In this episode, Legislate meets Rich Woolley, founder and CEO of Paperclip. Paperclip is the UK's best place to buy, sell, and swap. Rich shares the story behind Paperclip and why clear ownership is important for negotiating contracts.
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Charles Brecque: Welcome to the Legislate podcast, a place to learn about the latest insights in trends in property, technology, business building, and contract drafting. Today, I'm excited to welcome Rich Woolley on the show. Rich is the founder and CEO of Paperclip, the UK's best place to buy, sell, and swap. Rich, thank you for taking the time. Would you like to, please, introduce yourself and share a bit of background about Paperclip?
Rich Woolley: Yes. So, hi, Charles. You have Rich here, the CEO and founder of Paperclip, which is a marketplace for buying, selling, and soon to be renting. It was a start-up, but we've been around a couple of years, taken a long and winding road. I started my career as a management consultant at Accenture. Took me a couple of years before realising it wasn't really for me, although it did equip me quite for the skills needed to run a company ans raise investment, so it was a valuable time, I suppose. I took a career break in 2014, generally, just messed around. Started a little app called Small Talk, which is a word, fact, and quote of the day app. That's done quite well on app store, actually, it's got over 400 reviews, 100,000 downloads, featured by Apple seven times, and I haven't even spent a penny on marketing it. So, it was quite a nice little, sort of, project I did when I left. My fiancee runs it now, which is convenient, and Paperclip has always been my real passion. So, it started out as a marketplace for students. I'd had a successful eBay business as a student and I'd always thought there was a gap for student marketplaces, and along the journey of Paperclip, I realised that it could be so much bigger. So, we could try and truly innovate the traditional marketplace model by adding renting, which is quite a new thing, enabled by on-demand insurance, and there's a number of other innovative features that benefit buyers and sellers better than the incumbents. So, our aim is to change the way people think about the things that they own and we're a-,
Charles Brecque: When it comes to buying and selling things on your marketplace, what are, maybe, some of the less known items that get exchanged?
Rich Woolley: I guess, quite, with students, which is most of our user base, it's the traditional stuff like bikes, iPads, textbooks being huge. Anything surprising on there? Not really, but we do get some people who'll try and sell magic mushrooms or things like that and cannabis, which always makes me laugh. Of course, we have to moderate that, but yes. Back in the day, when we first started, somebody swapped their engagement ring for an Android Galaxy Tablet, a Samsung Galaxy Tablet, sorry, and yes, that's a sad sorry, but in any case, I guess, quite traditional, in a way, at the moment.
Charles Brecque: That's fascinating, and so, what's been your favourite moment so far?
Rich Woolley: Favourite moment so far? So, a bit of background. I'm fortunate to be backed by two founders that I truly admire, one is Hayley Parsons, the founder of Go Compare, and the other is a co-founder of Just Eat, David Buttress. Both hugely successful marketplaces on TV, they're household names, all that kind of stuff. They're even brands my parents would recognise. My parents aren't too with it, but in any case, also, actually, they're both Welsh, which is nice, but my favourite moment was when David Buttress took me to the rugby in Cardiff, and I was sat in his box, you know, getting pretty drunk, and noticed in the box next to us was Hayley Parsons. So, I ran over to her box, waltzed right in, went right up to her, gave her a big kiss and took a selfie with her, and that moment I thought, that was pretty cool. You know, maybe I'm starting to get somewhere. I was on top of the world, but I was pretty drunk, but yes, that's definitely the best moment for me, actually. There have been a number of other great moments along the journey, of course, as well. We raised investment on a crowdfunding TV show on Dave, for example, and that was pretty wild and a really cool moment for me, but yet, the one with the rugby was the stand-out moment for me.
Charles Brecque: That's great, and what do you wish you had known before starting Paperclip?
Rich Woolley: This is such a tough question. What do I wish I'd known before I'd started Paperclip? So many things, but the first thing is that I wish I'd known to hire more key senior people earlier, and so, they make like so much easier. So, at the start, I thought, 'What self-respecting industry veteran would want to work with a punk like me?' and so, I hardly mostly mates and fresh grads, but recently, we've had a proper veteran come onboard. So, his name's Keith Parkman, he joined the team about two years ago. 30 years commercial experience, previously the MD of another start-up, and he makes like so much easier. He lends amazing counsel to me, when I'm growing the business and growing as an individual and CEO, and it's no surprise our revenues have tripled every year since he joined, and fingers crossed, he might have actually got us a game-changing partnership this month as well. We're on the final round of contractual discussions right now, but it looks like it's about to be signed, I hope, but yes, the saying is, 'If you think it's expensive to hire a professional, wait until you hire an amateur.' Sadly, that's been very true with me, but yes, I wish I'd hired more people like Keith earlier in the journey. I'd probably have a few less grey hairs and wrinkles today.
Charles Brecque: As a younger or solo founder, it might seem a bit daunting or even an impossible task to bring on someone who'd a bit more experienced, so what tips would you give to a younger founder to convince a veteran to join their journey?
Rich Woolley: Oh, wow, you know, good question. So, I suppose, it's hard to match salaries, of course, when you'e starting out. You might have a couple of hundred grand in the bank and they might be paid a couple of hundred grand a year in their old jobs. So, it's tough, but I suppose, you need to ficus on getting people that are behind the vision, that are willing to take a chance to a year or two, with a clear path of, kind of, advancement as well. So, you can say that you start there, but if you do well, with the certain funding rounds and things, there's more equity in line, there's a salary that you truly deserve, at the market rate later on, and things like that, but yes, I guess that would be my tip. I've only got one or two veterans on my team, so I'm no expect in hiring.
Charles Brecque: That's really valuable feedback, and now that you've just secured funding and entering a new space, what's your plan and vision for the next five years?
Rich Woolley: So, really excited now, especially that rentals nearly completed. We've been building a long time, and the vision have is for everyone around us, everyone around you, to have your Paperclip profile, everything you own on it. So, your bikes, your books, power tools, all listed on your Paperclip profile for others to buy, borrow, and rent off you. When you buy something off someone, it goes from-, I'm sorry, I should start this again, because I've really gone off on a tangent.
Charles Brecque: Okay.
Rich Woolley: So, the vision I have for Paperclip is for everyone around you to have everything they own, their bikes, books, power tools, everything, all listed on their Paperclip profile, for others to buy, borrow, and rent off them, and when you buy something off someone, it moves from their profile into yours. So, the listing never leaves, you can seamlessly relist it, flip it onto someone else when you're done with it, which is the temporary ownership we're trying to instil where, you know, less about buying new and more about buy, borrow, rent off your neighbour, for folks to get away from the whole Amazon Prime culture of buying something new, using it once. I mean, it's quite a compelling concept really, in that, in theory, if you want a power drill today to use for 30 minutes, you could find it from your neighbour, you could get it the same day. So, quicker than any other marketplace could possibly do, you could get it for a fraction of the price by borrowing it, or for free, or renting it for a tenner, and you wouldn't be left with it. There wouldn't be any packaging, any logistics, you know, it's just good, simple stuff, and I think the model of marketplace and, indeed, asset ownership in general is due a rethink. We hop to disrupt that. So, in the next five years, I want Paperclip to be a household name, and especially in the UK with, of course, some foreign expansion, but instead of people saying, 'Just get it on Amazon,' or, 'Just eBay it,' I want them to say, 'just Paperclip it.' I want us to be ubiquitous like that.
Charles Brecque: That's a great vision and I imagine, as a founder, you must have seen lots of contracts. So, what are the main ones that you interact with and what can you tell us about them?
Rich Woolley: Sure. So, there are two key contracts that come to mind recently, especially. One is, so, a prominent TV investment fund has offered us TV ad space in exchange for equity in our next round, which is pretty, pretty alluring. TV's an interesting one. It's good for marketplaces because it helps build trust, when you've seen it on TV. Those ads would run next summer and this would help us become a decent stepping stone on the way to becoming a household name. What's interesting for this is that I'm learning so much about TV ads, demographics, targeting, all sorts, but to be succinct with the answer, actually, retrospectively, I would say that the contract there is fascinating, because they're putting together a bunch of terms and a bunch of things that I'm not familiar with. We're batting it back and forth, and there's a huge element of, like, risk for both parties, in a way. So, we're trying to mitigate that on all fronts and the contract's taken-, it took months and months to get to the stage where we've reached an agreement, but there's still a long way to go as well. Some conditions that need to be met. So, that contract's taken up a lot of time, on our side, and their side. I remember meeting with, it was three of their lawyers, like, and me on a call and, you know, they're just grilling every aspect of the business model and all the assumptions I've made, which are the start-up assumptions. They're assumptions built off assumptions. So, like, it's a bit tricky, but yes, it was a deep-dive into the business and we finally got to an agreement there, but yes, that's a contract I'll probably always remember, and hopefully, it's a good one.
Another one is that key partnership I mentioned, that Keith, our chief commercial officer, is negotiating. That would help us to scale to 22 different cities around the UK this summer, and there's a lot of back and forth of the contract, but if we can pull it off, it will be a complete game changer for us and help us reach targets faster. It's due to be signed any day now, so it's fresh on my mind. The pain of, you know, the back and forth, and I think we got some changes back, like, an amended document last week, the day before the Easter break, the day of the Easter break, 11:00pm my time, and we had a 5:00am flight the next morning. So, really, me and my fiancee, were really getting into it when we were supposed to be packing, but in any case, yes, that's a contract that's, well, hopefully, freshly signed this week, because we need to start planning around it, and so, anyway, those are just two from this year, as you can imagine, you know, so many other contracts along the way.
Charles Brecque: In my previous role, we were based in Oxford, but had a customer in Sydney, and we were waiting for them to sign this big contract, so we were waking up early, going to bed late, so I can definitely relate to the pain, but it also means that the adrenaline is much more intense, which is great. With some of those contracts, maybe internal contracts that you've been creating, what are the common issues that you encounter or areas of friction that you have to overcome?
Rich Woolley: So many issues with employment contracts, contract agreements, sure. So, when we first started the business, all of the companies were under PAYE and UK-based, even if they were in Slovakia and the Czech Republic. So, we had issues with National Insurance and all sorts of stuff, and so, eventually, we just made them contractors, but with, kind of, full-time employee privileges, like holiday pay. Now, getting to this was tough. You've got different requirements in each country and it was a lot of back and forth with lawyers, and with our lawyers, which we had on retainer, but we were taking up a lot of their time. Then, yes, and then, we brought on some other people who were based out of Spain and things like that, and then, it just went too much, really. So, we contracted an HR company to help, and that's just an extra cost, and even that isn't that helpful. They don't know the ins and outs of foreign companies generally either. Loads of pain points with contracts. I guess we overcame them by just brute force and expense in the end, but I wish there was a better way, especially back then, it took a lot of my time, when I could've been doing other stuff, but yes, actually, a bit of a sore topic, Charles, the contracts. They're tricky, as you're no stranger too.
Charles Brecque: Yes. Contracts are tricky, because they're not just a piece of paper. They actually have clauses that are there to help mitigate risk and, ultimately, this is where the negotiation is, it's what happens when something goes wrong, because that's where contracts do get challenged, and that's why you need a contract. We also have half our team in Spain. We haven't necessarily worked with an HR agency yet, so we used to go just down the contractor route, but I do imagine that, as we scale and grow, we'll have to maybe look at other options which will represent additional costs, which, you know, I hate additional costs, but maybe that's a price you have to pay.
Rich Woolley: Yes, certainly share your pain. Yes, it's a trade-off, isn't it? It depends, it saves you time and money in the long-term, I suppose, the short-term maybe as well.
Charles Brecque: Yes, we'll see. So, I'm conscious, Rich, that I've taken a lot of your time already, so I'm going to ask you the closing question we ask all our guests. If you were being sent a contract to sign today, what would impress you?
Rich Woolley: So, what would impress me about a contract would be (a) if it was written in plain terms for once. There's too much convoluted law language, I find. just spelled out clearly, in many cases. (b) if it was promptly sent and I guess if there was a clear and transparent process of round changes and stuff like that, clear ownership on both sides and ways to respond, instead of just going in and the tracked changes commenting and responding. If you're talking about the content of a contract, really, what we're looking at right now with partnerships is things that help us on our mission. So, something to help grow our user base, partnerships like that, or both, ideally, that's what we'd like about the content of partnership contracts, but yes, more broadly, the template of contracts, swift communication, transparency over the process and the commenting and all that stuff would be really helpful, for me. Otherwise, things get lost back and forth, email trails, comments here and there, different versions, it just gets mentally out of hand, quite quickly.
Charles Brecque: Yes, it sounds like you've described legislate. We, obviously, can't help in terms of the parameters that will help you grow your business. To me, that's what you'd negotiate, but what we're really trying to do is use very plain English and standard language in the templates, and the templates have all the ingredients of a valid contract, and instead, what we try to do is move the negotiation to the contract parameters, which you can control, and those parameters can be changed to amend the contracts. So, you, ultimately, just have to change your answers to the parameters, to impact the contract. You've got an audit trail of all those changes as well, and again, you're changing the parameters, not the text. So, that's how we hope you can, you know, create contracts that are robust, faster.
Rich Woolley: That sounds perfect and, yes, at the risk of sounding like a shill, I actually would really benefit from that right now, in the contract negotiations that we've had, and probably could've saved me hours of my life, maybe days, looking back. I'll have to give you a try then, Charles. Off the record, I suppose, it's great founder, kind of, sense of good selling. That's a nice way of, yes, bringing your product in.
Charles Brecque: I have to use every opportunity I can. Yes, thank you very much, Rich, for being on the show and best of luck growing in the UK and abroad.
Rich Woolley: Thanks, Charles. Absolute pleasure to speak with you today, and yes, all the best with yourself as well.
Charles Brecque: Thank you.