through all the other emotions of it, but that was taken by the trust you have in your team and how much trust had built.

And similarly, you thought that was a core value of your acquirer, and it seemed to be a good match. The fact that it was well-handled and everything was well. So that it was as well as it could be.

[00:15:17] Andy Grey: Yeah, indeed. And, the people handling the deal and the people we've met since the nice people, I believe that they want to achieve the same things that we do.

There was, and, and that was important. And we had, um, a certain independence and, and had a voice, you know, so it is been a positive experience, but, All them conversations during, you have to build that confidence on both sides that, you know, this new marriage of two companies is going to work. And we built that over time.

And the more it went on, the more we felt we were on the same page. And that made it easier. It was, but it was still hard because it's a total transition from you owning, being a part of a company, and being in control. And we're still, you know, helping run the company now, but you don't own it anymore. So we, you have to divorce yourself.

This change, but what's been interesting coming through this new start, as you call it, has all this, everyone's as committed and as passionate still about this project and delivering this sort of mission of helping creatives quit the day jobs and integrate that into a, into a, a bigger company and, and then start sharing our combined goals.

[00:16:24] Hazel Showell: That's wonderful. At least they still see, it feels like the same company, the company they joined and the mission they, they wanted part of.

[00:16:32] Andy Grey: Indeed, indeed. And it's, and it's, we're still there every day, you know, and trying to achieve the same things, you know, that. The mission doesn't change, you know, it's just some of the, um, the branding technicalities really

Yes,

[00:16:45] Hazel Showell: yes. Well, interesting. When you're helping people to navigate change, one of the things you always say is, to be clear about what's not changing. And let's say they still come into the same place to see the same people. There's some like the reassurance of that. It's like, all change at that moment. But the thing that probably changed for you that's quite profound, that'll take a little time to settle in sometimes, is that almost that Solomon's choice of any founder of the, the point where you have to let the baby go off.

Like, if I want it to grow to be all it can be, I have to be prepared to let it go and let go of control. But you're still there.

[00:17:25] Andy Grey: Yeah. And I think, yeah, it's the, it's the opportunity, you know, it's. , you know your strengths. You're under no weaknesses. Mm-hmm. , we knew we needed, we might need support at some point, whether that's to grow the team, whether it's financial support, whether it's compliance and legal support, you know, but rapid enveloping yourself into a bigger company is not always a bad thing because you, you then gain all their capabilities as well, and then we can lean on them.

They can lean on us. So it's, it's been really interesting because they think about things we think about differently, but that's, We get different opinions. So they are like investors themselves cuz they're investing in us and, and our vision. And now we have a shared vision.

[00:18:06] Hazel Showell: Good. I was gonna say, do you feel any differently about the company now?

[00:18:11] Andy Grey: No, not at all. And that, that's the good, the good thing. It's like we still work very hard and, uh, speaks to a lot of artists. Speak to our team. We're growing the team, we're attracting new people. And I think like when you speak to all the founders and, and the leadership team, they've still got that passion for this thing that we do, which is, uh, selling digital assets, working with creatives, building new tech, building, you know, being able to educate people on what we do.

It's, it's still there. It's the same thing.

[00:18:40] Hazel Showell: Wonderful. So if you sum up, what's the future look like now?

[00:18:43] Andy Grey: Well, we believe when seeing the world in a certain way with NFTs and art and we want to make sure that everyone has the opportunity to use this. And it sort of can enhance our proposition as an out marketplace, and it can, and it can bleed out into the verticals.

So I've always loved blockchain, and I've always loved NFTs. We love cryptocurrency. Over time, this is becoming more accepted. It's still very hard to use a lot of this technology. So our goal is to, as well as building a successful business and business unit in some. to, is to get the world using this tech.

You know, we've got a shared industry goal with all the other companies who are working in this space to get it in people's hands. You know, I don't know if you own an NFT Hazel, but that's the goal. It's, it's whatever you are into whatever you want to own. You can digitally own it. We can help you do that.

Your first purchase might be on, on our platform, you know, or somewhere else, but the goal is to get everyone educated and using new Tech for the right reason.

[00:19:50] Hazel Showell: As you heard, Andy was faced with a decision that many small businesses are faced with that as you get successful, at some point, you often recognize as a founder that alone you are not always just the right solution to scale a business and to let it be all it can be. So, You have to be ready to let it go.

It's a courageous and generous act of faith in what you've built, and it's a bit like parenting for John, your job, right? When they're successful and independent without you, even if it breaks your heart, it's the right thing to do. So ending his control was not the wrong decision, but it was a big one.

And Andy will always be the founder. As with the other co-founders, it is an indissolvable bond with a company. Whatever happens in a. Now, the success was unexpected in some ways for him, but at the heart, the company remains a couple of programmers, UX specialists, and the BBC. And what you may have noticed is that the decisions he made were always based on values of synergy that both work on trust.

Uh, and I've got a lot more confidence than any relationship based on shared values. , the coaching, uh, that could be useful if you are going through this kind of decision. There's, there are two angles to look at this, and sometimes there's an idea about choosing when there's no choice. So there can be many decisions facing you as a business owner.

where you feel like ahli me, I've got no choice in this. But if you make a decision where you feel like you have no options, then you can end up resentful, bitter, angry, or annoyed. And it's quite negative and it's very hard to find a positive way forward on that. And it always tends to leak. Uh, it's a bit like imagining that, uh, you've got options A, option B, and, and we always see choices that we've got two options and we want to feel like we can choose between them.

But life isn't like it, Sometimes it is just, well, here's option A, choose it. And one of the most interesting skills you can develop is being okay to be faced with just option A and saying, okay, I choose it. Cuz of course you can always not choose, and you can always not make a decision, but that doesn't take you forward Sometimes.

The ability to simply accept I only have one choice ahead... So I choose it and I actively choose it, and I embrace all that it brings. And by actively choosing it, it becomes powerful, constructive, and positive, and it takes you forward. And it has a very different sort of psychological feel when you actively choose something rather than, uh, feeling like you've been forced into something because there were no alternatives.

So it's, that's more philosophy than psychology, but it is a really interesting point and something I think many business owners might recognize. The other thing to look at when you are growing a business and thinking about that point of going from startup to scale up. , it's about managing expectations and working with your team.

And if they know that they do, there is trust and there are expectations that sometimes there is information that can't be shared. That's not because, uh, you can't be trusted. It's simply because at that point that information can't be shared. But as soon as it can be. It will be then trusted to be sustained and maintained.

And it's really interesting of building that set of expectations because having expectations of your staff and your staff having expectations of you is a core part of the psychological contract. And people need a strong psychological contract to feel they have a safe place to belong in any country.

One thing you'll notice about, uh, people's expectations is when they are damaged when they feel they're not getting what they want in any business, it's like a drip, drip, drip of war on granite. It slowly wears away at that sense of connection and, uh, connectivity of trust in a company, and eventually, it can break.

Now, in Andy's example, that is not what happened. It was able to be maintained. It was maintained through, uh, communication. When it. , uh, planning of that communication carefully. The fact that there was passion and energy and communication at the beginning, but also the fact that because people were doing it, cause they loved it, there was a shared expectation, a shared goal, all of those expectations of each other.

Everyone was doing what they could, everyone was doing their bit toward a shared goal. Those things tend to, uh, work out better because people have a belief. That I can trust you, you will play your part and I will play mine and this will work out okay? So even when things are not as we expected, so if something's changed, I trust you'll still honor that original psychological contract that you'll play your part and I'll play mine.

And we're still following our passion. So I think for any business, whatever stage you're at, if you're checking in to say, how strong is that contract? How trusting are your staff? And if you're not sure, it's never too late. You can always sit down with people and say, what'd you expect of me? Let me tell you what I expect of you.

How well are we doing at delivering? because sometimes people expect things that you think lie to me. That's like expecting the moon on a stick and a pony called sparkle. It's just too much. So can we meet or manage those expectations so that at least we've got a really strong contract going into a deal process because?

We've not talked about it too much today, but um, going through any acquisition process can test relationships. It's a very challenging, very stressful time, and you have to be able to trust each other because the pressure's on. No, it was a fantastic story today, and it's lovely to hear from Andrew that he's been able to get through that process and emerge with a fabulous story to tell and a very positive future ahead.

And that's not always what happens for everybody. So I think the key is, Start as you mean to go on a clear, trusting strong psychological contract where you can meet or manage expectations and be clear that sometimes things can't always be shared. And that's not because you're trying to hide a devious, it's because things can't be shared for commercial reasons.

And as soon as you can, you will, and you've got to honor that. So as soon as you can share things, do. And you can take people very safely through the deal process, dealing with, the stress that can cause is a different matter. And then that's something that, depends on the person as to what they may need to cope with.

The other side clearly and his passion saw him through in your hurry. It was hurt. It was very evident throughout that story. , certainly in terms of the ability to create those strong contracts. The one thing I would say is if you are ever not sure whether or not you need to revisit these expectations, I would always watch out for one of four things because if people feel that the expectations of their company have been broken, they re react in one of four very traditional and uh, clear ways.

The first thing they do is say, so, they start moaning. Now, the one thing I have to say with British culture, in particular, is, uh, sometimes it's a bit understated. In other cultures, it's wonderful, it's clear. People will give you clear feedback that things are not as they should be, and they're unhappy.

Then the next stage is a bit more subtle because they go silent. They start to with. People who used to return your calls don't return your calls. People who used to respond to your emails quickly, they're a little slow at returning the emails and though that kind of silence because essentially they are, they're going quiet on you and that's, you have to watch out at that stage's easy when you are stressed, cuz you're going through a deal to think they're fine.

They're not moaning. But what you've missed is the fact that they've given. They've stopped moaning because they don't think there's a point anymore. It's a more dangerous phase in this breach of the psychological contract. And then the next stage is even more interesting cause this is when we get to what we call destruction or neglect.

So they start to harm. So everything they actively, uh, muck up, they actively, uh, start anything from stealing the post-it notes in the pens to, uh, corporate espionage. They. Telling your secrets to competitors, they start figuring out if can they take your database if they're going to get a job with a competitor.

So they start doing some dangerous and uh, damaging things. And you need to be watching out and making sure you've got the systems and processes in place to make sure that's not happening, but also recognize why it's happening. It's happening cuz they feel they've been let down, that they didn't get what they thought you'd agreed.

So the first step isn't to step in and get heavy. It's to step in and listen to understand what happened. But the final stage is actually when it's too late, cuz the final stage's exit. You get a resignation letter. The saddest thing, I think is when the first thing you know about breaking the expectations of your team is the day that the resignation letter is.

So I'd always say watch out for the first stage. Watch out for those, uh, minor grumblings. Those, you know, they're trying to be a little bit minor about it and, maybe underplay it. But they're trying to tell you this is not as I thought it was gonna be. This is not who I thought we would be.

This, I'm not happy. So watch out for it. Deal with it. At that stage, you won't get to that final and fourth.

Huge thanks to Andy today. I hope you've enjoyed today's episode of Endings, and if you'd like to share thoughts, I would love to hear them. You can reach me at Hazel Cs on Twitter and LinkedIn, and if you're interested in understanding the endings happening in your own life a little, then I have a perfect thing for you.

It's my five-step worksheet and it's developed specifically for listeners of this podcast and based on years of mine. The first step will only take about 20 minutes to complete and will bring you a lot closer to understanding how to make difficult decisions around endings. Click on the link in the show notes to download your Thriving through endings worksheet now.

Now finally, if you know somebody who might benefit from hearing about selling control of your business, then please share this episode. I'm Hazel Carter Shall, and I hope you'll join me again for another episode of Endings.