GyG founder reflects on diners learning the difference between black beans and olives

When Steven Marks started his Mexican franchise, Guzman y Gomez, in 2006 many customers mistook the ubiquitous black beans for olives.

Guzman y Gomez chief executive Steven Marks.

When Steven Marks started his Mexican franchise Guzman Gomez in 2006, most people didn’t know what black beans were.

“When everyone thought they were black olives … that cost me a lot of money,” he told a crowd at Morgan Stanley’s Australia Summit in Sydney on Wednesday.

When billionaire tech boss Richard White started WiseTech in 1994, he had no idea how to raise capital.

“That was very helpful because I had to be profitable from day one to pay wages and to keep the business growing,” he told the summit.

Venture capitalist Paul Bassat, who was working as a lawyer in 1995, said when a friend had called him saying he’d started an internet company, he had had no idea what he was talking about.

“I didn’t know what the internet was in ’95 when he rang me up and said he needed a lawyer,” Mr Bassat told the audience.

All three founders, who are each responsible for starting billion-dollar companies in Australia, were invited to share the stories and hurdles they faced.

Mr Bassat, who today runs venture capital firm Square Peg, is the founder of ASX-listed online jobs marketplace Seek. When he first set out to build the business, he had had his eye on real estate.

“But we pivoted before we even started … It was a smart pivot as REA is only a $22bn-$23bn company,” he said, drawing a laugh from the audience. The sheer power of real estate giants Ray White, Century21 and Raine & Horne has been daunting.

“Marketplaces operate best when you have fragmentation on both sides and we were nervous of the franchise guys,” he said.

Wisetech chief Richard White on stage with GyG’s Steven Marks and Square Peg co-founder Paul Bassat.

Instead, Mr Bassat went after the so-called “rivers of gold”, a $100m employment advertising market that he said print news­papers including Sydney Morning Herald, Melbourne’s The Age, Brisbane’s Courier Mail and The West Australian had held on to tightly.

“It was very clear that we’re going to move from print to online marketplaces and we thought it was a once-in-a-lifetime opportunity to build that marketplace,” he said.

For Mr Marks of Guzman y Gomez, the plan was to reinvent Mexican food in Australia.

“I said to my co-founder that I’ve got the next big idea: we’re going to reintroduce Mexican food to this country,” he said.

That was 2006. Nine years later when he went to open the company’s first drive-through restaurant, he was met with some ­opposition from his board.

“They said, ‘What are you doing? Everyone is going to think you’re fast food’. I said, ‘We are fast food’. They said, ‘Everyone is going to think you’re McDonald’s’. I said, ‘No, McDonald’s isn’t food. We are the McDonald’s of this generation’,” he said.

When Mr White started his logistics software business WiseTech, he had no idea the business would expand beyond Australia’s borders.

Wisetech CEO Richard White.

Mr White said to scale a business like WiseTech, founders had to constantly think about growth.

“We have a whole war room of capabilities that we’re working on that will allow the business to grow and grow very substantially over the very long term,” he said.

WiseTech used its acquisitions, of which it had made almost 50 over the past few years, to get on the ground in different countries.

“We’re actually building a globally scalable product,” he said.