Business Expert on the Budget, the Housing Crisis, and Intergenerational Inequality

Naomi Simson is the founder of Red Balloon and co-founder of the Big Red Group. In this conversation, Naomi breaks down how she built a business that now delivers an experience every 16 seconds to small businesses across Australia and New Zealand. Simson also delivers her unfiltered assessment of the recent federal budget, arguing that too many changes implemented too quickly will cripple business confidence during an already challenging period of technological disruption. See omnystudio.com/listener https://omnystudio.com/listener for privacy information.

• 0:00Speaker 00

  Naomi Simpson, welcome to Straight Talk. It's about time you come on my show. It's crazy. We've known each other for about a million years. We've spoken lots of things together.

• 0:07Speaker 01

  I don't think we need to reference the million years. We're getting wiser, Mark. Wiser.

• 0:12Speaker 00

  We've known each other for wiser years, whatever the words are. But welcome and thanks for coming into the studio today.

• 0:17Speaker 01

  Good to be here.

• 0:18Speaker 00

  It's good timing too, to get someone like you in here to talk about some of the stuff we saw on the budget. I'll just park that for a moment though. But just if we could just introduce you first. So, you know, my first recollection of you is when you did something quite disruptive when you launched Red Balloon, which was an e-commerce business, but like, I don't know if it was described as e-commerce in those days, but how many years back now we're talking about?

• 0:44Speaker 01

  That's 25 years ago.

• 0:45Speaker 00

  25 years ago. It's around the same time I did Wizard.

• 0:48Speaker 01

  It is. It is. Yeah.

• 0:50Speaker 00

  And exactly the time I did Wizard, actually. I was 26 years ago I started that. What was disruptive? I mean, we can look at it now and say it's not disruptive, but what was disruptive at the time, Naomi?

• 1:03Speaker 01

  Well, believe it or not, we were at the very beginning of the internet way back then in 2001. And, you know, there was no such things as social media, smartphones, digital cameras, nothing. And I think sometimes people wouldn't mind going back to that time, but it was a very simple concept. The fact is that there's a lot of small businesses who find it very expensive to find customers and that's not changed. You know, it was expensive to go on the Yellow Pages. Well, it's even more expensive now to run performance marketing campaigns and try and build a brand. So I've been a professional marketer my whole career. I worked in big brands like Apple, IBM, handset, that was an airline.

• 1:46Speaker 01

  And so I flipped the model. So instead of working for each of these small businesses,

• 1:55Speaker 01

  Could I give a brand to a whole industry and take a clip of the ticket? Rather than just them being a marketing agency? And so, yeah, I flipped the model and the internet enabled that to come to life. Which wouldn't have been possible. And I didn't know, you know, with First Marketplace and, you know, I had no idea that I was such a trailblazer. I was just putting one foot in front of the other.

• 2:23Speaker 00

  Yeah, it might have made a difference if you did know, actually. You might have thought, wow, what am I doing here? Because I would just remind listeners that we had in the ninety eight, ninety nine, what was known as a tech boom. And your launch of your product was sort of just off the back of the tech boom. Tech boom, of course, became a tech crash, as I always do. And you're right, there was no, there was internet, but there was no, the devices didn't, our phones didn't connect to the internet. Those days it was all computer laptops and stuff like that. Apple laptops, or I think they're Apple laptops, probably.

• 2:57Speaker 01

  They were actually these iMac jelly shaped.

• 2:59Speaker 00

  That's right, that's right. Yeah, those big things.

• 3:02Speaker 01

  Clunky and you had a desktop.

• 3:03Speaker 00

  But they were colourful though.

• 3:04Speaker 01

  Yeah, they were colourful and you couldn't move them. So, you know, they were.

• 3:07Speaker 00

  Desktop, you're right.

• 3:09Speaker 01

  Yeah.

• 3:09Speaker 00

  And so, do you remember the moment though you had this thought? I mean, like, because it doesn't seem disruptive today, but it was disruptive at the time. To build a marketplace, to, just correct me if I'm wrong now, to link up suppliers of, or merchants of experiences in your, in the Red Balloon case, with consumers.

• 3:34Speaker 00

  Where consumers could choose from a whole lot of experiences, instead of just going to one experience provider. They're all listed there. So you effectively built a marketplace, is that right?

• 3:45Speaker 01

  And also, we gave those experiences authority. So, so where did the idea came from? I was a freelance marketer. I'd left my corporate career because I had small children and I wanted some more flexibility in my life. And back in the day, we didn't have any of the things that we now have. And then I was listening to my clients, who are mainly small businesses. And I realised that what they really wanted, they didn't want marketing, what they wanted was customers.

• 4:16Speaker 00

  Yeah.

• 4:16Speaker 01

  And so, I, one of those clients.

• 4:23Speaker 01

  Came to me and the tech rec was going on, as you'd said, and he was in a tech business. I was doing their marketing for them. And he said, look, I think they're going to close me down. And he says, but there's this business concept in the UK called Red Letter Days. And it's a catalog and call centre business. And in Australia, we can never do catalog and call centres because the country's too big and the population's too small. And he said, I wonder if we could do it online. But before we could start this business, he was offered to do a management buyout for a dollar of the tech business he was running in Australia. So he went off and did that and I was kind of left with this. But I remember the moment that I named it Red Balloon.

• 5:05Speaker 01

  So Red Letter Days was not interested in us in Australia, the Antipodes so far away. So it needed to have its, a life of its own. And I was literally walking around in our backyard and I remembered a movie from when I was a child called The Red Balloon.

• 5:23Speaker 00

  Oh, wow.

• 5:24Speaker 01

  Yeah. And it's about a little boy who lives in Paris and his best friend's a Red Balloon.

• 5:29Speaker 00

  Wow.

• 5:29Speaker 01

  It's such a beautiful story. I want an Oscar award. Yeah. So I thought a Red Balloon is a symbol of joy and happiness. And, and I just wanted people to see any Red Balloon and be reminded of the first Red Balloon they were given or that they gave. That experience, the emotional connection to being with people and connected. And ironically, all of these years later, when we're so overwhelmed with social channels and the, the messages that are coming at us, there is a real move offline again, you know? So we come online, as Pinterest says, you come online to work out what you're going to do offline.

• 6:12Speaker 00

  Yeah, that's, by the way, that from in my world, that's about exactly, that's exactly right. And actually, I'm really glad you explained the, the. Branding or the name Red Balloon, because once you've got the name, it's pretty easy to play around with the branding in visual sense. But the sort of emotion that sits behind it, I never really thought it through because I'm not someone who used it, but it doesn't matter.

• 6:35Speaker 01

  There's plenty of opportunity.

• 6:38Speaker 00

  That's the way I live my life. But nonetheless, the emotion was that little window into the emotion that was very, very good. Why did you decide to make it about experiences though? What's the connection with experiences? And what does experiences mean? Like, it doesn't mean just going on a holiday or travelling up and staying up in a tiny home in Byron Bay or something, but what were the experiences you decided to put in there?

• 7:04Speaker 01

  Even back in the day, when I started the business, we all had too much stuff. And really, what anybody wants is time with their family and friends, the people who are important to them. And often, people want to do something that they've always aspired to do. And it was in listening to customer stories that I understood the impact that we were having on people. So this man wrote that for his father's 84th birthday, he gave him a flight on a DC3. And he drove him to Bankstown Airport and he said, "My father was excited, like a little boy going to a birthday party." He said, "And when we flew together, watching his joy was amazing."

• 7:48Speaker 01

  He said, "When I, when we were driving home, his father shared with him that as a young man, he'd heard the first DC3 flight on the wireless and he'd always, always wanted to be on one." He said, "My father is a very quiet man. I'll always remember today as one of the days he spoke." And then you understand why you do it, why I keep doing it. Because that moment of connection, and it's what we need more than anything, is to connect with the people that we love, to create conversations. Shared experience is what gives us... And not all of the experiences are, you know, fun and they're sometimes exhilarating, exciting or challenging, but that's what makes us human.

• 8:32Speaker 01

  On the flip side, is that because we bring people together, that's what we do. So we curate, we go out and there's four and a half thousand small businesses that depend on us for customers. And I was speaking to one ironically in December 2019. And he said, oh, names, I didn't know we were going to get old together. I speak for yourself. I'm just getting wise. So that's my line. I stick with wisdom. And he said, do you realise that that first year I had one hot air balloon and 900 passengers?

• 9:06Speaker 00

  Over the year?

• 9:07Speaker 01

  In the whole year, he had one hot air balloon and 900 passengers. And he said, in the 20 years since we've been together, I now have 19 balloons and 23,000 passengers. And he said, and for every single one of them, when they come to the Hunter Valley, they buy accommodation, they go to wineries, they eat at the local restaurants. It's at least a thousand dollars to our community. We've literally changed the economic impact in our local region. So when we went into COVID, we were able to talk to government about the impact of, of driving economic outcomes for regional and rural Australia through small businesses.

• 9:48Speaker 01

  Because people don't travel for the sake of travel. They travel because there's something there that they're going to do and experience. So when we can put the experience front and centre, we can drive economic outcomes for small businesses throughout Australia.

• 10:03Speaker 00

  We spend on average around 26 years of her lives asleep. So if you're going to spend that much time doing something, you may as well get good at it. That's what got me interested in Whoop. It's a wearable device that helps you understand what's actually happening with your body, especially when it comes to sleep, recovery, stress and overall health. What I like about Whoop is that it takes all that information and it turns it into simple personalised insights you can actually use. You start to notice how things like travel, late nights, or even eating too late affect the quality of your sleep and how you feel the next day. So it's not just for athletes. It's for anyone who wants to feel and perform better.

• 10:47Speaker 00

  To learn more, head to join.whoop.com/mentored and get one month off your annual Whoop membership.

• 10:56Speaker 00

  So do you feel as though then during that period and continuing on today, obviously, because you guys still own it, but do you feel as though that you've had a really big impact on small businesses just generally when they can give you that sort of feedback? And, and as a result of that, do you feel, did you ever feel as though to yourself that you should have paid for your, your luck in your life? I mean, why did you do this? I mean, apart from obviously made a few bucks out of it, but why did you do this? Was it a pay for it? I want to pay for my experiences with other people? Or did you positively go and say, I really want to connect the small business community? And I want that small business community, for example, in the Hunter Valley to build

• 11:39Speaker 00

  ecosystems where not only is the balloon business doing, the hot air balloon business doing well, but that people buy accommodation, they go to the pub, they go and visit a winery, they might buy some booze, whatever. They spend petrol money on petrol, might have to get their car repaired, hopefully not. But, you know, what did you think? What was the process? Did you think it's about a bigger story? Or did you just initially think, no, it's just about putting matching parties together on my marketplace?

• 12:07Speaker 01

  Any startup, it's always just one foot in front of the other. We don't overthink it. I have a passion for small business, always have. My father had a small business. My sister has a small business. Small business is in our blood. Ironically, when I worked for Apple, I was the marketing manager for small business. And when I worked at Anson, I was the marketing manager for business. So I've always had this kind of B to B approach to my marketing. So I didn't overthink it, but it was only in listening to customer stories on all sides that you realise the impact you're having. And it is that impact that keeps us going. Purpose comes from knowing you've made the world a better place.

• 12:49Speaker 01

  But no, I didn't overthink it. Who would have thought that we're now delivering and experience every second, every 16 seconds?

• 12:56Speaker 00

  Wow.

• 12:56Speaker 01

  That is a customer to a small business that they didn't have to pay one of those monsters. And I shouldn't say Google or Facebook, because of course we all. Have to do that, but we're the marketing experts. They can be the world's best hot air balloonist, jet boater, McCramay maker, whatever the experience is. They can be the world's best at that because they can trust us to deliver them customers. And when we went in the COVID time, that was our job just to make sure that they were still there on the other side. It's their livelihoods.

• 13:31Speaker 00

  Covid is like a gift to some, to some extent to business like yours because that sense of being out, particularly if you're from Victoria, been able to reconnect with your community or reconnect with your family or your friends somewhere doing something.

• 13:46Speaker 00

  What was the net, what was the initial effect of Covid on you guys?

• 13:49Speaker 01

  Oh, well, everything dropped off a cliff. But as, and this is way before we had Jobkeeper and Jobseeker and all the rest of it. But we knew our job is to keep these businesses with customers. And so we went out to our community and we said, look, could you invent an experience that was in a box? Could you invent an experience that was delivered virtually? And we published 250 new experiences in about three weeks.

• 14:16Speaker 00

  Really?

• 14:17Speaker 01

  Because we had 700,000 customers sitting at home with a Red Balloon voucher, bored as wanting to do something. So it was our job to keep doing that. And so we absolutely focused, what is our job here? We are shifting the way people experience life. And to do that, you stay really focused on the end game. We shift the way our experience suppliers

• 14:44Speaker 01

  experience life. We shift the way consumers or our B two B customers, our corporate customers who use Red Balloon for reward and recognition. We just, that's our job.

• 14:56Speaker 00

  And when you're, when you put out an APB to all your suppliers and all customers about during COVID period, for example, and you got such a great response in terms of what people could put in a box.

• 15:11Speaker 00

  What is Naomi Simpson doing at that point? Is she standing, sitting back and letting all her CEOs?

• 15:17Speaker 01

  Oh my gosh, no.

• 15:18Speaker 00

  What is Naomi doing?

• 15:20Speaker 01

  We were in a world of panic. Like, you know, I've worked for 20 years in this business and then all of a sudden going. So I'd been through the GFC and people buy experiences in tough times because it's a little bit of lipstick. It makes them feel good. So it's, you know, not as expensive as taking somebody to the Gold Coast. Let's have a, have a day out, you know? So we do find that, you know, we found that even in the GFC that we were, we were growing. But this was different because nobody knew what was going to happen. And so David, who is my business partner, who's the group CEO of the overall Big Red Group,

• 15:58Speaker 01

  which includes Red Balloon, Adrenaline, Experiences, everything New Zealand, all of the brands that we represent. He said, "Nomes need you." And so I went back into the business and I headed up our B two B approach. So all of our corporate went, rolled up my sleeves, got right stuck in. And that gave me an opportunity to speak to our corporate customers and find out what was going on with them.

• 16:24Speaker 00

  We're sending care packages out, that type of thing?

• 16:27Speaker 01

  Yeah.

• 16:28Speaker 00

  That, like, is that what you're talking about?

• 16:30Speaker 01

  Well, I, I was just getting on the phone and finding out what was going on. And what I did find was a bigger, the bigger end of town understood that if, if small business disappears, they don't have any customers. Like, it's an ecosystem and small business is the backbone of this country. And so I found that many of our corporate clients, they got the link between you buy a Red Balloon voucher, that's a customer for a small business. And so that, in fact, quite a tragic story, there was. So Toby, who's one of my colleagues, it was coming up to the first year and of course Victoria had a hell of a time.

• 17:12Speaker 01

  And he made a corporate sale for one of these experiences in a box, which was an international chocolate tasting. Sounds pretty good to me. Anyway, and he made this $40,000 order and I said, oh, with all the logistics.

• 17:25Speaker 00

  Forty grand.

• 17:26Speaker 01

  Yeah, forty grand worth of international chocolate tastings. And, um, and I said, oh, you better call and make sure the logistics and all of that sort of thing. Anyway, he called this woman, she's based in Victoria, in Melbourne. And he picked up the phone, goes, hi, Toby from Red Balloon, just got this order, just want to check on the logistics. And she burst into tears. And she said, I've just called the administrator. He goes, well, can you un-call them because I really want to deliver this. It literally saved her business.

• 17:55Speaker 00

  Wow.

• 17:58Speaker 01

  That's what businesses need is customers.

• 18:01Speaker 00

  And they need someone to connect them.

• 18:02Speaker 01

  Yeah, because it's too expensive to find them on their own.

• 18:05Speaker 00

  Yeah.

• 18:06Speaker 01

  Like the complexity of the channels and the mix and the data, it's hard. So we do, we're their marketing company.

• 18:15Speaker 00

  You're the draw point.

• 18:16Speaker 01

  Yeah, yeah.

• 18:16Speaker 00

  You're sort of like Woolworths online, so to speak.

• 18:19Speaker 01

  I don't know about that.

• 18:20Speaker 00

  Well, in terms of products, like, but you're, you're obviously offering services and products, but you do the marketing and people come to your shelves to see what it is.

• 18:30Speaker 01

  But it doesn't cost them anything. We just take a clip of the ticket, we're an agency.

• 18:33Speaker 00

  So that is variable cost.

• 18:35Speaker 01

  Yeah. So if they don't sell anything, it doesn't cost them anything. But their job is to make sure the experience is excellent. And because we have such buying power, we get additional stuff for our customers, you know, value ads and exclusives and everything on the way through. So there's a benefit from buying for Red Balloon. You're going to pay the same as if you went direct, but there is a benefit and that's because we send them so much business. We say, you look after the experience and we'll deliver you customers. And it's also why in the review process is really important to us because we're not there on the day. So we read them, we look at them. And if if somebody's getting, you know, not good reviews, they're going to get unpublished pretty quickly.

• 19:19Speaker 00

  Which is taken off.

• 19:20Speaker 01

  Yeah, of course.

• 19:21Speaker 00

  Yeah, yeah.

• 19:22Speaker 01

  And then we work with them and say, what's going on? It's actually a funny story. Don't know if I should tell you this, this is in the public domain. But there was an experience supplier who also an amazing, very unique experience that also provided lunch. And repeatedly we were getting feedback. Amazing experience, lunch disgusting, wouldn't feed it to my dogs, you know, blah, blah, blah. And we're like, oh, right. What's going on here? They get unpublished.

• 19:49Speaker 00

  Off boarded.

• 19:50Speaker 01

  The team goes out and talks to them and says, now, what's going on? They said, oh, so there's a problem with the food. And he goes, I know there's a problem with the food. He goes, it's my brother in law. So you're telling me I have to fire him? And we go, yes, you have to fire him. He goes, great. So, you know, so actually having that loop, you know, helped him make a decision in his own business. He knew it was bad.

• 20:13Speaker 00

  So you you actually go up there and then help the vendor?

• 20:16Speaker 01

  Absolutely.

• 20:16Speaker 00

  Or the merchant, let's call them merchants.

• 20:18Speaker 01

  Because we know what's going on. Like, we've got all the trend data. We like, we've literally invented experiences where we know something is selling really well in one state. Well, can you open it up in another state? Can you open it in another location? Yeah, absolutely. We are absolutely driving growth and we're driving employment growth.

• 20:36Speaker 00

  How many, how many small businesses would you have on? I mean, I was gonna ask you, how many have you had since you started this off in the twenty five years ago? But.

• 20:46Speaker 01

  I wouldn't know.

• 20:46Speaker 00

  Now, how many would you have there at any one time?

• 20:48Speaker 01

  Right now, there's probably across all of our platforms, at least four and a half thousand small businesses that we.

• 20:54Speaker 00

  Across Australia and New Zealand?

• 20:55Speaker 01

  Australia and New Zealand.

• 20:56Speaker 00

  Yeah, so and and when you think about it, when I think about it, you would be a very good proxy to find out how small businesses are going.

• 21:06Speaker 01

  I know.

• 21:06Speaker 00

  At any one time.

• 21:07Speaker 01

  Absolutely, absolutely. We are a conduit directly to small businesses. In fact, that's what I write about all the time and I blog about is because we are in such a journey of change right now. I've never seen more change in my whole life. I'm just back from a marketing AI summit in San Francisco. And marketing has never changed more than it has in the last eighteen months.

• 21:34Speaker 00

  Could you explain that?

• 21:36Speaker 01

  So.

• 21:38Speaker 01

  The speed of change and our ability to execute. And it's like it's cyclical. So we used to come up with an idea, we'd execute a campaign, maybe over a particular period. But that would take three or four weeks to execute. So what happened back in the day, we were all generalists when it came to marketing. So we would run full campaigns, we'd be brand managers and we'd run all the campaigns and we'd have different sorts of elements. Then what happened in business is they all became specialists. In our organisation, they're all specialists. So you've got a performance marketing, you've got a search marketing, you've got your CRM, you've got your merchandising, you've got.

• 22:22Speaker 01

  So if you want to run an end to end campaign, you've got to get all those ducks in a line and it's slow. So the whole point about the AI revolution when it comes to marketing is that the data is feeding the execution. And you've gone from having these generalists to re-gaining the confidence over full campaign execution from top to bottom. That's one of the changes going on in marketing.

• 22:50Speaker 00

  And how will that affect, say, your business now? I mean, how will you employ that into your business, what you learnt in the US?

• 22:55Speaker 01

  Well, for instance, let's say there's three inbound tourists who are interested in skydiving. If I've got enough.

• 23:04Speaker 00

  So three inquiries?

• 23:05Speaker 01

  No, there's just three people out there in the wilderness.

• 23:08Speaker 00

  Out there, you haven't got them yet.

• 23:09Speaker 01

  Who are interested in this particular experience.

• 23:11Speaker 00

  That you don't know, you don't know.

• 23:13Speaker 01

  I don't know.

• 23:13Speaker 00

  Yep.

• 23:14Speaker 01

  But if I have access to that data of their intention, then I can serve them something about skydiving in Australia. But I don't want to serve a hundred thousand people something about skydiving in Australia because it's a very specific experience. So that's also, so it's like this marketing economist. It's this cycle and it's the data is informing, informing the execution of any given campaign.

• 23:43Speaker 00

  So do you get, you have to, somehow you're going to scrape something to find out who those three people are?

• 23:49Speaker 01

  Yes.

• 23:49Speaker 00

  Yeah, using AI?

• 23:51Speaker 01

  I love that word scrape. No, it's intention data. You know, we've got to, but that's, that is what is now possible. And also to have it visual and produce that a customised conversation.

• 24:04Speaker 00

  So your suppliers and vendors, you can sort of, your role is to sell that information to them, get more of those suppliers onto your website. So you can actually broaden out the experience of those three customers too.

• 24:15Speaker 01

  Well, it depends which website we're talking about because Red Balloon, we really look at who's the best in the market, the exclusive nature of what we do for them, because we want to make sure they're very successful.

• 24:25Speaker 00

  So you're going to curate that?

• 24:27Speaker 01

  Yeah, we could. Absolutely. That's why people come to us.

• 24:29Speaker 00

  Okay, not anybody's on, just you're going to curate.

• 24:32Speaker 01

  We've got an 11 point checklist on the quality approval and we've got our staff picks and we've got our, yeah, absolutely.

• 24:40Speaker 00

  And reviews, et cetera.

• 24:42Speaker 01

  All of that. That's why they come to us because we know what we're doing. Been doing it for a long time.

• 24:46Speaker 00

  Yeah, yeah. So you're going to, Red Balloon curates this for its customer, for its consumer customer at the end of the day. Yeah. So what is AI going to do in terms of efficiency apart from that example you just gave me? What is, what are they saying in the United States that, which is, that's the centre of all this? That's all the new innovation is. What are they saying in terms of efficiency and productivity? Because we have this big productivity problem here in Australia. And US is way ahead of us in terms of productivity growth. When I look at the numbers that get published relative to our productivity numbers, what are they saying over there relative to what AI is going to do for their productivity environments?

• 25:27Speaker 01

  So when we think about AI, first of all, it's not a tech application. It is a fundamental shift in, in how we behave. And so at the moment, one of the things I'm writing about a lot is the humanness of AI. So intelligence implies that there's some level of cognition, there's not. So, so we need to add that cognition and that is the human element. So at the moment, this is kind of the general, and I literally just published a blog this morning on it. This is kind of how it goes. People are like, oh.

• 26:08Speaker 01

  Oh, I can do this so much faster. I can write one whole article and I can get this done. They're calling that schlop. So schlop is that you're just producing volumes of content without any real human or uniqueness to it, slop. So I can do a lot of things faster. Whatever it is, I can do my expense return finally without, you know, scraping through every single spreadsheet.

• 26:35Speaker 01

  But in business, you might just be speeding up bad processes. You have always done those spreadsheets, so you're just doing them faster. And then you put an agent over the top of it and now it's automated a bad process. So really, as business leaders, we have to look at what is our overall strategy? What did we say we needed to get done? And then apply an AI thinking program to that. And the best way to do that is to understand what people love about their jobs and what they loathe about their jobs. And it's a really interesting case study in the US that I've been talking about, which is a bank. And they know that one of their pillars was growth, one of their pillars was customer, another one, people.

• 27:18Speaker 01

  But how we get most growth from our existing customers? Who has the most contact with our customers? It's our contact centers. Contact center won't touch AI. They'll do anything not to touch it because they're fearful they're going to lose their jobs. Fair enough. So they start this program and they're going, well, what do you hate? What do you love? And if we could get rid of the hate, so what do you hate? Oh, I hate filling in a ticket, hate having to fill up the form, hate having to do this. What do you love? I love chatting to customers online. So when they looked at that and then developed the platform to support, what is it that humans do beautifully? Judgment, design, creativity, that's what we do.

• 28:01Speaker 01

  We do emotional connection, we do relationships. A computer doesn't do that, technology doesn't do that. So it enables those people to do what they're absolutely best at. Since they've launched that, they haven't had one team member leave. So the people pillar also got an outcome and they've also increased their sales because they're real people talking to real people.

• 28:24Speaker 00

  They're spending more time doing what they love.

• 28:26Speaker 01

  They're doing what they love, but they're also.

• 28:29Speaker 00

  That's efficient.

• 28:29Speaker 01

  That's, that is efficient. So, um, so, so the execution, the, everybody's just at the moment flapping around and so excited, but it will settle down. And I truly believe we're actually going to create more jobs and more opportunity. Every wave is, but we're in an absolute time of flux right now as everybody works out. What does this mean? What does this mean for my business model? Why am I still relevant? How am I going to find customers? So we're in a time of flux and it'll take a while to come out of it.

• 29:05Speaker 00

  And, and it's going to take a while to sort of allay the fears that people think that their job's going to be gone.

• 29:10Speaker 01

  Mm hmm. And, and to just re-skill people. So, you know, I was talking about the marketing example before and, you know, now we need to bring people on this journey. They're still smart people who understand consumer experience. And it's just a matter of, of having them realise that they can now take a hundred percent accountability for a full campaign.

• 29:33Speaker 00

  So where, where are your blogs, Naomi? So people might want to watch that and read, listen to those.

• 29:37Speaker 01

  Yeah.

• 29:37Speaker 00

  They listen or read or, uh, listen, read or watch?

• 29:40Speaker 01

  Well, I've got naomisimpson.com, no P of course, and Simpson, um, which is where all my blogs are. But they can also just follow me on LinkedIn, um, because I always announce when I've got a new blog there. My newsletter's on LinkedIn and I've got a podcast.

• 29:57Speaker 00

  Have you now?

• 29:57Speaker 01

  Yeah.

• 29:58Speaker 00

  And what's it called?

• 29:59Speaker 01

  Handpicked.

• 29:59Speaker 00

  Handpicked.

• 30:00Speaker 01

  And that's where I talk about these particular issues that I'm just trying to solve for. And then I share it with everybody.

• 30:05Speaker 00

  Awesome.

• 30:06Speaker 01

  Yeah.

• 30:06Speaker 00

  It's funny how people like you and I, like, we get this sense that, uh, isn't great. We find stuff out and we want to share it with everybody.

• 30:14Speaker 01

  Hmm.

• 30:15Speaker 00

  Have an opportunity to share what we find out.

• 30:17Speaker 01

  Yeah.

• 30:17Speaker 00

  Because most people don't get the opportunity to.

• 30:19Speaker 01

  Well, there is so much stuff.

• 30:21Speaker 00

  Yeah.

• 30:22Speaker 01

  And so I had stopped writing and then about May last year, so, you know, good year ago, um, somebody said,

• 30:31Speaker 01

  Naomi, if you stop writing, who are we going to trust? Apart from, but no, they need trusted voices.

• 30:36Speaker 00

  Yeah.

• 30:37Speaker 01

  They need somebody who's done the deep thinking to look at the implications. And so that's why I started writing again, started speaking again, started doing my podcast again. Cause I'd kind of gone into this non-executive career of being a board director. Whereas actually I think people need trusted voices. They need us.

• 31:00Speaker 00

  So Naomi, N A O M I Simpson without a P.

• 31:05Speaker 01

  Yeah.

• 31:05Speaker 00

  Dot com.

• 31:06Speaker 01

  Yeah.

• 31:06Speaker 00

  Dot U or just dot com?

• 31:07Speaker 01

  Just dot com.

• 31:08Speaker 00

  And the other, the podcast is called again?

• 31:11Speaker 01

  Handpicked.

• 31:12Speaker 00

  Handpicked and where's that on Spotify?

• 31:14Speaker 01

  Yeah.

• 31:14Speaker 00

  Everywhere, all the usual things.

• 31:15Speaker 01

  Naomi Simpson, yeah.

• 31:16Speaker 00

  Can I just, I can't waste an opportunity to talk to you about the budget, if you don't mind. And we're not, neither one of us are being political, but let's just reflect on the federal budget. That's just come out. I'm not sure when this show will be published, but you know, it'll be still relevant, even if it's published in a week from today.

• 31:38Speaker 00

  What do you think about the federal budget? Let's talk about, for a start, discretionary trusts, just structures. Like, how many people?

• 31:47Speaker 01

  So let me roll us back a bit first, okay? I'm really clear about my opinion of what's going on in the budget. And I'm happy to share that with you. If you can hear that I am all set to rock and roll on this. Look, I studied economics, so I get some understanding of how the levers work. What I see in this budget is they're trying to do too much too quickly. And pulling all the levers at once means we won't know what's working and it will put the economy into a state of fear. We do not want our businesses in a state of fear when they're going through so much technical change.

• 32:29Speaker 00

  Right?

• 32:29Speaker 01

  They're already going, oh my gosh, what does this mean for my business? And now on the other side, am I going to make any money? So too much too quickly. So, so having a, you know, CGT, negative gearing, testamentary trusts, all of those sorts of things. It's too much, just why the hurry? They've been given a runway and yet they're trying to do it all in one budget. I think that is very unwise for the Australian people. That is not a political statement.

• 32:56Speaker 00

  So Naomi, what you're saying there, if I could just be clear on that. You're saying that too much, too fast, but more importantly, the net effect on small business community, at least the ones that you're talking to, um, is that they're completely confused and now flummoxed.

• 33:11Speaker 01

  It's completely overwhelmed, completely overwhelmed. Overwhelmed, completely like, are you telling me I've worked my whole life and blah, blah, blah. Anyway, so let's just roll it back and they said, this is for housing. We need to get young people into housing. If you dip deep into that budget, actually there's thirty five thousand less houses going to be built this year than last year. Why is this so? So if you're not fixing the structural issues of what is wrong with the construction industry. So in Victoria, it costs you more to build an apartment than you can sell it for. And that is because it costs eighteen percent more this year than last year to build one.

• 33:52Speaker 00

  Wow.

• 33:52Speaker 01

  Why is this so? Have you looked at the regulations? Like just getting an approval means your, your holding costs are probably five years. So they've got to look at the structural things. The other thing is that Airbnb has had a huge impact on entry level properties. So people of my generation, we bought a little flat. That was our first thing. And then as soon as we either partnered with somebody or we got married or we had a baby, we moved to the next one and we sold that one, put the equity from that in the new one. Now they keep it and they put it on Airbnb. And so it's taken out of our community.

• 34:38Speaker 01

  It's not rented to our community, nor is it providing, you know, a first home for somebody else. So there's some really structural things that I think if they don't look at the structural stuff, all it's going to do is be an impost on people. Look, I could get really quite wound up about this. Let me just say a few other things as a.

• 35:01Speaker 00

  But let's, let's get wound up because I want to get wound up. I am wound up.

• 35:04Speaker 01

  But it's not political. I'm just thinking about the structural stuff. So first of, another thing on, on the CGT, for instance. To tax investment over consumption is to be a disincentive for investment. So every um, the western country with CGT always has the tax rate at a less rate. Because they've already paid the consumption tax, the income tax.

• 35:34Speaker 00

  On the way in.

• 35:35Speaker 01

  On the way in. So you're double taxing, which is an absolute disincentive for people to invest, which means they may as well consume. We have four offspring. One of them thinks he's just gonna spend everything. And I'm like, are you never gonna own a home? And he goes, don't see why. So, so he's just consuming, which of course is driving inflation because there's no incentive. The other thing is many young people, because they can't get into the home market, are investing in Bitcoin or stock market, or they've got their small investment portfolios.

• 36:13Speaker 00

  Small business.

• 36:14Speaker 01

  Yeah, which is now a disincentive for them to do that. So I, again, I just don't think doing all of these things at the same time is wise. You know, if we think about how the Japanese think or the Chinese think they have a hundred year strategy. If we want to move to a different sort of tax system, don't do it all at once. Just give us time to catch up with you.

• 36:42Speaker 00

  What do you think about the narrative that we're doing all these things because we want to fix this intergenerational inequity? In other words, Naomi's got all the assets and her kids, probably not your kids, but kids between twenty and thirty are not gonna have any assets. Therefore, there is intergenerational inequity. You've got too much, they're not gonna enough.

• 37:08Speaker 01

  Yeah, but Mark, I came from nothing.

• 37:10Speaker 00

  Yeah. Well, what do you think about that narrative?

• 37:12Speaker 01

  Well, but the reason why I have what I have now is because I worked really hard for a long time. I invested in myself, in my education. And back in the day when I was at university, thank you, Gulf Whitlam. I got a free education and I never would have gone to university without that. So I believe in investing in education because that's what drives growth in an economy. And so education is going through unbelievable change. So just keeping putting impos on universities and tertiary institutions also is not the right thing to do.

• 37:51Speaker 01

  So the reason why I could get ahead was I had aspiration. That has been taken away. I had an incentive to do so. So yes, if you invest. And the other thing is the sweat equity. I didn't pay myself for the first 10 years. In fact, I'm not sure I still pay myself. You know, it like, if I had got a job, I probably would have been better off. And so, you know, you don't, they, they don't pick that up anywhere. That was, that was an input to the growth of, of the businesses. I think I'm ranting now, Mark.

• 38:26Speaker 00

  No, you're not because, because, and I think you're a, a perfect example of what we won't get.

• 38:33Speaker 01

  No.

• 38:34Speaker 00

  For the future and we won't have red balloons.

• 38:37Speaker 01

  No, look, so.

• 38:38Speaker 00

  Type businesses.

• 38:39Speaker 01

  No, because I, I was on a university board, University of Melbourne Business Economics Faculty for 10 years. And the reason why I was on it was because 70% of undergraduates wanted to own their own business. And they see me as a role model. Well, if she can do it, how do I get that done? She could tell us that road to get that done. And so now it's like, you know what? It's pretty risky starting your own business. And you know what else this has shown us is they can just change the rules anytime they like. So you know what? I might just go and get myself a job or, and so where does innovation come from? Where does the investment come? You want us to build factories and manufacturing?

• 39:24Speaker 01

  Why? How could we? What with, you know, that so, so they're asking us to onshore in this deglobalisation, key infrastructure, and we're going, but how? Like, and the other thing is that Australia doesn't operate in isolation. And people have a choice and we are going to get a brain drain. You want to start a business? Maybe I'll go and find another jurisdiction.

• 39:50Speaker 00

  I'll go to New Zealand.

• 39:51Speaker 01

  Yeah, apparently.

• 39:52Speaker 00

  No, no capital gains tax.

• 39:54Speaker 01

  Yeah.

• 39:54Speaker 00

  Not a bad place.

• 39:55Speaker 01

  Oh, Singapore.

• 39:55Speaker 00

  I'll go to Singapore, much lower rate, we'll go to the US, fifteen percent.

• 39:58Speaker 01

  Yeah.

• 39:59Speaker 00

  Like, uh, and which, by the way, everybody's doing. Well, could I just drag you a little bit into the politics? I mean, just a little bit, just a little bit, okay? And, uh, and you can push back if you want, but do you think when young kids put up a meme showing Albanese and they do it in a sort of semi respectful, funny way of, um, them having to share the proceeds of the sale of the business with, um, the government, they put, you know, put Albanese, his photo up there, but it's a caricature of him. Or it's not real funny, like it's a play, play around with them. And the response that the prime minister says is, look, I'm, I just want to thank very much for picking a good photograph of me. You know, young people and that's your business.

• 40:43Speaker 00

  Um, do you think they, what they think, oh, you just dismissed my, uh, my objection?

• 40:50Speaker 01

  But it's patronising.

• 40:51Speaker 00

  Yeah, patronising me, yeah.

• 40:52Speaker 01

  Yeah, because they're giving him real valid feedback.

• 40:55Speaker 00

  Yeah.

• 40:55Speaker 01

  On how this occurs.

• 40:57Speaker 00

  But in a, they're fairly respectful, they're not just sort of doing the finger to him, they're actually playing, being playful.

• 41:02Speaker 01

  Yeah.

• 41:03Speaker 00

  But at the same time, there's, there's a real problem there, there really are.

• 41:06Speaker 01

  They're not respecting. And, and, and also I just am fearful, any government who actually doesn't understand how commerce works, just how business works. I don't know, uh, you know, I, I came from nothing, like literally nothing and, um,

• 41:26Speaker 01

  I I would be fearful if people didn't think that it was worth having a crack anymore. That's what it was to be Australian.

• 41:35Speaker 00

  Yeah.

• 41:36Speaker 01

  Give it a crack, you know, we invented the Hills Hoist and Google Maps.

• 41:40Speaker 00

  Wifi.

• 41:41Speaker 01

  Yeah, we invented them all. We're a country of innovation. We had to be a country of innovation because we're so far from anywhere. And now they're saying, oh, don't bother. That's how it occurs to us. And, you know, when we look at economies that have done well in attracting innovation, Israel, Ireland, uh, so many of the countries that have just, all they've done is they haven't, the government hasn't invested in those businesses, but all they've done is give them tax breaks. So, but they're providing, they're paying tax and payroll tax. They're employing people. There's plenty of other tax they're still paying. So I just, we, we're operating in this myopic view that we are operating in isolation and we're not.

• 42:26Speaker 01

  And so people will have a choice. And I do think that what allowed me to get ahead has been taken away from my kids' generation.

• 42:36Speaker 00

  If I go back twenty five years or twenty six years and said to you, in today's environment, if you were, you know, you're, you're a much younger self, and but you, you know, you're gonna get the tax the hell out of it. Do you reckon you would have, might have, might have, you might have said, look, I'm not gonna do this?

• 42:55Speaker 01

  I don't know, but, uh, one of my.

• 42:57Speaker 00

  Cause I think that's what they're saying, you know, I think they're saying, yeah, but you, you, you're corporate sweet, you, you, the Naomi, the Naomi's of the world, the Mark Bouris of the world.

• 43:04Speaker 01

  They'll just do it.

• 43:05Speaker 00

  They'll do it anyway, cause they're always gonna do it.

• 43:07Speaker 01

  I don't think so.

• 43:08Speaker 00

  I don't know whether it would or it wouldn't.

• 43:09Speaker 01

  Denmark in the eighties, that's a very long time ago, and their tax rate was seventy percent. Um, you know, in their top income tax rate and, and whatever. And I didn't understand the whole of their tax system, but I did know that was a disincentive to working hard. And, uh, I also know that the, you know, the luxury car tax was like two hundred percent or something. And I remember thinking, you wouldn't wanna drive a luxury car here. And, and, and so I do think it's a disincentive. And I think that, um, given the world isn't so much change anyway, putting yourself out on a limb.

• 43:49Speaker 01

  I I just, I, I, I think people will make choices.

• 43:54Speaker 00

  Do you think the government's brain dead or or?

• 43:57Speaker 01

  I just don't think they have commercial experience. Come and sit in our office for a couple of days.

• 44:02Speaker 00

  Yeah.

• 44:02Speaker 01

  See how hard it is to make a sale. See what we fight against every day, which is the faceless algorithm. That's what we fight every day. We cannot even see our foe. And understand the fear in which it is to be a business owner. People look to us for safety and security and it is very hard. And because of the work we've done for such a long time, we have created incredible employment, not just in our own business, but through our, our ecosystem.

• 44:36Speaker 00

  And they all pay payroll tax.

• 44:37Speaker 01

  They all pay.

• 44:38Speaker 00

  And they, they collect the income tax, they pay the super for their staff.

• 44:41Speaker 01

  Guess what? They pay GST.

• 44:42Speaker 00

  Yep, collect it and pay it.

• 44:44Speaker 01

  Consumption tax. We don't want tax. We want to encourage people to invest in our nation. Invest in growth to create more jobs that right now we're in a state of flux.

• 44:57Speaker 00

  I hope Jim Chalmers can, or the camera picked up for Jim Chalmers, those piercing blue eyes as you're saying that. Because you're very convincing. Mate, I'm serious, Jim, you have to have a look at this. No, but that's, that's the point. They're not consulting with people like you or me or anybody.

• 45:14Speaker 01

  Look, sit and watch what it is like to find a customer, keep a customer, serve a customer, have them come back again.

• 45:22Speaker 00

  And you're still doing it, like me.

• 45:23Speaker 01

  We're still doing it.

• 45:24Speaker 00

  But what, but what, but what do you feel? Because I, I get quite annoyed then when I see Paul Keating come up and say, the people like you and me who are saying these things, well, we're the typical rich older people who have, um, I can't remember his words, but, but you know, we're basically being and, and gorging ourselves on the, uh, the luxury of all these various capital gains, tax discounts, et cetera. Like you, I come from nothing.

• 45:46Speaker 01

  Hmm.

• 45:47Speaker 00

  And I've battled every minute of every day and I'm still doing it in my businesses. I mean, I've got thousands of people work for me and I feel responsible for every one of them.

• 45:56Speaker 01

  There's no.

• 45:57Speaker 00

  Every one of them.

• 45:57Speaker 01

  There's also no set and forget ever in business.

• 46:00Speaker 00

  No.

• 46:00Speaker 01

  You wake up one day, you thought you were gonna know what your day was gonna look like. Didn't look like that.

• 46:05Speaker 00

  Yeah.

• 46:05Speaker 01

  That's not what it's like. And something can come from left field anywhere. I, I, I really believe that if people could work in a small business. I've, one of my first jobs was in a dry cleaner. It was Dennis Dry Cleaner in Camberwell, Victoria, and they, it was a 50 year old business. And, you know, if you wanna understand, like, I got such a lesson in life about just cleaning people's clothes, you know? And I think that that fundamental of just seeing how the dollar transfers through an enterprise and a little bit is left.

• 46:48Speaker 01

  So I just sit in our shoes for a minute. I mean, really sit in our shoes.

• 46:53Speaker 00

  Yeah, we don't actually have a meeting with us, actually come out. That, that's the problem. The problem is the politicians who are formulating all these sort of policies, which they probably think are really important ideologically. But they, they're making decisions based on ideology, which doesn't have any, any contact or any relevance to actually the reality. Reality is important, party.

• 47:16Speaker 01

  Well, look, let me, let me say, they, they, they do it, I believe, with the, the best interests at heart. But I don't think that they're fully informed. And back to my first point, they're just doing too much too quickly. What about change, just changing it by a few percent instead of being so dramatic about it?

• 47:37Speaker 00

  Maybe that's got something to do with the fact that they don't wanna go to an election and do anything else down the track. Or so they're gonna get asked about these things. And maybe they're thinking there's enough time between here and the date of the next election that it might, these things might get forgotten about and that we, and it could be a miscalculation, but that we will forget about it. And I don't think it's gonna happen.

• 47:55Speaker 01

  Not that old, mate.

• 47:55Speaker 00

  Me either. I, I got one final question, just slightly lighter, slightly lighter, but, you know, equally inspirational and motivational for people who are listening. If you look back at your career, what do you think? And it's probably hard to do. What is one of the greatest milestones that you have ever encountered?

• 48:15Speaker 01

  Um, so.

• 48:17Speaker 00

  There are things in life that just keep delivering. The more time goes on, the more you appreciate them. Seventy five years of Penfolds Grange. Once tasted, never forgotten. Let's keep going.

• 48:29Speaker 01

  Red balloon, early days, the, the, um, the millionth customer.

• 48:35Speaker 00

  Oh, wow.

• 48:36Speaker 01

  Just, you know, now we serve millions of customers a year, but when we got to that million milestone and people had heard of Red Balloon more than they hadn't, that, that was amazing. Like really amazing, just that, that first million. Yeah.

• 48:52Speaker 00

  I mean, that would have been extremely satisfying.

• 48:55Speaker 01

  It took 10 years.

• 48:57Speaker 00

  10 years.

• 48:57Speaker 01

  And now we do that in like, not, not months, but yeah. Now the velocity is so wonderful, um, and building that. But that was just a milestone of, my gosh, I think we're going to make it. And I guess that's one of the things we never really have. If you start your own show, you remember your first customer. You remember when there was none, no customers. And at any point, somebody could take the whole thing away. And we are always in that fear.

• 49:27Speaker 00

  Jerry Harvey told me exactly the same thing one day.

• 49:30Speaker 01

  Hmm.

• 49:31Speaker 00

  He said to me that what he fears most is something, what's going to happen? That he doesn't even know what's going to happen. It could just take everything away.

• 49:38Speaker 01

  Yeah.

• 49:39Speaker 00

  And, uh, you know, someone as, uh, successful as he's been, and by the way, I think the same way. Cause when you've come from nothing, you always think something's going to happen. Someone's going to come and take it all away.

• 49:47Speaker 01

  Yeah.

• 49:48Speaker 00

  And Naomi Simpson, thanks, uh, you know, you're in the, you're in the experiences business. But importantly, thanks for sharing your personal experience with our audience today. It's been really good, really great to catch up with you again.

• 50:00Speaker 01

  Great to see you. Thanks for having me, Mark.