Eight months of pitching, nothing to show for it, then the first term sheet finally arrives, and his own lawyer tells him not to sign. So he walks away from the only offer he has.
Rakhesh Martyn is the founder of Hachiko, a software platform that maximises returns from portfolios of stationary batteries. Before Australia he was a chartered engineer in London. We talk about rebuilding from zero, why people buy you and not your skills, and the 16-day sprint that finally closed his round.
Chapters
0:00 Intro 0:49 Engineering In London 2:44 Rebuilding From Zero 4:13 Back To Energy 5:53 Sri Lanka, Risk 6:53 The Leap 7:23 What Is Hachiko 11:03 Told To Leave 15:08 Eight Months Of No 16:08 The Worst Day 16:54 Sixteen Days 18:24 Advice To Founders 20:13 The Comedian 23:13 Going Solo Transcript Search or select a timestamp to jump ▾ 0:00 Rakhesh Martyn: And I was just looking at a sink full of dishes and I was scrubbing them. And I just looked at my hands and went, Jesus Christ, how have we ended up back here? 0:08 Thea Ngo: Rakesh trained for years as an engineer. When the work dried up after Brexit, he washed dishes to get by. 0:14 Rakhesh Martyn: No job was beneath me. I just had to work. I started this business 4 months after buying a house in Sydney. I haven't called you to have a discussion about this. I've called you to tell you that I'm not investing. I couldn't give less of a shit about Fiji. I want to build the company. 0:30 Thea Ngo: A lot of founders talk about resilience. but Rakesh really lived it. From the mountains of dishes to 8 months of nos to a term sheet that he couldn't sign, but none of it ever stopped him. 0:41 Rakhesh Martyn: Hi, I'm Rakesh. I'm the founder of Hachiko, and this is Founders in Motion. 0:46 Thea Ngo: Before the founder journey, before Australia even, you were in London, chartered engineer, years of experience in clean energy. In 2016, you were made redundant. So could you walk me through this time of your life? 1:05 Rakhesh Martyn: I'd been working as an engineer for about 7 years at this point, moved down to London at the end of 2015 to join an energy startup. It was my first job at a startup. I was very, very excited. And 6 months later, I was made redundant by that company. Startups are good at many things. This startup was very good at spending money. So it was quite a difficult time for me. I was 7 years as a professional. I was 28 years old, and I just couldn't find work. I was walking around, you know, I was in this great industry that was full of promise. I had experience, and I was very skilled, and I had very good references. But every place I went to was saying, oh, look, you're not for us, or it's just not right now. The EU referendum was happening around that time. So it was May 2016, and the vote was scheduled for June. So a lot of people were saying, let's just wait and see what happens with the outcome of Brexit and then we'll make our decision. And then the outcome happened and they said, whoa, we weren't expecting that. So now we need to make a plan for what's gonna happen. So there were several months that went by where a lot of these job opportunities I was banking on just didn't come through. They didn't eventuate. I had a lot of really difficult rejections where you really commit and invest into a process. You get to know the hiring managers and then they say, look, I'm really sorry, but it's just not gonna work out. So, that was really, really tough. When I was at university, I worked in a pub kitchen whilst I was studying to try and make some extra money. So, I actually went back to doing that for a period of time in 2016. I worked behind the bar for a bunch of breweries that I knew, and then I went to a kitchen, Muriel's Kitchen in Central London, and I was doing pot wash. And I remember that was kind of my epiphany moment. I remember just standing there, it was July 2016, and I was just looking at a sink full of dishes and I was scrubbing them. And I just looked at my hands and went, Jesus Christ, how have we ended up back here? No job was beneath me. I just had to, had to work. And I think that's always been my mentality, which probably lends itself well to being a founder now. 3:16 Thea Ngo: It lends so well to being a founder because you are the chief of everything. From running the company to figuring out where you guys are going to get corporate presents for people. 3:29 Rakhesh Martyn: I designed your cup, for example. 3:31 Thea Ngo: Really? 3:32 Rakhesh Martyn: Yeah, everything that isn't writing code has been me. 3:35 Thea Ngo: This is a really crazy experience. And if you think about the job market right now, it's probably one of the worst job markets we've had in the last few years. And a lot of really talented people like yourself back then are finding themselves redundant for the first time, for people going through that gigantic life transition, do you have any kind of words of wisdom from someone that's done it before? 3:58 Rakhesh Martyn: I mean, what matters is I got there in the end. And one of my old colleagues from the startup that I had worked at for 6 months, he ended up moving on to somewhere new and he needed help from a technical person who was also commercial. So he reached out to me and got me into EDF Energy at the beginning of 2017. And EDF is one of the largest energy companies in the world, so it was a huge opportunity for me. So he got me in there and I ended up doing that and tutoring on the side for several months afterwards. I just kept going, I kept hustling. And if I were to give anybody advice, it would be, you don't get anything, you're not gonna be successful if you don't keep trying. But you also have to keep reinventing yourself through the process because the version of you that's being rejected is probably not the right fit for what you're trying to do. That's why the rejection happened. In some cases, it's just not the right fit from a personality standpoint. But if you can be honest and reflective and self-aware enough to look into yourself and go, okay, why was I not successful? What can I control about this situation that's going to make the next opportunity better? 5:05 Thea Ngo: Looking back, do you think you were glad that the redundancy happened? 5:09 Rakhesh Martyn: Oh, that's an interesting question. Well, for that company specifically, it would've happened eventually because they ended up folding later that year. 5:17 Thea Ngo: The curse of working for a startup, right? 5:21 Rakhesh Martyn: Exactly. But am I glad the redundancy happened? I am glad it happened because that was the first time in my life that I've had to think, what is it about me that makes me employable? Not what is it about my skills, but what is it about me? And ever since then, that has been how I've pitched myself to every person that, I've raised capital from, or that I've asked for a job from, or every client that I work with. People buy you. They don't buy your skills. Your skills are a commodity, but people are buying you and how you apply your skills. 5:52 Thea Ngo: Okay, so speaking of career, money, and all the sorts, so you've said that finances were a constant challenge when you were a kid. How did growing up watching that shape the way that you think about risk now? 6:08 Rakhesh Martyn: I grew up in Sri Lanka and it was, we weren't very well off growing up. And there's 2 things that that has created in me. One of them is I did have a deep sense of kind of inbuilt guilt when I was a child because all I could think of was I can't wait to grow up so that I can get my family out of this mess that we're in. But that has led to me being one of these people that always takes on too much and burns myself out. 6:34 Thea Ngo: Yeah. 6:34 Rakhesh Martyn: In my adult life, I've ended up in a position where I go, well, risks are worth taking, but you've always gotta manage your downside position. 6:41 Thea Ngo: Yeah. 6:42 Rakhesh Martyn: So my approach to risk is that, it's that I, if I feel like I can be the master of my own destiny when things go wrong, I'll take any risk. I started this business 4 months after buying a house in Sydney, and that was at the time when interest rates were at their peak back in 2023. But I decided to leave the security of a full-time job. I was about to be awarded, you know, a 25 to 30% pay rise at that point as well. But I just thought, no, I wanna do this thing because I really need to do it. If I don't do it, I feel like I'll go crazy. Yeah. So I went out there and found a bunch of contracting work on a day rate, and I made sure that I could pay the mortgage at a minimum. 7:23 Thea Ngo: If you were to encapsulate Hachiko in 2 sentences, how would you explain it to an, energy novice? 7:31 Rakhesh Martyn: Sure. Hatchiko is a software platform for maximizing the financial returns from portfolios of batteries, stationary batteries mostly, but, you know, transportation will come with time. The reason that that matters is because battery storage as a technology vertical is booming and people are building batteries across lots of sites that have different technical configurations and different market exposures. So accounting for those differences is really tricky. 8:06 Thea Ngo: Yeah. 8:06 Rakhesh Martyn: So we say to our customers, we'll absorb that complexity away from you. You just focus on building the biggest portfolio you can and we'll make it sing. 8:14 Thea Ngo: I love that. Beautiful. So you mentioned you were going crazy not being able to build this. So tell me, where did the frustration come from? 8:25 Rakhesh Martyn: I've always been an engineer building physical things, so I actually fit the profile of a lot of my customers, the work that I've done in the past. And I was trying to build, I was trying to structure battery portfolios to get them through funding and then get them into operation, which is quite a big job. You're asking infrastructure investors to spend $100 to $200 million per transaction and then expecting a minimum of 12% internal rate of return. which is a 6 to 7 year payback if you're lucky. And of course they want it to be faster, right? So there, and these are assets that are built for a minimum of 15 years useful life. So it's a complex transaction. And I was finding that because a lot of the software products in market were not catering to that type of customer, these projects were not getting funded. So there was, in 2024, I was personally exposed to somewhere in the region of $500 million worth of project capital that could have been allocated but was not because the investors were not comfortable that the returns were gonna come at the rate that they wanted. And I could see a very clear gap that software could have solved even in those transaction meetings. So I thought, well, if nobody else is gonna build this, I suppose I should do it 'cause I can't, I feel like I can't do my job properly 'cause this product doesn't exist. So I went for it. 9:47 Thea Ngo: When you think about the increasing use of AI over time, one of the big constraints is gonna be consumption of energy. 9:55 Rakhesh Martyn: It's supposedly the biggest constraint. I mean, it's not computational power anymore. It's about whether the data centers can get access to the grid and have the energy they need in order to train their models. Yeah, that's what a lot of people are saying at the moment. 10:07 Thea Ngo: Your customers are large energy operators, long contracts, like serious trust required. What does that sales cycle look like and how did you get your first one? 10:19 Rakhesh Martyn: Yeah, the sales cycle is long because it takes It takes a long time for somebody to build the trust in you to hand over the keys to their hard-earned projects to then generate the returns from them. It'll take a minimum of 9 months, 9 to 12 months for me from first meeting through to somebody signing a contract, which is obviously a very long time. And once they sign the contract, they start building their project and it's a construction project which can take another 12 to 18 months. So from first meeting through to first recurring revenue, it is a very, very long cycle. Our first customer who gave us a real site to use our software on is somebody I actually met back in 2021 when I was in a different role. And he has followed our journey since then, right? He got to know me then. I tried to sell him a deal at the time. He told me to go fuck myself because it just, the product just wasn't there. He did it in the nicest possible way. He was very transparent. He said, look, I can see that you know what you're doing, but this product just isn't ready for me to use. Please leave me alone. And it was really important feedback for me at the time. Then when I started Hachiko, I started doing monthly newsletters, building in public, as they say, which has been really useful because he followed the journey every month and he would be replying to it saying, keep it up. I really like what you're doing. And then after I sent out the newsletter back in July, He replied to the email saying, "I think you're ready for me now," and he brought a site to us, and we onboarded it, and we still have it. He's made a ton of money. He has incumbents on some of his other sites, and we're actually making more money than they are on a on a unit basis, which is really exciting for us. It shows that our product has really come a long way very quickly because of the expertise that sits behind it. So that that sales cycle, yeah, the. That was how we came across our first customer. Trust is so important here because they've spent a lot of money on the project and they're expecting you to generate returns from it, but it's all computers, it's all robots that are doing the work. But if they know you as a person, know what you're doing, that's what matters the most. And they've seen me do this energy thing for a very long time now. I've been in their seat before. Like I said, I've worked in companies where It fits the profile of our customers today. And in all of the times that people have done business with me or had a conversation with me, asked me a question, I've never lied. I've always been me, I've always been genuine, and I've always delivered. And I think all of those things together is really what made that sale happen. But it was from a relationship that started 4 years prior. 13:03 Thea Ngo: Wow, okay. So do you think for an industry like energy and for the types of products that you sell, Could someone with no experience or no relationship in the industry be successful? 13:16 Rakhesh Martyn: It would take a while. It's always possible, but you've got to— the challenges that people face in the energy industry, which lead to them requiring solutions, are incredibly complicated. So if you can demonstrate that you understand and can empathize with those and that your product is actually solving the problem, then absolutely. Anybody can come in and solve problems in brand new ways and blow people's minds, but it's track record. When I turn up to somebody, it's similar to trying to raise capital, the warm intro versus cold outreach, right? If you rock up to somebody's office and say, I've got this software product, it's going to make you loads of money from your battery projects, the first thing that person's going to do is ask you how long you've been doing it. After you've left their office, they're gonna be on the phone, they're gonna be on LinkedIn going, who do I have shared connections here? Call the person up and say, what do you know about this guy? Is he any good? And more often than not, people would have good things to say about me because I've been in the industry for a long time and I've never screwed anyone over. So, if I've failed at something, I've been very open about why that was. And people often know that it wasn't because I willfully misled them. So, That kind of, and of course I've delivered multiple times very successfully also. So all of those things combined, nobody's perfect in energy. We're all figuring it out. You know, we call it the energy transition right now from coal and gas through to renewables. It is messy as hell. So anyone that's out there saying they've got all the solutions is lying. 14:54 Thea Ngo: Yeah. 14:54 Rakhesh Martyn: But if you can show to a customer that you've lived it and that's where your solution comes from, then you have a much greater chance of success than if you're brand new. 15:06 Thea Ngo: Yeah, for sure. Okay, so you touch on fundraising a little bit. So March 2024, you start fundraising for 8 months, nothing. Was there a specific moment or day where you genuinely thought that the business was over? 15:25 Rakhesh Martyn: Yeah, there were several. First one is We got our first term sheet after 8 months of fundraising, and I was just so happy. We passed the investment committee, and I sat there being told afterwards that we had been successful and they were gonna give me a term sheet. And I remember just being so elated at that point. But then we got the term sheet, and I took it to our lawyer, and our lawyer said, I don't think this is very good. And because you don't have another one, you have no leverage. And I felt like I would actually rather not start the company then take that term sheet and then potentially have this kind of dynamic going forward. And that was a bad day when I had that realization. I thought, well, is this ever gonna happen? But the worst day by far was in August of that year where, so we are 5 months in and there was an angel investor who had been really supportive, very nice. I'd built a relationship with him and he called me up and said, look, I don't think I'm gonna put money in here. And I'd been really hoping that he would because he's a big name in the industry and he would've brought a lot of other investors with him. And the reasons he gave didn't make sense to me. So I tried to have the conversation with him and eventually he said to me, I haven't called you to have a discussion about this. I've called you to tell you that I'm not investing. I remember that day being really hard. And that was a day when I thought, have I even got the right idea here? Is this ever gonna happen? We got there eventually, thank God. But yeah, those days in particular But very, very difficult. 16:54 Thea Ngo: So you got there at the end, and then November 13th, you meet the fund that actually led your pre-seed round, term sheet by the 29th. So 16 days in total. Was there anything you think changed about the story that made them say yes? 17:09 Rakhesh Martyn: After 8 months of pitching 4 or 5 times a week at a minimum, and all of those rejections that come, you learn so many lessons. Here's the team. that's gonna make this product happen. 17:22 Thea Ngo: Yeah. 17:23 Rakhesh Martyn: Here's the traction we have already, and here's why we need the money now. It's a problem that can only be solved with capital and not time. This is the moment to invest. You know, in investing and in startups, they talk about how the dream scenario is when the investor starts pitching your company to you. And I had that experience in that meeting. 17:41 Thea Ngo: When you say they pitch your company back to you, so you met, so what does that look like? 17:46 Rakhesh Martyn: Yeah, I was describing the story and the opportunity, And they were starting to give me things about the opportunity that I hadn't said. If you do it here, then you can start doing it on bus depots in the future, truck chargers in the future. Think about all of the electrification of transportation and how the addressable market grows from that. It's not just about commercial rooftops and paddocks where you put solar and there's a battery next to it. It's all of these other areas that you haven't even thought about. So yes, the opportunity is 100x the market today. But it's actually going to be much more than that. And they started to get really excited. And that was— it was great to have that experience. 18:24 Thea Ngo: So you've had quite an arduous pre-seed journey and also seed journey. Looking back, what is the one thing that you would advise founders before embarking on the journey? 18:37 Rakhesh Martyn: It's your company, it's your story. Make sure you stick to that. But I spent too much time solving for the optics. Rather than trying to build a great story of the company that I wanted to build and why the investor should invest. 18:49 Thea Ngo: Yeah. 18:50 Rakhesh Martyn: So I didn't build enough of a pitch around the unique context of our team and our company and our product. I was just like, if you're fundraising, you need to do it this way. Tell them this story. Make sure you've got at least 18 months runway or else they won't invest, that kind of thing. I just took all of that in too much early on, and I think that's why I failed at so many of those pitches. But if instead I had focused the story very sharply on this is who I am, this is the company, this is the story, this is the product, and this is why the opportunity is so exciting, I think we could have got there quicker. So as a founder now, I'd say just make sure, especially at the very, very earliest stage, you are the reason they're investing 100%. So you've got to make sure that you make that very clear to them why you are an investable resource. 19:37 Thea Ngo: The idea, the market, and everything is going to change so much. But the only thing that's constant is you, the founder. So indexing on that becomes really important. Not only sort of telling the story of like your background, but like why, what drives you, what motivates you, who you are as a person, your personality. Those are small factors that I think play a big role that people don't really index on. 20:03 Rakhesh Martyn: How do they know that when it's really hard, and it will be hard, that you're going to be there, you're going to be working through it and making sure that you get results regardless? You've got to be able to communicate that. 20:13 Thea Ngo: You sell a deeply technical product in a very boring industry, but you're also a stand-up comedian. So what does comedy actually give you that the founder journey doesn't? 20:27 Rakhesh Martyn: Comedy has given me the ability to take a lot of hits and keep going. I've done thousands of gigs, and you'd be lucky if you did thousands of gigs and 20% of them went well. They may have gone well to the audience, but they didn't go well to you. There's a lot of times where you kind of cop out of a set because you go, I really wanted to do it this way, but it's not happening. So I better just be reliable, do my time, and get off stage. Sometimes you try stuff and you get absolutely nothing. It's given me the ability to read the room reasonably well, and that translates to every area of life, not just comedy. 20:59 Thea Ngo: There's something about stand-up comedy that's really brave too. And if you think about it, if the founder journey, you really need to be super brave to embark on it because it's tough and it's long, it's arduous, and you're committing yourself to, like you said, getting punched every single day. What do you think this entire journey has cost you? 21:20 Rakhesh Martyn: It is truly all-consuming in the most beautiful way possible. It's all you ever think about. It's the most exciting thing in your life, and not everybody gets that. So it changes the way you look at the other people in your life and the way you choose to spend your time. And you are just much more ruthless with how you do that. So going to parties, going to dinners, you know, having inane conversations with people just isn't as attractive anymore. I woke up this morning on the Saturday going, here's a bunch of stuff I can't wait to do today because next week is going to be so much better. And I just never had that before. The person you become when you're a founder is so different to most of the people around you. And suddenly your network just isn't the right network anymore, right? Think about it as you're making a living in a compressed period of time. Life is so beautiful. Why would you waste it working for so many years if you could compress that exercise into a 5 to 10 year period and then spend the rest of your life living? What a great way to live. And I don't think— I didn't start this company for that reason. But I am having that experience now. I'm able to think every day, this is everything I do, this is my life, and I love it. Which is very different to most of my friends in the corporate world and can't wait to take their annual leave, you know, and go to Fiji or whatever. I couldn't give less of a shit about Fiji. I wanna build the company. 22:50 Thea Ngo: The founder journey is lonely in the sense that you choose to be lonely so you can focus on what you really care about. And there's also a sense of kind of toxic or radical positivity towards what's next, which keeps you going. And I can imagine as a solo founder, that mentality is so important because there's no one that's going to be there to take you out of your kind of doom and gloom. So you are a solo founder. Do you advise it? And what has been the worst part about being a solo founder? 23:23 Rakhesh Martyn: It does depend on your temperament, but if you're a person like me, I do think solo founder life is the best life. 23:29 Thea Ngo: Really? 23:30 Rakhesh Martyn: I work incredibly hard and I operate, you know, I'm very proud of the output that I can generate and the way in which I work, the relationships I've built and the mentality that I have. Unless there was somebody like me who understood the, the what we're shooting for, Yeah. And the importance of it, the quality of it and everything, and was able to hustle as hard as I would want them to. I had one originally and, you know, we had to part ways for exactly that reason. Day-to-day life can be, yeah, really hard, really lonely. And when you are the emotional arbiter, you're the emotional regulator for your company. So if you've just taken a massive punch to the face and then you go into a meeting to talk to your team, and that bruise is showing, the whole team feels it. 24:19 Thea Ngo: Yeah. 24:20 Rakhesh Martyn: So you need the ability to say, all right, now that's already happened, it's gone. This next meeting or this next discussion, this next interaction is a new thing. And I need to make sure I don't take that baggage in with me. Whereas if I had a co-founder, I could say, hey, look, that pitch was an absolute bloodbath. Can you just go do this thing? You might have that opportunity. But to get around that, I have an executive coach and he's been great. I'm able to pick up the phone and talk to him anytime. My wife is great. She's learned a lot about energy in the last few years and software, and she's really kind of committed to it also. And she's able to kind of help me out. But one thing I've found is probably the most important thing is other founders. And I went to a dinner on Thursday night and there was a bunch of other founders in there. Originally, I didn't want to go to the dinner because my week had been such a train wreck. But I went in and I was just talking to them and it became so lovely because they were all telling me about versions of the same experiences that they've had and how they've gotten through it. And most importantly for me, it was like, I'm not alone experiencing this thing on my own. 25:31 Thea Ngo: Building a village around you, right? 25:33 Rakhesh Martyn: Absolutely. 25:35 Thea Ngo: And yeah, I think everyone— yes, it is always great to have a co-founder, but finding a co-founder that really matches the way you work is actually really hard. And I've seen too many co-founder breakups to the point where I think unless a co-founder relationship really works and you've worked together before and it really gels, maybe going at it alone could be the better course of action. 26:00 Rakhesh Martyn: My experience has been that even if people think that it's going to go well. Until you're in it, you do not know how you're going to respond. 26:07 Thea Ngo: That is true. 26:07 Rakhesh Martyn: You can almost do like a prenup and ask each other some questions. If this scenario happened, what would you do kind of thing? 26:13 Thea Ngo: Um, but even that, you still never know how anyone would react in this situation because emotions take over and the feeling becomes way more real. Thank you for coming on the podcast and for being super candid. 26:26 Rakhesh Martyn: Thank you for having me. I appreciate it. 26:28 Thea Ngo: That's a wrap. If you like this episode, please hit the like and subscribe button. It helps us bring on more awesome guests, level up production, and bring on new series you'll want to watch. And if you want to hear more early-stage builder stories, check out our other episodes. Okay, see you next time. No transcript lines match that phrase. Try fewer words.
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