Tom Dunlop: Why founders should always be paranoid

0:00Welcome everyone to the Naked Founder podcast on location. This is the podcast where nothing is hidden. The episode of the Naked Founder podcast is sponsored by Financial, the home of money for women. Our guest today is none other than Tom Dunlop, CEO and founder of Legal Tech Summise, which has just raised$50 million. Before Tom embarked on his hugely successful business career, he was the European number one badminton player. But he turned his back on his Olympic dream to become a lawyer. It was while working as a lawyer, he saw how technology could speed up legal processes. So he launched Surmise.

0:33Surmise is headquartered in Manchester, but has offices in the US, in San Diego and in Boston. A big welcome to you, Tom. Thank you for having me, Chris. Absolutely. Tom, we always start every episode of the Naked Founder podcast with the same question, which is what do you wish you'd known at the start of launching your business? That's a good question.

0:53Tom Dunlop:I think at the start of the business, most people always look at the next milestone. Like I was just so desperate for someone to give us some money to get going that I think I now look back and go, think a little bit longer term. You know, think a little bit about what the business could be and make those decisions based on a slightly longer time frame, which is very easy to say now. but I think you do rush into trying to prove our revenue, trying to get investment from whoever will give you money, for example. And it's worked out well through the years, but I think there were certain decisions or certain things that I was close to doing or we did and we had to pivot because we were just very short-term thinking.

1:35Tom Dunlop:So I think that's an interesting one that I would have wished I'd known when I started. I think that's a fascinating point. The reason I ask that question first is because it spawns other questions. And we're going to talk a little bit about sport, but we know the statistics, the number of businesses that don't make a year don't make two years. So if you're a start-up and you're talking about five years and ten years, then you're almost taking your eye off the ball of the stats that are against you for the first year, the first two years. And you can relate that to sport as well. So you look at Man United and Alex Ferguson.

2:07Alex Ferguson took over the hot sea at Old Trafford, but he was recognising actually they needed to invest in young players, they needed to invest in their training facilities, even if the results short-term weren't great. And obviously it was touch and go whether he was going to lose his job but everybody knows the class of 92 and everything that happened in the 26 years that followed as well. But businesses are sometimes by their very nature short-termist and they look to the short-term. You're 38 now, you set some eyes up in 2018?

2:39Tom Dunlop:Yeah, it's 2018, 2019. Yeah, so if you could do it again, you would be thinking, what, five years, ten years? I think it's just a little bit more around, like, it's more directionally you're going in the right place. So I, like, even just the basics of what the product did, I was more concerned about, can anyone buy it? Will anyone give us money for this product? Whereas, actually, if I put a bit more thought into, well, in five years' time, what type of product do you want to be? who's the likely customer like where could the products go which if i was honest with myself i knew the answer to that at that time then we would have probably made some different decisions about who we targeted how we made it more repeatable earlier so i think i could probably cut down maybe even a year or two years off the initial years of founding some eyes where we were finding our way by giving that a little bit more long-term thought i'm not talking about doing a financial plan for five years it's directionally where is the business going to play what market how do you want the technology or the customer to evolve with the tech a little bit more?

3:40Tom Dunlop:I think there's a little bit more on that than necessarily just a financial plan. But the funny thing is that the business is starting 2018, now 2026. You've done your Series A, you've done your$50 million raise as well. You've probably got, I'm guessing, a nine-figure valuation for the business as well. But you could have probably shaved a couple of years off that, where anybody on the outside looking back would say meteoric rise. I want to talk to you about sport. OK, but before I do, this is the Naked Founder podcast as well. You can never forget the names of your children. You've got three and each of them have got a tattoo, haven't they?

4:13Tom Dunlop:They have, yeah. I wonder if they get smaller over the years, actually, because I went big with Olivia, who's our first, obviously not knowing how many children I was going to have. And then the second and then third, and that's got to be it because I've not got many arms left. You've not got many canvases left. One of the things about you when I first discovered it, which I thought was amazing, was the fact that you were a top, top badminton player. I always thought badminton players would be quite small, you know, but in terms of quite close to the ground. But how tall are you? About 6 '2". 6 '2".

4:43So you were the European number one badminton player. Flew all over Europe and beyond. Did a lot of travelling with your dad. And could have potentially competed in the Olympics as well. You turned your back on that to pursue a career as a lawyer. okay how good were you and why did you make that decision to leave the olympic dream behind

5:08Tom Dunlop:um as for how good was i i think as a junior so when i was kind of you know in some ways always had something else on the side i was in my education i was doing my law degree i was at college whatever it might have been um if anything that was the the highlight of my career in a lot ways because probably because the pressure wasn't as much on just the career of being a sportsman it was I had other things that I could have been at that point so I think even from a mentality point of view 13 14 yeah probably between particularly between 15 and let's say 18 ish around that time frame um I mean it used to used to be known as being just untouchable in Europe like no there was no one who could get close did you literally have like a 15 match winning run or yeah like it I'd win every tournament, I won tournaments two, three years above in Europe.

5:56Tom Dunlop:It felt like, I felt pretty untouchable at that point. If there was your dart player, what would your walk on music be? I don't really follow darts, so I feel like this is a useless comparison. I'll let you decide. You didn't have a nickname or anything? Do you know what? The one I did have, which was quite funny at the time, and you've just reminded me of it, I played for Geneva. after I kind of quit Chick Ribbon, and they used to call me the killer. So they actually put it, I didn't even know they gave them this name, but because I was quite tall, I was quite aggressive on the court sometimes, I'd quite intimidate the opponent.

6:31Tom Dunlop:They actually, on their website, they didn't tell me this, they called me the killer and I found it and translated it, and that was what they're... Right, okay. Well, I'm going to be in my best behaviour, Tom. It's probably not the best behaviour. So, you're absolutely, you know, you reckon up, win after win after win, tournament after tournament. I bet your parents have got a trophy cabinet at home with every single trophy cabinet and every single newspaper cutout as well. OK, so you could have gone to the Olympics if you'd carried on with that trajectory. Why didn't you? I think you get to this point.

7:00Tom Dunlop:I mean, every sports person goes through this. It's probably slightly different with football. But it was basically the decision of, you know, how are you going to earn money? Like I finished, I did my law degree. It was do I go and do the legal practice course and kind of go on the legal route or do I move to Milton Keynes basically and become a full-time professional? when you get out of the age groups, you're competing against the world's best. There's no, you're not kind of the under-19 European champion. You're just against everyone. And so the life was very different. I did start doing that and I was flying around Europe and I flew on my own at expense to flights.

7:35Tom Dunlop:I'd lose in the first or second round because I was still one of the younger ones on the circuit. How did you deal with losing? Because you spent your entire career winning. Winning, yeah. i think it was an interesting dynamic where i look back now and think about my mindset at the time and because i was almost invincible as a junior the moment i started to lose it did have a big effect on on me personally um i think i i kind of i forgot that sort of what we harness now a little bit that underdog mentality i think i've gone from being the underdog from manchester to being europe's number one and feeling untouchable all of a sudden i was i wasn't the underdog and And then the moment I started to lose again, I couldn't deal with it very well.

8:15Tom Dunlop:And I think there was two things that happened. One, it did affect me, and I did feel that my performance suffered. I wasn't putting as much effort into training. But two, I think I did just have a realization, if I'm honest. I got exposed to the Far Eastern players that were just a lot better. Like, if I did go to the Olympics and I did this big bet, I would never have got gold. Like, not a million years. And it was just a realism where I was, you know, yes, it can be good in Europe. I'm never going to get an Olympic medal probably. So do I want to dedicate the next four or five years of my life to potentially just attend the Olympics and hope that I don't get injured?

8:51Tom Dunlop:And I still managed to maintain being number one. And that wasn't the bet that I was willing to make. So a lot of sports people are successful at sport, but decide that they're not going to pursue that as a career. And they go into business and they're very, very successful at business as well. what are the skills that are transferable from elite level sport into elite level business um i think there's a i think there's a number of different skills that are transferable um i think particularly in the early years founding the business there's that general just grit and that was one of the early things i found was you've got to be capable of being rejected and constantly keep on going back to the grindstone i think when we started to actually build the business one of the biggest things that we've had as a cultural uh was one of our values growth mindset was like a 1 % marginal gain, basically.

9:40Tom Dunlop:How can we just do one thing a little bit better? And how can we empower the rest of the business to, I guess, always be thinking like that? And when I was an athlete, I think I used to think I was probably superstitious with wearing the same socks or the same outfit, or I'd have a certain grip that I'd use because it worked well in a particular competition. But really, they were all just 1%. That particular type of racket, strung at that particular tension, was just one way that I could get an edge on my opponents. And so I was thinking like that, but I didn't necessarily know why or I didn't codify it as being a 1 % improvement.

10:17Tom Dunlop:But looking back now, actually, it's kind of a lot of the mentality I've took into the business and tried to get the rest of the business to adopt that mentality as well. Yeah, I think that's so true. I mean, I am going to reach back behind me and I'm going to pull out. It's like a BMO. It's like a car. So when we're walking around and I noticed this, and it was just, it's got your A, B, C, D, you know, A is for ambitious growth, B is to build a great business, C is customers who love us, D is disruptive innovation. There's no point in you as a founder having a great idea and a culture if you don't relay that to your staff.

10:48This is a 1%, isn't it?

10:49Tom Dunlop:Yeah, 100%. Well, 1%. 1%. We've done those. I mean, those two things kind of coincide. So we've got the grow values, which is growth mindset, respect to there's one team, will to win. Again, heavily influenced by sport, the cultural side of the business. but then I always find that people need a bit of a purpose. Well, why am I here? How do I contribute to the business? It's great that it's a great culture, but how am I impacting the headline business? And so we started to codify our objectives into A, B, C, D. So again, you know, there's the old saying, it's as easy as A, B, C, D. So we kind of have codified that.

11:23Tom Dunlop:Everyone understands exactly what the business objectives are and how they personally contribute to it. And because that is so important that it feeds from the top all the way, all the way down through all your stuff. and you've got offices in San Diego, you know, in Boston, obviously, in Manchester as well. So you became an in-house lawyer at Absence where you met Charles Charland, who's a big character, and he became an investor in Surmise. So what did you learn of a founder like Charles Charland, even before you launched Surmise? What did you glean from him? I think I learned, well, I look back now, like when I was for Absence, Charlie was this kind of, this huge character that when he walks in, he's like a presence in the office.

12:07Tom Dunlop:When he walks around, like, everyone was kind of revering him. Was that six or four as well? It was four as well. So he was a big character, like, physically, but also he had this kind of aura when he walks in as the founder. And he used to just do these kind of huddles where we'd just start talking about something. Everyone would just be really motivated by it. And, like, everything he said was interesting. That was one thing that kind of I've carried through here, where when I started I never thought that that was something I learned from Charlie but as we've gone through the years I've really noticed that actually the how everyone looks at me or anything that I say in the office if I stand up and have a conversation everyone's like potentially listening in and and everything is interesting and that was something that I guess I've really tried to kind of think a lot more about because I know how I used to look at Charlie in that way and I think that's something that I've taken forward.

12:59Tom Dunlop:I think there's other things around what he's done for the business from a, I guess, board level. And I talked about it before, about the fact that think a bit longer term. One thing that Charlie always instilled in me and the business very early on was you've got to be paranoid about the future. Never not be paranoid. Always, there should be things breaking left, right and centre because you're always pushing the boundaries. You should be, if things are nice and going well, then you're not paranoid enough. I call that healthy paranoia. Yes. Like, you know, what are the, you know, routes to market?

13:28What are the barriers to entry? Could somebody offer what you do cheaper? Obviously, AI is not coming up, you know, in a fast lane. It's just ahead of us already.

13:41Tom Dunlop:You know, Samaia's headquarters. Yes. And within Samaia's headquarters is the machine. Yes, the most important part. The most important. The reason you raised that 50 million US earlier this year, it's all gone on this machine. Yes. Yeah, yeah. Let's take a look at machines. We have this machine in every office now. The bevy machine. The bevy machine. We've wasted all of our investment onto this machine. In my day, a bevy. Well, this is the confusing thing, isn't it? It doesn't translate as well in the UK. Yeah, but within this machine, you can choose your, I guess whether it's cold. sparkling yeah choose multiple different flavors i feel like i'm on commission here for this uh and then you can even add vitamins and electrolytes and customize your own water just in terms of i mean because the idea of a water cooler yes you know that's what this is but for the generation yes you know i think it's cheaper than a water cooler you know yeah this team love it the team love it and joy these little things like this though that we because we have it in every office culturally like you come to know what to expect when he goes for some eyes office so there's little things like this dotted around there.

14:49Tom Dunlop:Because you used to be able to, of course, you used to be able to, like, there'd be a, you used to get tins of beer and get cans of beer and coke. Oh, like, on draft and things like that as well. Yeah, yeah, yeah. It's almost become, like, boring now. Yeah. This fascinates me. This here is the elevator pitch. So everyone's got an elevator pitch. Yes. Right, okay. This isn't a lift, is it? This is a room that's made to look like an elevator. Well, I believe this was the old elevator shaft of the building. And so it is, like, I don't know how it goes down where every floor has the same thing but it has the original i think these are still the original doors and the problem with that is though that it's uh completely not soundproof at all so it's pretty useless as a demo booth but it looks great do you remember your elevator pitch oh well i guess back in the day it was very much it's quite simple it was some eyes summarizes contracts in seconds i mean that was like the the headline pitch it was pretty that is a good sure it's a good elevator pitch yes if we come around here yeah we talk about this one team mentality so you've got three offices yep obviously most San Diego and Boston as well yeah this board that you got yeah if I was in one of your other offices I would see that same board that same information right now yes yeah it's a range of things I think we have I mean even got an expiring uh inspiring quote there but i think we we alternate between like information about upcoming events that's on there we have both external and internal events across all offices um so there's calendars that show up we have our grow awards speaking of our values which again the winners of each quarter get flashed up um and we also have let's say things like uh recent customer wins we have shout outs for teams so if there's a particular team that um you know recently our legal engineering team did a particular milestone in terms of the tasks they did that gets shown up So it's really just a share.

16:39Tom Dunlop:So everyone's seeing the same type of, I guess, information across all. Have you just won Southampton? Yes, Southampton was a recent one, yeah. Okay, and obviously Vassori, you know. Vassori, yeah, yeah, yeah. But that's just trying to create a culture. You mentioned about awards. You give£1 ,000 every month, don't you, to the person or the team member who comes up with the best idea that improves the business. Yes, very much linked to the kind of 1 % marginal gains. So it's very much the growth mindset value. So we basically say to anyone, you know, deliberately think of small things in your team that can improve.

17:10Tom Dunlop:Can we automate an email? Can we incorporate a bit of tech that's slightly better? Someone did, someone in marketing did an AI for voiceover for video, which saved us so much time on creating videos. So it's all like 1%. A lot of them don't have costs associated with it, but we literally pay people to come up with these ideas, which enforces that culture. A lot of tech companies have got the office dog. Yes. You have got a nameless giraffe. A nameless giraffe. It's not even got any stripes or spots on it, has it? No. And we never once... So the interesting thing about this, in our last office, it was called the treehouse because we had a duplex office with a treehouse that went through the middle.

17:48Tom Dunlop:And so the designer that came on just saw this giraffe and felt compelled that we needed it. And it's kind of become a little bit of a... It's got no eyes. It's got no eyes. It's got no name, no stripes. Sit on it. Yeah, you can sit on it, yeah. Yeah, you can sit on it. Do you want to sit on it? To be honest with you, I think this giraffe's got enough going against it without me getting away. You've lost all the weight, Chris. Well, I lost a key, though, so I'm sitting and singing it. And this here, probably, okay, because you see a lot of these motivational messages painted on walls. Yes, very cliche.

18:20I'll talk about that as well. So, will to win, will to grow. Just explain, well, you've got the obligatory clocks on the side as well.

18:27Tom Dunlop:I know, yeah, but they're not even until the right time right now, so they were there but they look impressive yes okay you've got the symbol yeah the wall just explain that yeah so i think i mean these have all kind of evolved with us over time so when we when we first started in the small small office with like three or four of us we got this really almost like novelty sized gong so that any deal because it's such a big moment and we'd make a really big thing we'd all gather around it and so even though if i'm honest now because deals are regular they don't necessarily do it as much but we are in every office we have a gong for that for that reason it's just been something that's built up culturally obviously the three offices through different time zones um we did this with boston because actually people just couldn't work out the time difference so in every office we have the clocks with all the different time zones on as well um and then the grow wall we we had one in the last office that was obviously again it is i mean everyone knows them so you don't necessarily need it on the wall but we've now took this this was hand painted um but we now made that into a mural that we're now putting in the other two offices as well so again it's just creating consistency across across the different offices of these little like kind of cultural things that kind of knit us together really.

19:36Thanks very much G-C-Han. Of course.

19:38Tom Dunlop:Cheers Chris.

19:41Okay so you're at AppSense and you also work for Zuto as well okay the idea for Surmise, the way I always explained it was this, is and I've got this just moving house you get this weighty contract and it's got a load of like indices in there and stuff like that. You're just trying to find the line that's really interesting. By selling a company, that contract can be this big, okay, and you're looking for that one line that could cause you a problem or not. You recognised, actually, you were having to go with a highlighter, go through it with your trained legal brain, and you thought technology must be able to change that.

20:18And that's how Surmise was born.

20:20Tom Dunlop:Exactly that, yeah. And probably at the time, obviously, I wasn't technically aware of how you'd solve that problem. So if I'd known probably technically how challenging that was to do with a very unstructured contract, like it's basically like just very structured text and making sense of that is a very hard problem to solve. But it was just a huge problem that affects every business. Like in a consumer sense, if you sign up to certain conditions, you're protected by law because you're a consumer. But in business context, the reason you hire lawyers is because you get no protection. If you're a director and you sign up to a contract of the business and it says i mean this is extreme i always use this example but um you have to walk my dog for the next year when you sign that contract like you've got a contractual obligation you're not really protected by the law because you're a direct business so it's really important that people understand what they've signed up to and it was just so manual and to just try and find it no one if everyone would file away the contracts in a filing cabinet they'd only ever look at them if something went wrong but there's so much hidden value in there as well that people weren't realizing so that was the problem that i had and almost the tech solution wasn't really what i didn't i almost didn't care how we solve it we just had to create a product that could summarize the contract really quickly and that was what we did and the business has iterated more than once since and uh you pivoted as well the business today some eyes today no resemblance of business in 2018 just describe some eyes today yes well i guess as a product um we very much focused on I guess dealing with corporates or in-house legal teams that's kind of where we focused and with the products itself has really gone from being a it's almost like a point tool that solved one use case to anything to do a contract so what we did early on was embed our technology into tools that people use so think Slack, Teams, Outlook, Gmail, Salesforce, HubSpot whatever it might be and whether you're creating a contract we have a chatbot that can create a contract in Slack and teams or in salesforce but whether you're reviewing a contract we do ai redlining we can do the intake where we you know if you're sending something to legal we we manage that process and then all the way through the review negotiation and then once it's signed we summarize and store all the signed contracts so it's not frictionless it's frictionless throughout no matter what application you're using and also whatever the interaction is and that's kind of what our um product is today um so you mentioned uh or we've spoken before the us is your biggest market.

22:45I think you get twice as much revenue from the US as you do in the UK as well. You opened up in San Diego because of the different time zone as well. You know, the obvious place to have gone would have been LA or San Francisco. Was it just a financial decision?

22:59Tom Dunlop:No, I think it's a very intentional decision. So we, I mean, the same with Boston. The obvious thing for us really was probably New York because there's not a direct flight to Boston, which is very frustrating for Manchester. New York was kind of where everyone just kind of naturally is set up on the East Coast. But the big thing I was very conscious of was culturally, we have, you know, we talked before about the grow values, ABCD, this kind of harnessing of the underdog mentality. And I didn't want to lose that. And also we're sending some of our own guys to Boston. So we chose that city because it felt culturally very similar to Manchester.

23:32Tom Dunlop:It felt like everyone shared a shared values, shared beliefs. There was kind of culturally, they walk off a plane and they feel like they're in Manchester. That's kind of why we did Boston. So when we look to the West Coast, don't we're wrong, there's very few places that feel like Manchester in California or anything. But San Francisco was very engineering heavy. It was all about, it's hugely expensive, yes, but it was more about, there was this kind of, not an arrogance, but it was a different culture in San Francisco than it is anywhere else. LA very media heavy, entertainment heavy. San Diego is this kind of, almost like the little brother, little sister to both cities that had a tech scene and biotech as well, and it was, which is good for sales.

24:14Tom Dunlop:So there was a number of different reasons why we chose San Diego over financial. And a lot of it actually boils down to the cultural values that we want to maintain as we build a global business. So my is about 100 staff now and eight figure ARR. so all the metrics being ticked as well um your funding story is fascinating in terms of pre-seed c series a series b as well and and we're talking about resilience in sport and i think you've done about 250 pitches and you've got four rounds of investment so not every pitch has worked clearly the numbers are always going to be against you but in order to get that investment if you were to change your narrative so when you're trying to raise pre-seed and chow charlan came on board Is the story all about you as the founder or is it all about the opportunity that the business could potentially take advantage of?