Trusting your gut and taking chances with Daniel Walker, Founder of Zegal

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Daniel Walker shares his experience on making a mid-career switch to be an entrepreneur with Philipp.

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Episode transcript

Philipp: Welcome to another episode of In Your Best Interest, your personal finance podcast. I’m your host Philipp Muedder, and today we will be chatting about entrepreneurship. One of the reasons we started the podcast was to bring you stories from interesting people that have forged their own path and created businesses from scratch. So I have invited Daniel Walker on the show. After working as a corporate and banking lawyer for about ten years, Daniel Walker created Zegal in 2013. Zegal’s vision is a world where the business of law works for everyone. Companies that are connected to knowledge and who use workflows to run their organisation are smarter and more profitable. Their mission is to make this the new normal for millions of businesses across the globe.

Founded in 2013, Zegal is the fastest-growing legal tech company operating across the Asia Pacific, as well as Europe. Today, business users and lawyers across the globe trust Zegal software to solve legal problems in an affordable and efficient way. Zegal is led by the talented team of 60 employees and has offices in Hong Kong, Singapore, Nepal, Australia, New Zealand and the UK. Zegal has been featured in the New York Times, Forbes and Huffington Post, and was recently recognised in the South China Morning Post as an emerging legal tech company in the artificial intelligence space.

So Daniel, from your intro, one can say that you really have been working hard building a business over the last seven-plus years. However, I would like to start by going a bit further back in time and get an understanding of where that entrepreneurial spirit came from.

And I think that could be super interesting for the audience, same for me, always interested in learning more about people's background. Because I think that tells us a lot about where you are now. So would you mind sharing what life was like growing up for Daniel in the UK?

Daniel: Sure, thanks very much, thanks for the introduction as well. It makes this sound far more impressive than I’m sure we feel like.

Philipp: Sounds pretty impressive, yes.

Daniel: I think most of us suffer from some sort of imposter syndrome, it's always embarrassing to hear your stuff read back. Yes, look, I’m a long way away from where I grew up as we were talking about before we joined the podcast. I grew up in Cheshire in the UK, formerly Merseyside before the postcode changed.

The postcode changing in Merseyside was probably the most talked about and fantastic event of Merseyside's history. We went from being an L for Liverpool to being a CH for Cheshire, and our insurance dropped by half the next day.

Philipp: Are you a Liverpool fan?

Daniel: Liverpool fan.

Philipp: Yes.

Daniel: Actually, I grew up when Liverpool were great the first time around, and funnily enough, I dug out my Crown Paints Liverpool kit for my son who's 5 this year. And he donned that for the first time 12 months ago in all its glory, and Liverpool, of course, finally are a team to talk about.

Philipp: Yes, came through.

Daniel: Yes. I grew up in a very ordinary, middle-class family in a place called The Wirral, which is very near to Cheshire. My family was from a farming background. My grandfather passed away quite young actually, and because of that, the farm was sold on at a time when the northwest of England had not kind of gone through the economic growth that it has now.

And so that farm was sold at a price that would be unimaginable now and was converted immediately into a luxury spa. And then from that, it was then funnily enough bought by the first winner of the UK lottery. A very young winner, who was in his teens. And then turned, I understand, he then turned part of the property into a quad biking empire and started quad-ing around on it.

So it's had quite a far more interesting history since we sold it than when it was part of the family. My parents divorced at quite a young age, and my father was quite a serious guy. He worked in quality control, and so, therefore, he was meticulous. Had a job from leaving university to pretty much the day he passed away, paycheck to paycheck. My mum was completely the opposite, my mum was a kind of late-stage hippie go-getter, who ended up running a dance company in Scandinavia. Teaching unusual instruments like the hurdy-gurdy, and running dance events in disused castles and the like. So they were pretty different people, and it was probably a good thing that they went apart.

Philipp: Yes, sometimes it's okay if you know you're growing apart, right? Yes.

Daniel: Absolutely.

Philipp: Yes. So then you grow up in this environment, so UK, different parents with different backgrounds. How did you then, when were you the first time exposed to managing your personal finances even, right? Was it as a kid, did you get an allowance that you have to live with? Did you get a job already when you were pretty young?

Daniel: Yes. So I mean, when I was a teenager, I was quite fortunate actually. I sort of managed to quickly figure out and leverage the fact that when you've got separated parents, you get two sources of income. That took me through from the ages of 13 to 18 certainly quite well. I also figured out that you could get in trouble twice in a week, and always be fine in one location.

So it was easy to start ducking between lines. In those days in the UK, and still in Scotland now but not in England, the university was funded pretty much by the government. And if you could figure out a way to get that funding, because for example one of your parents had a lower income than the other, then that was a good thing to get.

So as well, we managed to get our way through university the first time around with state funding. So I was very fortunate. Actually, I was probably one of the last generations in the UK whose parents owned their houses, and we got school paid for. And so we didn't leave university burdened with a whole bunch of debt.

And that of course meant that I could do not just one degree, not just two degrees, but I ended up doing three degrees because frankly, it wasn't difficult. I was also very fortunate in that my grandparents, my grandfather was a consultant paediatrician. They were quite wealthy in their own right, and they were able to pay for parts of university for me.

So it would be utterly remiss to say that I struggled as a child. I think the word middle class was very different in those days than it is now, and it was less of a struggle for middle-class people than it probably is.

Notwithstanding that fact, I still, like all university students in the late 90’s, early 2000’s, spent way more than I had coming in and needed to have a job. So I ended up probably spending too much time working during my degree as well, which probably didn't help the situation. But that was just simply a fact that I grew up when Blur and Oasis were playing in the charts, and it was pretty much the rigour to do more partying than it was to do working.

So yes, I probably spent some uniformly more than I earned for a large period of my youth and early 20s. And it was pretty much standard to look at a bank account in those days and to figure out that if you had minus £1,300, that was £200 more than the limit and therefore you had £200. There was never a mentality that you'd have more than 0; it was just how far off the point when the card gets eaten.

Philipp: No. I can tell you; this is exactly how mine was as well. And again in Germany, university is still quite almost free. So I’m still quite lucky, but I was in the US for high school for one year, and then I made a lot of friends. And after college, I actually moved to the US and all my friends, they still. Some of them we're mid-30s now, they're still in that, right? Because it's so crazy, and there's such a disadvantage to actually start anything because you always worry about oh, I already have that, I can't even go to open the business; I can't do what I want, you're almost just stuck there, right? But you made some good points. You said middle-class household, but you were able to go to university, you did get three degrees, right? What was your decision making in going to university? Like what did you study first of all right, and what pushed you towards that.

Daniel: Yes. So for somebody in my position at that time, doing GCSEs and A-Levels and then going to university was a given really, it was just kind of what you did. It wasn't do I go to university or not go to university; it was just what will you do when you get there. I chose to do management and French in my first time around. Obviously, I ended up going on and doing law later on. It was a factor of the fact that I was doing business and French at a level and that became management at French University. A big cohort of my kind of friends from the first time at university, would all have gone to work in management consulting. It was the thing that was done in those days. Unfortunately, we graduated in 2001, which you probably know if you don't remember, was not a wonderful time to graduate. It was a time at which folks like Anderson were exploding, and obviously the dotcom boom. So we graduated into a pretty tough environment.

Philipp: And I think that's a really good point for listeners to understand, especially if you're starting to graduate now. Because you're kind of in that spot again, right? It's in uncertain times. I graduated in 2008, not much better, right? And with a finance degree. So it's the same thing, so you have to adapt, and you have to adapt to the environment at that point in time. It's not, they happen, and you can’t tell, right? 2001, 2008 now we had 12 years, but you still have to deal with it. I went and did an internship for a year, got paid nothing in online marketing which has nothing to do with finance. But you had to adapt, right? So it's quite tough. So yes, so what was it then for you?

Daniel: Well for me, to go back to 2001, there was still a kind of a burgeoning tax scene in the UK of businesses that were trying to copy the US. And some of the big ones then that are still around now things like eBay, which were big in the UK, QXL, Lastminute.com.

QXL actually introduced me to technology, because QXL was basically a UK version of Lastminute.com, which, for those of you who don't remember, basically sold things at the very last minute next to nothing. The business model was fatally flawed, to the extent that we bought, I had not a dollar to my name at this point and was straight out of university trying to figure out what to do. And there was a holiday going for £1 to the Algarve, I’d never been to Portugal, and it was probably not a great place to go. But I thought it's £1, so I paid £1, and I got it 60 minutes later.

So, my father and I had our one and only holiday together my entire life, where I took him to the Algarve for £1. He spent the whole trip telling everybody we'd only paid £1; they spent quite a few hundreds of pounds. And so we had no friends on the trip when we were playing bingo in the hotel hall. We weren't the most popular. But it got me interested in retail, and it got me interested in the online space, which hadn't completely crumbled but was sort of crumbling. And oddly, I then, a few weeks later, ended up interviewing for my first-ever job, which was a job at QVC, which is a US shopping channel. And I ended up becoming a software buyer. So my job was to buy software just to be sold.

Philipp: For them to be sold.

Daniel: Yes, and then I actually do some of the selling myself on telly.

Philipp: Oh wow, you've been on TV then.

Daniel: So, fortunately, and I always say, fortunately, I predate YouTube by a very few months. So there's very little footage of those dark days where I actually was on TV selling software. But famously, I did a few things that are actually quite fun. One is, people like Microsoft did not want to know about people like QVC.

QVC was the determined face of selling makeup, or vacuum cleaners, or junk for your kitchen, which you did very well and made a lot of money. They certainly weren't going to put premium brands on there, and Microsoft didn't want to know. But there was a really interesting guy that was running marketing for the UK at that point, and he and I got chatting, and I said I’ll bet you, I can sell a million quid worth of software in one day.

And he said well obviously you can't, and I said bet I can. And we used to have a product every day. We'd have one product called, Today's Special Value, it was pretty straightforward. At midnight, you had a whole bunch of boxes in a warehouse. And a bunch of guys went on a telly and said “If you buy the product, we've got in our warehouse between now and midnight tonight, then we'll give you 20% off the price, and it'll never be this cheap again; it'll go by 20% tomorrow.”

So, the incentive is there to do it. You're given a bunch of minutes throughout the day to sell it. So, a quarter of an hour slots at midnight, and then say 6 am, and then midday, and then the kingpin hours are kind of the early evening when people are really watching TV. And to equate TV shopping to normal retail, inches of space in a shop equate to minutes on TV shopping, and obviously certain times a day are more important. There's the drunk hour at 9:00 pm when people start buying gym equipment; there's the depressed hour...

Philipp: So you learned a lot about people's psych too.

Daniel: You learned a lot about it, it's quite interesting. Anyway, by a quarter past midnight, we sold a million quid worth Microsoft office. It was incredible. And so Microsoft woke up, and I think that partnership ran way beyond me leaving. But it was the single biggest sales event for Microsoft software in the UK up to that day; I don't know whether it is now. I’m sure it has been beaten, a million quid’s not a lot of money these days. But 20 years ago, selling a million pounds worth of software in 10 minutes was a big deal.

Philipp: That's crazy; that's an awesome story. Because QVC, actually their German headquarters are in Dusseldorf, right?

Daniel: That's absolutely right, yes. I used to go across.

Philipp: Yes. Funny story, this is a long time ago. But my stepmom, because my dad is an optometrist, so we have stores with glasses, right? So he put her on there to sell glasses for like, I don't know it only lasted like two months, but it was actually quite successful, because they just bought them in China, got some product together and sold them, because that's why I knew about QVC, right? And obviously, it was quite popular in Germany too, right?

Daniel: Yes, it was. I think actually the German operation did better than the UK operation; I have a feeling. But I mean obviously, America was the mother. People like Joan Rivers were killing it. I mean Joan Rivers made more money out of QVC than she ever made as an actress.

Philipp: They became like stars almost, right? Yes. No, it's crazy.

Daniel: Absolutely.

Philipp: Good. That actually leads me to my next point. You did university management and French; you go to QVC because that's what was available, right?

Daniel: I had a lot of fun.

Philipp: You had a lot of fun there that means you got your first paycheck, right?

Daniel: Yes.

Philipp: Do you remember what you did with that very first paycheck?

Daniel: It was a small paycheck. My first paycheck, I was earning £15,000 a year, which after tax in the UK was about £1,000 or maybe slightly more. My rent, even in those days in London, we were living in between Fulham and Chelsea, and I worked on Chelsea Bridge, this is not a cheap part in London. I think my rent was a hundred quid a month, which is about as cheap we could get away with. I think after eating, I would have run out of money. And then basically back into that overdraft.

Philipp: Yes, but that's life.

Daniel: We might have been at zero.

Philipp: Zero is like a win, right?

Daniel: Exactly.

Philipp: Absolutely. So you did QVC for a few years I assume, but you said you have two more degrees. So what made you then switch careers? Or if I assume you did, because you did mention law, and we talk about your business nowadays soon. But yes, so what made you switch?

Daniel: My grandparents made me switch. So they said, I mean they actually had a huge influence over my decision-making. And they I think looked upon what I was doing with interest, but they felt that there was probably more in me than that, and I think sometimes you have to listen to those who are older and wiser. It's difficult when you're in your 20s to listen to anybody. It's not until you get to my age now that you realise that people who are older than you are almost always smarter than you, almost without exception. And so actually I did, my grandparents said “Look, what are the things that you like about the job you're doing?” And I said well, “I actually love the entertainment factor,” and they said “Okay.”

And I said I actually love the negotiation and the deal-making piece. And what are the parts that you actually enjoy? And I started to look into it, and actually, I felt that the negotiation piece was quite a lot of fun and interesting, and that drove me into doing my first law degree and then the second sort of after that. So, that was really the lead into it. Obviously, time flushing forward a long time, you'll see that one of the key things I enjoyed about QVC was the entertainment part. You're not going to find a lot of that in law, unfortunately.

Philipp: Yes, you don't. But like you still have employees, right? And like you can speak in front of people. Like whereas other people, maybe they're just like more...

Daniel: Don't get me wrong in what we do now absolutely every day, but I think in law firms, it's probably not quite as prevalent.

Philipp: No, absolutely. So you did your two law degrees, both in the UK as well?

Daniel: Yes. Back in the Northwest, back in Manchester. So that meant moving my wife and I back up to Manchester, and change of life, change of pace. Never looked back, wouldn't want to be in London ever again. I think it was a good place to study a great place to be young. But at the age of 24, I was ready to leave London. And I think London can be a fantastic or a very cruel place. And I think people either cut their teeth there very quickly and they're going to be there for a long time. Or they are going to hate it and drop out. There's a very thin trail of people that kind of struggle through, but most things are right, it's not a great place to be if you're not doing everything that you want to be, and you need to be there. So I was very happy, and it was just really interesting getting back to Manchester. Because the first thing that changed for us was, we lived in this awesome apartment, and we went from basically sharing a house with four people, to my wife and I having our own place.

We had money every month, my wife had a job, but I was at university, but we still had more money than we had combined in London. And it was just such a change, and we started hanging out again with friends in Manchester, who had always been in the northwest and never gone to London. So of course, they kind of accelerated past where we had from burning money in London over the last few years. And it was just really nice, it kind of opened our eyes to the fact that you didn't have to be struggling in a big city.

And so that was a really, just a really enjoyable period of time, which then led to me getting a job in a kind of first-tier law firm, but in an office in Manchester. And again, a huge benefit for anybody doing law, if you can get yourself into top tier law firms, but not be in the big city, you end up really benefiting from the salary quite quickly.

Philipp: I think there's a lot of like websites now, blogs even talking about Geo arbitrage. It's basically like you're finding these jobs, and I think we're talking in 2020, right? So just for the record, if anyone listens to this, I don't know ten years’ time. But this is probably the time that all of these changes, and you can work remotely, right?

You can work for top companies, and you don't necessarily have to be necessarily in San Francisco or New York, Tokyo, London, right? These expensive cities. And I think employers are realising this; employees definitely are realising this, right? Because there's a lifestyle as well, right? Some people like it, all right.

I think the big cities have its pros and cons as well; I lived in some. But we're talking from Singapore right now, so it's not necessarily the cheapest place to live. But it also has its benefits, right? But I think 2020 would definitely accelerate this happening that you can.

Daniel: Unbelievably so. Yes, I mean it's hard to really imagine how this will progress. I mean there's benefits and drawbacks, I mean we're off topic a little bit, but there are benefits and drawbacks to this from an employee's perspective of course. Because the ability of an employer is to find talent at a different pricing is now clear.

The benefit, of course, is that we hope for employees is that flexibility will be a benefit which comes through, and actually, the pricing of the two things will kind of make sense. But yes, look in those days there was, and to a large extent probably still is two salary sets. Really there was a salary for London folks doing the same job; there's a salary for the same new junior or trainee lawyer in one of the more parochial sorts of parts of the UK.

But that salary was still against the cost of living, even if it was significantly better. You probably would take half the salary, but you'd probably have twice the standard of living in those days. It was just incredible. So we really enjoyed it, and we ended up staying in Manchester for quite a long time.

We were there during the heyday of Manchester growing, it went from before we got there actually in a few years before we got to Manchester, but it had been a city which had famously less than 100 people who actually lived in the city at one point to being now, a city which is one of the fastest-growing in Britain. We bought our first place in Manchester; we bought a flat there in an old industrial mill.

Philipp: It's amazing now. People who are listening and haven't visited Manchester I know it's not on many people's list, it's actually pretty amazing. My wife is from this area, so I go every year at Christmas. But I’m pretty impressed even year over year going back; it's pretty amazing.

Daniel: I’ve not been for many years now. But again, on advice from my grandparents, we bought our first place there. My granddad said look; industrial mills are probably going to be around for a long time. If you buy a place in an industrial mill, it'll probably still be there in a few years’ time. So we took his advice.

Philipp: Good advice, right? Good advice. So you move to Manchester, you go to university, you get a job at a tier-one law firm right in the UK. Fast forward a little bit, how did you get then to Asia, was that through one of these law firms? Or this is something that maybe you and your wife always wanted to do?

Daniel: Yes. So I’d spent most minutes of my life trying to figure out ways to not be in the UK, and to be in sunnier or funnier places. During my French degree, I’d lived in Nice and Antibes south of France. After university, before I sort of managed to get my way into QVC, I’d done a spate of telesales for a computer magazine called PCMag over in Belgium. So I've been living in Belgium, and I also then worked in Amsterdam for the same company, drawn by the idea of driving a car and living in a nice townhouse in Amsterdam, I just packed my bags and went across. It didn't work out, I was a horrible telesales guy, so I came back to the UK.

And within six months of being at DLA, I'd been to a few other conferences that the law firm ran with folks from different offices. And I had figured out that there were probably opportunities to get the hell out of dodge, and I latched on to a group that were based in Hong Kong and did what I spent the most of my life doing, which is making friends.

Philipp: QVC?

Daniel: Yes, exactly. So one of them said why don't you come out to Hong Kong, and I said that would be a great idea.

Philipp: Yes. So this was when?

Daniel: So this was 2005 I think, yes 2005. And so this was very much the beginning of Hong Kong getting big again. After SARS, and after all the problems it had. It was a great year to go to Hong Kong because everybody was going, right? It was the year that Hong Kong suddenly exploded. It was a massive haven of folks from all around the world just turning up. And there was just so much to do, and it was so busy, and the job's really interesting, and the team I worked with were fantastic. And I knew then that I didn't want to leave Hong Kong. I’ve never lived anywhere like that in my life, it was like nowhere my wife, and I had ever been. But we were only there for six months originally, and we had to really work hard to stretch the hell out of that one.

But we worked hard to get ourselves established, and it ended up being 18 months. And then the recession came, then 2007 hit and I was in a place where there wasn't going to be a fantastic amount of opportunities in the kind of law I was doing at that point. So I went back to the UK very begrudgingly to Manchester with DLA, and we worked another two years with Matt with DLA and Manchester.

DLA were a fantastic law firm and treated their team and staff really well. And so I was really fortunate we remained in employment during the famous credit crunch times when all you saw on TV were credit crunch offers and credit crunch deals and two for one meals.

Philipp: I always try to remind people that because they haven't seen it for like the last 12 years, right? This year was not even close to what happened then. Because when a bank like Lehman Brothers fails, and then TV, news stations are telling you that the next banks are going to fail, too, and everything is going to go to zero… People are afraid, right? They forget.

Daniel: This is a very different period. And it's funny when you've been through the three of them when I look back, each one of them so different and scary in different ways. The first one was scary because well, why on earth would something so big as the internet and not work, we were all confused. But I was young and didn't really care, and I could take any job. The second one was I was incredibly shielded, and if anything, we had kind of an easy time, everything got cheaper, and it was like “Wow.” But it was really scary. I remember watching, I mean suddenly everybody watched CNBC. Suddenly you flick a bit further up past even QVC on cable, really high channels; you'd find all the channels with like numbers on the screen and start watching them.

And I remember just lying on the couch in a ridiculously nice apartment that we got, because of the price of property. It was crazy. Our next-door neighbour was a professional footballer from Manchester United on both sides; they were both burgled during the year that we lived there.

We lived on the top floor of this ridiculously expensive building called Timberwolf; we had a penthouse there. Because the rent was one-third what it had been a few months before. So we came back to the UK, had a normal salary. We're living in a penthouse which was one-third of what it should be, watching the news of the world crashing around us. Didn't really know what was happening, but we had a fixed contract with the law firm that basically meant they couldn't get rid of us for two years.

So, that was really strange, but then fast forward, now this one is again terrifying for very different reasons. It's terrifying because this is different, this is out of our control, there's no ending to it. We don't really know what will happen next year, because we don't really know what will happen when government support goes away. Each one of them's got fear for different reasons, and people at different stages and their life handle that fear very differently. So I find this one actually probably the most frightening.

Philipp: I totally agree, because I think that just the feeling of, almost like you can't do anything, right? Like you said. But I also tell people, they should never underestimate human resilience, because I think there's been a crisis before, right? And I think even this one which I agree with, it's pretty terrifying. First one again, my first one was ‘08 without coming out, of course, just was 2001. Like you said, you're young, you just pivot, you just do something else, you figure it out. A lot of my friends actually stayed and did their masters. But I wanted to earn some money. I was done with studying. I just didn't want to ask my parents anymore, so I was like okay, I want to just get a job.

But yes, you were able to do this. Now it's a different scenario. Obviously, I’m incredibly lucky. I also have a job; my wife still has a job for us. Again like you said, things are actually getting cheaper, it's actually the same thing happening again a little bit. But this is the first time in my life probably that freedom is a little bit taken away, and this is probably the hardest part.

Whereas in ‘08, I can still do whatever I want. Whereas now, it's becoming like hey, not so much. 

But you did Hong Kong; you went back to Manchester. Did you go back with another law firm back to Asia, or was that already the start of you going out on your own?

Daniel: No. I came to the end of the fixed contract and decided not to do an internal application to stay on. I think I could have done that. I think it would have been; it was fairly clear that I could stay on and work for that firm. But nothing about my future told me that I wanted to just stay, and just do that. There was just never a part of my brain which said "Go and do a job for a long time, get paid more and then retired.” And I don't really even now know why that is, but I’ve just never been driven by the thought of money in that respect and thought of just doing something to make money.

So really, for my wife and I, there was no thinking really, it was just “Let's get back to Asia, that's where we've had an amazing time.” But things had really changed. If you think about how much things have changed in this year, it's really interesting to look at the parallels in 2007, because things really changed a lot in those years as well.

And these recessions have really opened my eyes to the fact that they're not just about people struggling and problems, they're about massive change that happens really quickly.

And Hong Kong’s change that particular year was that essentially, it was a couple of years of time which meant that slightly more educated folks from mainland China were coming onto the job scene. There was a slightly different client base that it kind of filtered through, and that meant that very quickly, within the space of 24 months, the clients in Asia had gone from being primarily head offices of western businesses to being a lot more Asia.

It was Asia-first. And therefore the people that people wanted to recruit were not westerners; they were mainland Chinese. They were Asians with language skills, who were far brighter, far more knowledgeable about the region, spoke the languages. So that niche of westerners being valuable had really just disappeared. But it hadn't disappeared here in Singapore.

So Singapore was recruiting like crazy in 2008 and 9, 10. And of course, that was when the market really opened up in Singapore. And I came out here with another English law firm who were recruiting aggressively to get UK lawyers out, and the fact that I knew Asia very well meant that I was pretty well placed. So I came out here with Stephenson Harwood to Singapore.

And there was very little opportunity for spouses in those days in Singapore because it wasn't vibrant like it is now. Singapore’s a wonderful place today, but then it was tough for expats unless you wanted to be an expat, which wasn't what the dream was.

I don't know what the dream was, but it certainly wasn't that. But Hong Kong just felt like a place where we could be; we could just do whatever we wanted; it just felt like there was an opportunity. I don't really know why we just felt like it was going to be possible. And we had a network there, we had friends, and so we just took a risk.

My wife, who's always the more better prepared, got a job within weeks, and she actually kept that job for the entire time we were in Hong Kong. She had a job for eight years as a writer which is very hard because writers typically don't keep jobs. And she went through an industry which was destroyed over the course of that ten years in terms of digitalisation, but she managed to manage to keep herself well-positioned.

And even brought that job over here, and nearly got the company set up in Singapore to run as well, but fortunately, COVID put a stop to that. But I went back into law, but I think it was very clear to me and the people that employed me that I wasn't going to be in that role for very long. And I’d decided to get out of law, and at least being a practising lawyer within nine months, and that's when it all went entrepreneurial.

Philipp: Yes. So yes that's where I want to get to, right? I think, first of all; I think for a lot of people you do as told or like you go into the flow of working for a law firm, you go through certain stages as well, and make good money.

Your wife had a job so that always helps. If a spouse has a job, to embark on journeys like entrepreneurship, where you might not take a salary for a while because the payoffs are usually, they take time, business they're hard to build, they take time and grit to do.

So what ignited them the idea of well, once you wanted to, you knew you needed to do something else, but why Zegal? What ignited even the idea about Zegal? And you can a little bit tell the listeners also what it is and why you did it, right?

Daniel: Yes, sure. I mean for me, the business came after the desire frankly, and I think that's probably the case for some entrepreneurs. And I know it's not the case. I listen to a lot of entrepreneurs because it's fascinating to hear what drives people. And so many are driven by the idea, and then they follow that because that's become the purpose.

I think that it wouldn't be fair to paint myself in that ilk. I had started to realise that fundamentally, I was probably unemployable. And that as an individual, I was never going to be somebody who could wonderfully support somebody else. I needed to be doing things that made sense to me, and that's never a good attribute of somebody who's employed to do a specialist role, and then that business needs to do that thing. So I was just never going to be a useful lawyer. And I remember it came to a head when the guy I was working for, he's a really nice guy, he said “Do you realise that you're supposed to help me, don't you?”

And actually, it wasn't that he's being facetious, it was that I just hadn't realised that. I suppose I thought about it, and I thought I didn't actually really know that was my job. I thought my job was to do all these things that I’ve been doing. I didn't realise it was to help you to do that. And I thought “No, that's not what I want to do.”

And so I said to my wife, “I’m pretty sure that I can do something much more interesting in this space. And I feel like so much of what we do isn't actually helping clients, and so much of it doesn't seem to make any sense. And now, I’ve heard that my job is to help somebody else do that. I feel like that can't be a good life purpose.”

And so again, the same person who'd said “Yes, I’ll follow you to whichever countries,” or “Yes, I’ll move to a house that I’ve never seen,” she said “yes, go on then, why don't you give it a shot?” But behind every idiot, there's somebody that's smarter. And that was for me Alicia; she's always she said let's give it a crack, let's encourage, let's try and do it.

Philipp: We can do a whole new, another podcast episode just on this, because I do believe in the same thing. I have to support in a relationship; you have to support your partner because, let them grow.

Daniel: Like if you haven't got that, you haven't got a chance. I mean you talk about paychecks, I mean the early days that there was absolutely nothing. It was me traipsing around Hong Kong trying to build friendships, and this was, it doesn't seem very long ago in my life, but of course, it is now quite a long time ago six, seven years ago. Nobody, but nobody ever was talking about doing things in law; it was like what do you do? Why are you wasting your time?

Philipp: There are law firms, and that's it, right?

Daniel: Yes. What are you doing outside of a law firm? Why am I talking to you? And so it actually took quite a long time to figure out what we even would do. I mean I knew that law was kind of a bit messed up. I knew that there could be stuff that we don't know. I’ve had a background time and time again getting involved in software and thinking, and it's always been a passion of mine. But I wasn't a coder; I wasn't a developer, I’d never done anything like technically, I didn't really know anything about it. And so I started with some just really basic stuff, I just started thinking well, what the clients love? Well, from my experience, our clients really love big law firms. Because we work crazy hours for them, and we do absolutely everything. And we are incredibly meticulous, and so they pay us lots of money.

And I thought, “Well okay, so let's have a look at that angle. How can we create a sort of non-law firm model where we do that?” And I got in touch with a good friend of mine from law school from Manchester; he was a criminal lawyer. And one of the funniest guys you'll ever meet. And if you ever want to do a podcast for someone who's interesting, you should get Chris on it.

He had essentially left the UK and was lying low in Spain at this point because a lot of the criminals he represented were basically becoming a little bit frightening for him. So he'd taken leave of his job as a criminal lawyer, and kind of gone to lay low in Spain where he was teaching. And he and I just started thrashing out ideas of how we could offer between us, a kind of 24/7 sort of service to smaller clients, to sort of say look, we could do an affordable business which could help SMEs and startups which were not really a thing, but they started to hear about a little bit the word startup. And we said look perhaps just something as simple as being able to being able to round the clock, assistance would help.

Of course, that's a horrible business to build, it's totally un-scalable, and it's just consulting for cheaper clients. And so we knew within a year that wasn't going to happen. But it taught us a whole bunch of stuff about a new market I’d never served smaller businesses or SMEs. And suddenly so we started to uncover that, there was just this enormous market of businesses that all wanted to pay us to do stuff. It's just that we couldn't really afford to do what they wanted to do. And that was of course why law firms in the first place ignored them and dealt with banks. And that was when I met a guy called Jake Fish because I was doing a lot of, just going for coffees with strangers. It was like my new kind of daytime gig, every day.

Philipp: Networking at Starbucks.

Daniel: Yes, networking. Yes, every single day. My wife's like, “This is what you do for a living now?” I was like “Yes, okay. I go to Starbucks, and I’ll meet strangers.” And I had a name by this point; people knew who I was. They were like “That's the guy that does-- who might do law-- but we're not really sure… But he seems to know about startups and SMEs.” And so I mean, at the same time, the startup world was happening, lots and lots of startups were kicking off in Asia, and they were starting to pick up the phone to us because law firms didn't talk to startups in those days. And so we had this kind of this cult following, and lots of the early Asian startup networks like Startups HK, Startups Asia, W, have all these big groups and a lot of accelerators, YCombinator, all these guys were getting in touch saying “Oh hey, you're the guys to talk to in Asia for startups.” And I said “I guess so; I don't really know.” But that led people to get in touch, and one of them was Jake, and Jake was a well, Jake is still an incredibly close friend of mine. But then, was an absolute stranger. He would become my co-founder for Dragon Law ultimately, but we would have coffee every week or so, whenever he was in town. He was originally a Debevoise lawyer, so a white-shoe Wall Street lawyer. But more interestingly, he was the first general counsel for a business called Li & Fung in China. Li & Fung was and is the biggest business that you've never heard of that produces kind of white t-shirts for The Gap and things like that.

So if you've bought clothes in any western market, they probably come from Li & Fung. And they were 100 and something years old, but Jake was their first-ever general counsel. So he came with a completely different problem, he said okay, you're looking at SMEs, but I'm going to tell you another problem that exists: “I’ve been a general counsel in an enormous company in Asia, and they didn't have anything at all internally. And so I’ve spent my life basically drafting contracts, doing bits and pieces, stuff that I honestly thought I wouldn't have to do, but I’m doing it because there's just no infrastructure.” And he said, “I want to solve that problem.” I said “Well, I want to solve my problem, which is like all these startups these folks calling us.”

And he said “Look, well I’m really interested in technology. And I’ve been investing in tech businesses, and I think I can pull together money for this business to start if you can tell me what we're actually building.”

And so that took us nine months, we didn't really have a clue, but we would meet every week or two in a place called Oola's in Hong Kong, which was a very expensive cafe that I could barely afford cups of tea and at that point, because I was doing a lot of networking, it was getting quite expensive.

But I thought it was the right thing to do. And then I remember one week, I was putting on my jeans and my jacket and my t-shirt, which was the fashion in five years ago, every startup guy had to wear that. And I said to my wife “I’m going to say to Jake today: We just got to do this. I can't meet and talk about things anymore; I’m not the sort of person that can be inactive. We've talked and talked and talked. And I think we have kind of an idea now; we've just got to do it.” And said to Jake, “I said you don't know me, I don't know you, but I’m going to set the company up this week. The company's going to be called Dragon Law, because I just wrote it on the name this morning, and I don't know where I got it from. But apparently, it doesn't exist, so I’m going to do it. Do you want to do it with me?” And Jake just said, “Okay.” That was it; we had a company with no purpose. And we had a bunch of money because we had investors that were prepared to put money into this company.

Philipp: That's what I was going to ask. Did you have to raise money or was it just the two of you?

Daniel: We raised money from a bunch of just very seed stage investors. I think we raised all told about US$300,000, so not a huge amount of money. Some guys put in 10 bucks. It's probably harder today to do that than it was five years ago because I think Hong Kong was really awash with money. And FinTech hadn't really happened yet, in the sense that the bankers hadn't kind of got into it.

So they were still plenty of wealthy bankers that were prepared to kind of invest in businesses; it sounded interesting. And we had a, really, we had a bit of a story. But frankly, the story at that point was “Law is basically broken; there's a high probability that you as a person have probably experienced expensive broken law... Will you invest in our business?” That was basically it.

Philipp: That's a good tagline, right?

Daniel: And so we found a lot of sophisticated folks that said “Yes, I’ve been either using lawyers in my role professionally, or I’ve had to use lawyers because I’ve gone through a divorce or something else.” The sort of things that you come across, and so we cobbled together money.

And then we started really working hard on figuring out what it was, and started looking at business models from other countries that were very limited because there was nothing in legal tech wasn't a thing. But we looked at legal for non-law firms. And we started building Dragon Law, which was pretty easy at the basic.

It was just a very simple technology to create business contracts for small businesses, nothing more and nothing less. And it became the fastest-growing startup in Hong Kong at that time, no not anymore because, of course now Hong Kong scene has really increased. And before we knew it, we had several thousands of clients across Asia who were using this product. And it was all a bit crazy frankly.

Where I went from me and Jake to this big office in Hong Kong, and quite a few people and the idea obviously became more and more concrete what we did and who we served, and how we worked. But it grew from a need that we didn't really know how to solve to being a problem that we kind of learned backwards. So yes, probably not the usual way to start a company, but I’m sure it's the way that a lot of companies actually end up being.

Philipp: Yes. No, I think it's a great way to start a company. I think you hear that's quite a bit though: people do a job, they find there are some flaws in that job, they ask questions, right? And like you did as well. And from that kind of started the idea. Maybe that's not the final idea, that's not the final product.

But at least you get started thinking, and I think you made a good point that at some point, you need to just start too. Because you can talk about it, and you can talk yourself out of things into things. But in the end, you need to just flip the switch and say “Hey no, I’m all in, let's get it done,” right?

Daniel: I think that's a really important point. And yes, sometimes, not very often. But I sometimes meet folks that are doing part-time gigs or the new fashionable one that I read about called side hustle or something. And I’m sure there's a place for it. But I don't really understand how you could do something without putting everything into it, but that's just me.

But at the same time, I am a very different worker now than I ever have been before. I couldn't imagine a future me if you asked me when I was younger, would Daniel be the kind of person that would work every day without fail for 15 plus hours, would he do that? I never would have dreamt that was me.

And maybe that's not healthy; maybe there's a whole different discussion on that. But doing this is not a job, it's being an entrepreneur, and it's about loving it, it has to be.

Philipp: It has to be about loving it, and I think you made a point also. You do something you love, it's your baby too, right? You created it; now you're also responsible for employees.

Daniel: Listen to the three that I have at home as well.

Philipp: Exactly, right. So 6 to 3, but exactly right. So you do something you love, you will put in the hours, but they don't feel like work, right? And I think this is probably the stage that everyone would want to get to at some point, but it's difficult to achieve because it's not for everyone either.

Some people are more spirited that way, you mentioned you already had that feeling kind of always throughout work, and you made that decision. So going back to Zegal now and looking back a little bit, what have been so far?

You've been doing this for seven years. What have so far been like the biggest challenges that you guys faced as a business? Or has it always just been you start up, you said number one growing startup, but normally businesses go like this.

Daniel: Yes. Look, I mean I’m the first to be very candid about the journey. And if you look at some so many startup charts kind of have the up bit, followed by the down bit, followed by the very big up bit. We're fortunately now into the second rise, but god, we went through a trough, we did.

And we're in a really unusual situation that we're growing in COVID. So we've had this amazing year where we're growing, and it's like wow, we're growing in COVID, but it's because we had a really tough period before that actually. And the tough period for us was that we grew fantastically, but that the legal world didn't really evolve in a way that we needed it to evolve and to actually support us, to grow an exponential rate. And so to give you a bit of background on that, legal technology and legal tech is now certainly a thing, I mean like, there's a tech for everything. But there's certainly a tech for legal. And there's lots and lots of really interesting legal technology companies out there now doing amazing things, really fascinating things actually. And things which will add value to different parts of the business. But primarily, legal technology companies focus on solving legal problems or producing technology for legal people.

And so the legal profession is excited, it's woken up, and it started looking at all those technologies. Our business needs, if you like, and our technology, how it interacts with traditional law firms is that as our products evolved from being a simple piece of software to generate contracts. Not only do we build more technology to do sort of more sophisticated things, and solve more sophisticated problems.

But the missing piece for the kind of clients we serve was how they would then work with lawyers to solve problems, which technology couldn't solve. Because there's a lot that technology can't solve, certainly in legal anyway. And we built a way of law firms using our technology to serve their own clients. But law firms just generally were not ready for that to happen. And so we kind of got to where we needed to be probably in 2018. But it wasn't until COVID, that law firms got to where we needed them to be. And so we had a good 13 or 14 months where we were kind of product ready, and we had customers that were kind of product ready, but we had no law firms or not enough law firms to actually serve clients in a way we needed to.

And like any business that's a subscription business, churn management and getting new clients the most important thing. And so we've gone from this enormous growth factor to being more stable, less powerful growth. When you're VC-funded, and you're funded to get from A to C in a few months’ time, and you're not getting there, then that's when it starts to get painful.

And so I went through as a leader the first experience I’d had of things not all being rosy every day, and that was a real eye-opener, right? I’d come to learn that you have fun, you build this business that looks the way you think a business should look. It's just you put dollars in, and more dollars spits out, it's all easy you've got the best advisors in the world.

And we have, I mean, we have advisors that are our board, our chairman was one of the guys that built Salesforce. He then ran the biggest AI unicorn in the states. Our first anchor investor was the former chair of McKinsey; we had all these amazing people. So, I just thought okay, well all these bright minds, how it works, you just keep growing.

Philipp: If I don't know what to do, I go to them, they tell me, right?

Daniel: If I can't solve it, there's a mentor, and there's an advisor that's going to help me get through this. But then there's nothing that you can really do to accelerate the way an industry wants to evolve. It will do what it wants. We'd always known, and we'd always made a really important play that we would never go against law. We would never try and do what lawyers thought we would do, which is be anti-law.

It was really important to us that we would build a product that was symbiotic with the existing sort of framework for two reasons. Firstly, because in my opinion, it's a very difficult thing to do to go up against the establishment, and secondly, I don't want that kind of headache.

And thirdly, frankly, most importantly, our clients understand a certain way of getting legal services, so let's do it in a way they understand. And that was the really important part that was getting law firms to help us to deliver this model. And it was ironically, COVID, which brought it about. COVID meant suddenly law firms were in a difficult spot.

Suddenly law firms were waking up thinking, “Wow, I kind of used to get clients this way, but no I can't get them that way because I can't do these things.”

Philipp: Very traditional business, right?

Daniel: Yes. They go out to networking events and meet people, or they get referred people, and those people come to an office, and they do this stuff, well that's all gone out the window. And suddenly you're looking out for platforms that have this already, and here we are with the biggest platform in Asia for small businesses with legal problems, with a technology which allows you to connect to them.

And the technology which allows them to do a whole bunch of stuff themselves in a very predictable way in which of course becomes more important. And suddenly, you've got these two things which for us helped, and it's certainly not by design, it's the SMEs more than ever. Suddenly needed predictable pricing, because this is a fearful time for them.

Law firms needed to serve clients in a way which was digital because they're suddenly all sitting at home. And we were sitting there with a platform which was ready to go. But COVID might never have happened, and certainly, I didn't want COVID to happen, let's be clear. But we've had this fortuitous time, which has put us back onto the trajectory again.

Philipp: I think that's what I meant earlier, like we talked about already COVID being an accelerator also for the way employees are going to work, from where they're going to work, right? The same goes exactly with platforms like yours. Certainly also the platform like Stashaway, also we've been growing through COVID.

People are at home; they don't need to go see their relationship manager anymore. They rather go with something that is tech-enabled, they always have access to it, it solves a problem, just like you're solving a problem now, right? Not that we wanted COVID exactly like you said, right? But every so often in life, like you said you went through three recessions, recessions are always catalysts also in other areas.

And I think certainly when it comes to FinTech, Legal Tech, everything old industries that can be disrupted, but there can be ways to optimise that work, make it cheaper but also make it, you always have to capture the customer in mind, right? It has to be intuitive, has to work for them. Make their life easier, just like your boss said he wants you to make his life easier almost, right? That's what you're trying to do.

Daniel: Sure.

Philipp: So thank you for all the stories on this. What would be one piece of advice that you could give to a would-be entrepreneur, someone that wants to be an entrepreneur? Is there anything that you would pass on to them from your experience?

Daniel: Yes. I mean I’m probably quite fortunate in that I actually get to meet lots of entrepreneurs, because of the work that we do. We serve and have served many thousands of startups across the region. So we hear so many stories, and we try and pass on as much advice as we can. I think the advice that I’ve always given to everybody is just to sort of know when to pass on the baton. And for me, that was stepping down as CEO middle of last year, getting to the point where we have taken the business as far as I personally thought I could—knowing that my skills are around relationship building, and around being in the front of house and about the ability to kind of really make friendships if you like, which were not what the business needed.

The business needed at that point to figure out how to get right back onto the trajectory that we had been on. So I think that's an incredibly hard thing for any business data to go through. And it doesn't necessarily mean that you have to do that, but you should certainly know what your role is in the business. You can't be an entrepreneur in this type of business, a business that's going to take significant risk and take significant investment, and expect to probably always be the guy that's in charge. 

And so understand that, and conversely also, if you can, and it's very difficult to know at that stage. But if you can know that before you start the business, know what kind of business you want to build. Really try and think about, are you looking to build a business which is going to have objectively, not targets annually, but targets monthly? Are you prepared to be in that kind of environment? Or do you actually want to build something which is for lifestyle, for pleasure, for the purpose? People will often tell you that they know that, but I don't think they do.

I don't think there are many people who are in the first year of business, who really understand what they're doing. I couldn't imagine six years ago that I would have built a business this big, or that I’d still be involved in the same business, it's just impossible to imagine that for most people.

Philipp: Well, it's great advice. Thank you, Daniel, for sharing this, I think the listeners will love that advice from you. So to close it up, we talked about your upbringing, we talked a little bit about personal finance then already, then we talked about entrepreneurship and your new business.

We are a personal finance podcast, so I have to ask it. But how does Daniel go about managing his personal finances? I know you have probably a big part of your wealth is also your business, right? And it's for every entrepreneur that way, right? But when it comes to personal finances, you said early on you invested in real estate, because your grandparents thought that was a great idea and it was, right? In the old mill. But yes, how do you and your wife actually go about it?

Daniel: So I think we're probably very traditional in the way we approach finance. Like all expats, we have significant cost outlays, because of you know, like you said before we live in Singapore, it's an expensive place, so we obviously rent here, we have three children in private schools.

These aren't the normal expenses for most folks in the UK, and if I was to tell people in the UK that I spend nearly six thousand pounds a month before I get out of bed, they would be horrified. But that's the nature of what we do, and obviously, we benefit from tax et cetera.

Philipp: Different lifestyle, right?

Daniel: Yes. I think Asia is a funny one, in Asia you get all the benefits in your 20s and 30s, and then you pay all the tax back when you get kids in private school. So leave before you have three kids I think it's probably one of the solutions.

Philipp: Save as much as you can, then leave somewhere, do your arbitrage, right?

Daniel: Exactly.

Philipp: Go to Bali.

Daniel: In terms of where we, oddly, we've invested back in the UK. So we have a few houses now across the UK, which is very traditional to do. And odd for somebody that like I said earlier on, spent his life trying to figure out how to go overseas.I think we always see that retirement or the future for us is probably back where I’m from. My wife's Canadian, but she thinks Canada’s too cold, so I think it's going to be.

Philipp: I second her, I studied in Toronto for one year. And it was the coldest place on earth I’ve ever been to in the wintertime, and I said I’m never going back.

Daniel: Yes. That's what she's like, she grew up in Calgary, which is a little bit colder and said no, that's not for her. So funnily enough, actually we have a house up in Scotland, which is a ski resort.

Which is the kind of the British ski resort, it's not quite as fancy as the ski resorts in Canada, and houses in the UK. So very traditional. And then in other ways, like you say, we benefit from this, the Singapore lifestyle, but we pay for it I guess, we pay for that luxury.

Philipp: Oh, that's great. No, thank you for sharing this and being so open about it, I really appreciate it. Also thank you so much for your time. I think we had a fantastic time listening today. And I’m sure there were some topics that I picked up and wrote down that we might have a second session at some point over the next year.

Daniel: Wonderful, thank you very much.

Philipp: Thank you, Daniel.

Daniel: All the best, thanks a lot. 

Philipp: Thank you.

Episode notes

In this episode, Daniel Walker shares with Philipp how his desire to work and live in different countries,has led to him creating Zegal, a legal tech company.

For past guests, visit stashaway.com/podcast

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Episode contributors

  • Daniel Walker (Founder at Zegal)
  • Philipp Muedder (Head of Financial Planning at StashAway)