Transcript | PULSE Episode 11
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R. Adam Smith:
Welcome to the Pulse podcast. Personal conversations about life, leadership, and legacy with inspiring founders, entrepreneurs, and leaders of industry. I am R. Adam Smith, founder of Wisdom Board. I'm pleased to host this podcast episode. Wisdom Board is a fast-growing digital leadership platform powered by curated content, blue-chip services, valuable human capital resources, and an expensive expert network. Wisdom Board is dedicated to empowering excellence for private companies at the board level.
R. Adam Smith:
I'm here today with Edouard Thijssen, the founder of Trusted Family. It's an award-winning technology platform in Belgium and London that serves hundreds of family businesses and family offices around the world. Very, very interesting governance platform that is very efficient, cutting edge, and growing very fast. And it's wonderful to have Edward today on the Wisdom Board Pulse. Thank you, Edward, for joining us today.
Edouard Thijssen:
Thank you, Adam, for having me. Super excited to do this.
R. Adam Smith:
You've been growing quite rapidly, I've heard, and it's great to be working with you to share your services to our family offices and entrepreneurs. There are many large mass data and cloud services out there, but so few that are dedicated to the more sophisticated elements of the family office or the sprawling multi-family office organization. Maybe walk us through what led you to form this back in 2007 and after your experience with family offices, and kind of walk us through that journey to today.
Edouard Thijssen:
Yeah, super cool. Well, Trusted Family really started as a project, probably over 10 years ago now. So, I was still studying back then. I've always been passionate by technology. I learned coding when I was sort of 16 years old and when I turned 20, my dad sent me to a family business conference. And back then I didn't really realize... I wasn't really educated on the topic, but I'm sort of a next-generation member of a Belgian family that's active in building materials. And so, by going to that family business conference, I learned about the whole family business theory, the typical challenges that family businesses face over the generations. And during that conference, I met another Edward who is part of another Belgian family business, and long story short, we came up with this idea to build a mobile app and online system to manage all the governance processes, all the sensitive information, all the important meetings and decisions in our own family businesses. That's really how it started. And because I could code and I had built some other applications before, the ideas just came together and we started working on that. But-
R. Adam Smith:
That was the Family Business Network International Foundation you're referring to, or before that?
Edouard Thijssen:
Yeah, it's the Family Business Network. It's an international organization. They have chapters in lots of different countries around the world. And so, they are a sort of a learning and networking organization that connect different families together and bring them together. So yeah, we had that idea at the event, and then a few months later we launched this app within our own family businesses, but very quickly we realized that actually a lot of other companies in the world are actually family owned. And so, that's what I would say probably the second phase, where after sort of rolling it out to a few other family companies in Belgium, and then in France, mostly through word of mouth. We did some more in that market research and we realized that there was actually a business opportunity as well, behind our personal need and this idea. So, we raised 1.2 million Euro. I moved to New York where I ended up living five years and we started building this up and scaling it up as a business. So, that's really where the business comes from.
R. Adam Smith:
That's great. In the US, there is maybe 5,000 family offices, but around the world and there is probably more like 15,000. And I've seen some data that shows that the actual wealth or the size of privately held companies around the world is at least 50% of the world's GDP. So, there's actually a lot more family-owned or privately-owned companies than a lot of people think there are.
Edouard Thijssen:
Yeah. It's indeed a huge market opportunity and a huge need. And what's also interesting is how these family companies have evolved over time and over the generations. And that obviously depends across regions, but a lot of family companies today are reaching the second or third generation. So, grandparents started something, they had two, three kids, they got married, they each had two, three kids. And so, suddenly the family's, 10, 15, 20, 30 people, not everyone works in the business anymore.
R. Adam Smith:
Or they're not in the same city, most of the time.
Edouard Thijssen:
They don't live in the same city. They don't live in the same country, they move abroad. And so, basically the whole ecosystem becomes more complex. And so, I think the key question then becomes, how do you stay successful as a family business over the generations? And so, we think there's really two key concepts there. One, is alignment between the owners. So, in every ownership group, you have a group of owners that are active and a group of owners that are non-active, and that needs to work very well together for the company or the family office to actually have a clear vision and a clear mandate to grow, to take risks, to invest, et cetera. And so, that's the first thing where we ask ourself the question where can technology help to manage these dynamics and relations between active and non-active owners.
Edouard Thijssen:
The second thing you have in every ownership group is governance. At one point when you have 10, 15, 20 owners, someone needs to make decisions. And so, most family businesses or family offices will set up a board of directors, an investment committee, or another structure that will help them to make decisions. And then, we started thinking again, where can technology help to make sure that the right decisions are taken. And so, you have meetings, you need to prepare these meetings, you need to make sure that during the meetings, you have the right conversations, you talk about the important things, you need to follow up on these meetings. And also, you need to have access to the right information quickly, wherever you are in the world, to be able to make these right decisions. So, that's kind of what we started focusing on.
R. Adam Smith:
As you know, I've been in private equity for 20 years, and many of our investments have had a family office and investors and various types of limited partners around the world. And it has been quite challenging from an administrative standpoint to manage all that paperwork and reporting and basically gather and organize and facilitate and share that information. Just for our listeners, Trusted Family can be found at trustedfamily.com and their services really cover the gamut of secure technology, from giving multi-user permissions, document management, also analytics in terms of engagement, forms and surveys. I think you have a talent management as well, meeting management, all of that is really interesting proprietary offering for, as Edward's saying, multi-generations. Tell us really, what is it like for a client to log in and use this platform to communicate and collaborate on a virtual global basis? What is that like for them?
Edouard Thijssen:
Yeah. So, I would say that there's different personas in every family, and so there's going to be personas that are the people that, I would say, create and disseminate the information. So, in every family, there's going to be a chair of the board, a CEO, a corporate secretary, or sort of a head of shareholder relations. And so, most of the time they work in the company or they have a full-time job there, and so they're going to typically work in an office environment. They will access Trusted Family from their laptop or normal device, and so they will use Trusted Family to share and disseminate important information. They will create the meetings, they will set the agendas, they will share the minutes, they will share monthly or quarterly sort of shareholder updates, financial updates, K-1's, dividend notices, whatever's being shared in an ownership or board group.
Edouard Thijssen:
So, most of these types of personas will access Trusted Family from their desktop, basically. And then you can have board members and shareholders, and then the wider family. Many of them have very busy lifestyles, obviously, this year was COVID, but in normal times, many of them travel around, they're very busy, very mobile. And so, most of them actually access Trusted Family through a native mobile app or iPad. And so, they can connect securely with touch ID, face ID.
R. Adam Smith:
That's amazing.
Edouard Thijssen:
We offer an application for additional security. And so, wherever they are in the world, they can access information into meetings, they can review important documents, they can take private annotations to prepare meetings, they can electrically sign specific documents that they need like minutes of board meetings or specific approvals or forms, things like that.
R. Adam Smith:
And from what I understand, the price value equation is fairly reasonable given that there is so many different tools within the technology, in a customized interface. How do you go about pricing the service to your clients? Is it as a SAS business to you? Do you approach it as a flat fee business or do you do it per user? What's the best approach these days for onboarding clients?
Edouard Thijssen:
Yeah. So, with different packs, so we have packs, 0 to 10 users, 10 to 25 users, 25 to 50 users, et cetera, et cetera. And so, that's a license fee. Then for certain additional clients, we provide additional services. We sort of assist them with sort of communication and governance projects that are linked to the platform. So, typically we'll have a monthly meeting with them and a dedicated amount of time that's associated with them, because having worked with so many family companies, we sort of know what works and what doesn't. So, we've developed a lot of tools and templates to make it easier for them to get started. And so, in terms of budget, it really depends on the size of the family, but I think most of our clients, they really compare... And it's like you look at every listed company in the world, they have a shareholder relations team.
Edouard Thijssen:
They have roadshows where they travel all over the world to see the investors, to inform them on what's happening, et cetera, et cetera. Most family companies are actually private, and most of the time they don't really invest a lot in board and shareholder governance because again, because it's family, it's often pretty informal. They will have a dinner conversation, give some informal updates, but that doesn't really skate. And so, a lot of clients that start working with Trusted Family, they basically embark on a journey where they want to professionalize the way they manage their board, the way they manage the shareholder and the family. Because they realized that good governance, transparency, et cetera, are really key for the long-term success. Because, if the shareholders or the board members are not aligned, then it can quickly create issues, like this year in COVID, obviously, when things go well, people don't complain, but it's when things are a bit more difficult that the non-active shareholders start asking questions. And it puts more pressure on the people that have an active role. And so-
R. Adam Smith:
And also, since you brought up generations, as most people know, there's a huge generational transfer of wealth and of succession planning in the second and third, or sometimes even fourth generation. We've worked with some family offices in Europe, obviously longer, going back usually longer than US, but there's some third and fourth generation family offices back in Germany, Austria, France, and UK in particular, back to the 17th, century 18th century. So, this is not just for the first level of children, but it can be the third or the fourth level. And at that point, there can be lots of complicated paperwork, trust and estates, real estate holdings, stock bases of both liquid and illiquid holdings, not to mention the current activities, which is all the corporate governance materials of either governing the company or multiple companies, not to mention the family office itself.
R. Adam Smith:
But the other thing is, I think that what Trusted Family, as you've defined the name, really bringing the trust to the family, to use the platform, but also in a way to trust themselves and to work in a more harmonious fashion. I think it's interesting to think that families are not just wealthy people, they're also an ecosystem of the family themselves as people and they're part of a longer legacy that's going on. There's a quote that I found I was looking for it for our podcast, which says that...
R. Adam Smith:
There's a quote I read that says, "That we are just stars in our family's constellation." So, in a way, any one family member, even if it's the billionaire or the patriarch, that one person will be effecting 5, 10, 15 people in the family, and then probably thousands of employees or tens of thousands employees in the holdings that the family has. So, there's a whole ecosystem there that I think is interesting, that you guys serve to make their lives easier and to make them really connect in a safe environment. Is that kind of part of the mission, that what you're building is to bring them together in that environment?
Edouard Thijssen:
Yeah, I think. We really believe that family businesses are sort of a strong actor in the global economy. They have a long-term view. They tend to have strong values, et cetera. But when you look at the statistics only, I think only 10% of family companies stay together for more than three generations because these family dynamics come in and this complexity comes in. And speaking of third, fourth generation families, there are ways to stay successful as a family in the long run but you need to understand basically how to deal with that complexity and build the tools, processes, and governance practices to actually manage that.
Edouard Thijssen:
And so, I think many of the clients we work with, they realize that the role they play in society is very important. Because often, like you said, these companies employ a lot of people, they're integrated in different supply chains, that the world is getting more global. And so, teaching and informing the next generation about their roles, their duties, their responsibilities is super important. And it takes some time, but it's important that they are involved, that they have access to information, that they progressively get interested and that they are developed as future leaders so that they can make the right decisions at the right time.
R. Adam Smith:
Just helping these clients and people that are very busy, that have lots of complicated lives, even if some of them can be luxurious, some of them can be retired, they can be enjoying themselves, but ultimately there's probably one or more operating companies still going on. And there's a lot of the liquid wealth for distributions and cash flows and complicated accounting that can just be coming from one company, not to mention if there's multiple companies going on. So, I think it's great that you built a customized real experience that is dedicated to that customer, because as a user of the more traditional services out there, the Microsoft Box and Google and Slack and Interlinks and Dropbox, One Drive, those are great for the day to days, but they really don't cut it when you're dealing with more complicated matters.
Edouard Thijssen:
Yeah. I mean, that's really our vision. How can we build all the important tools that family businesses need at their fingertips in one easy to use platform that everyone can have access to?
R. Adam Smith:
Just to wrap up our conversation today, tell us a little about your client profiles. What type of clients are a good match and work well and thrive within Trusted Family?
Edouard Thijssen:
Yeah. So, it's very simple and basically any family that is reaching a certain level of complexity, we need to organize themselves. So, most of our customers are sort of second, third generation family businesses that are starting to deal with all this complexity. They've set up one or multiple boards or an investment committee. They have a few external advisors, maybe some family office staff, or some trustees, or some people on the operation side that are helping with that. And they just realized that email is not the right way for them to manage their important information and to communicate with each other. Because the moment you send an email to 10 `people with sensitive documents, you have no clue if people have read it, if people have forwarded it, et cetera.
Edouard Thijssen:
So yeah, most of our clients are sort of second, third generation. Many of them still have a business, some of them have sold the business but are still sort of doing things together. They may have a family foundation or an investment office, et cetera. We've clients in over 25 countries. So, from a geographical perspective, we can serve clients all over the world. The platform is multilingual, I think we support six or seven languages right now.
R. Adam Smith:
That's wonderful. Lastly, tell us where Trusted Family is going and what should we look for in the future?
Edouard Thijssen:
Yeah. Well, like I said, Trusted Family was started as a project, now we're sort of a successful B2B software company. We're profitable, we're growing, we're about 27, 28 people in the team now, and we're really thinking, how do we become the absolute standard in this family business, family office space? And we're actually getting more and more interest as well from other private companies, because there's a lot of other companies that are owned by different people. And it's kind of the same issues. So, I think we're really focused on board and shareholder governance features for sort of any family company/private company in the world. So, that's where we're going. And so, yeah. How do we scale to a thousand customers and then 10,000 customers? That's our focus.
R. Adam Smith:
Wonderful. Well, I'm excited to see the growth ahead. I've enjoyed working with you and Arnold and Natalie, and it's a great team and a great offering. And soon, we'll be meeting in person, I'm sure. Thank you for sharing more on your company. And our members and audience can find more about Trusted Family on www.wisdomboard.co, as well as Trusted Family and keep an eye on their blog and webinars and materials that they send out as well. Ed, it's great to see you today. Thank you for joining.
Edouard Thijssen:
Thanks for the opportunity, and have a great day.
R. Adam Smith:
Pulse is a digital collection of personal conversations with respected private company experts. Pulse listeners enjoy lightening lessons, wisdom and journeys of interesting people. Pulse is a production of Wisdom Board. The trusted leadership brand dedicated to empowering private companies to achieve excellence in the boardroom. Wisdom Board lives on LinkedIn and online at wisdomboard.co. Please subscribe to our podcast available on all major channels, including Apple, Google, and Spotify. I am R. Adam Smith, founder of Wisdom Board. Thank you for listening to the Wisdom Board Pulse podcast.