Sean and Gen Driver on Regulation, Business and the Long Game

0:00 Business experience before racing

Sean 0:00 We opened up supplementation businesses and we sold, we had, you know, a big online store and physical stores of supplements basically just turned it around and tripled its turnover and sold it and just sort of flipped that business. So like…

Gen 0:17 I wouldn't say we ever, it just naturally evolved over time. We didn't necessarily set out 10 to 15 years ago that this is what we would even be necessarily knowing.

0:27 How syndicators are regulated

Sean 0:27 A big thing is that as a syndicator we are regulated, syndicators are regulated via whether it's Racing NSW, WA, Victoria, Queensland, whatever it may be. And we're regulated by ASIC, that's more Gen's domain. But people, not only do we have to supply financials every single year to the authorities, but it gives the owners peace of mind when they're investing their money goes straight into a trust account that we can't even access. So if you're investing with someone else, the money is accessible. With syndicators, it's a trust account that's arranged by that race and authority and it's controlled by them, not us. So your money's always safe. It's… I highly recommend to look at registered syndicators for that reason, especially when you're looking at an expensive horse. And the thing I guess we have over some others, or I don't know if it's even have some… have over others, but a reason that you can invest with us. So I guess, Jen, you can mention that you're, you know, you're a registered lawyer and you worked in that as a lawyer for what, 13 years?

1:42 Gen's legal background and how the business formed

Gen 1:42 Yeah, so I was, I guess my background is I'm a practicing solicitor, I still am. A large part of the regulation and the highly regulated documented space of what we do has a large legal component, which assists me a lot. In the event that I wasn't a lawyer or I didn't have a legal background, I think you would be leaning on the legal services of somebody else quite a lot. And I guess that's how this business sort of formed or married up in a way. Sean, as is touched on in numerous other podcasts, has a very extensive and detailed horse background. When we started to purchase racehorses, had friends and family become involved, we realized that the whole system of racehorse ownership had really moved into the syndication or share space. Gone are the days of people probably, or not so much, it still does happen, but gone are the days of people going out and buying their own horse and racing it on their own. Now with simply the price point of a yearling these days, people are more inclined to jump in and purchase a share with the syndicator or a trainer. To that end, we then sort of formed the business years ago now, but sort of leaning on the background I had and becoming an approved syndicator. So I sort of handle that side of things, handle the background work that's required and Sean is on farm or at the sales or whatever's required running the horse racing side of things. But as Sean said, it is a highly regulated space. People do have that security that if they're coming along to us, buying a horse share is a financial product. That's what it is. We're giving people that disclosure around what it entails. They're investing their money. That investment is protected. Obviously, you're not promising anything about that investment because you simply can't. And that's what we touched on before. But you're giving them all of the information that's required so they can make an informed decision before they jump in and purchase a share. And that's probably the beauty of what racehorse syndication is. And I think it's really opened up a lot in the last probably 10 to 15 years. And that's the way ownership has moved, at least in Australia. And will be going. And will continue to go that way. Yeah. Even in the time since we started, the price point of yielding, I would say it's increased exponentially and it will just continue to do so.

Sean 4:02 Yeah. The average has probably increased by 20%.

Gen 4:06 Yes. Yeah.

4:07 Sean's family and business background

Sean 4:07 That's also natural inflation. Of course. Et cetera, et cetera. Yeah. I think the whole, like that's one aspect and such a large aspect is not only do we have that in-house, you know, registered lawyer and that background to help you guys as the owners for that guarantee of safety and security, but also the business sense of the background that a lot of people don't know, but like, you know, I was born into a family that was always self-employed and ran businesses. So, um, I've never really essentially, um, uh, even though I was employed by my family, it's always been our business. So we had, so my grandfather had service stations everywhere. And then from there, like I, I grew up and, um, I obviously had a football background and had to go away and do that for a little bit, but I'll still always going to Merriwa, which it was our horse stud on the other side. Every chance that I could get, I went there weekly, even though I was still living in Sydney full-time with football. Um, I'd still go there every week and, uh, check up on things and still involved in the businesses and, um, the service stations. And then from there, um, we opened up supplementation businesses and we, we sold, we had, you know, a big online store and physical stores of supplements. Uh, we sold that. And so I actually, to Jen's, uh, discuss, I actually had a bar or we had a bar and a sort of bar slash nightclub for. Two years. And that was more of, it was a cool experience. It was, um, a business partner and I, we, we bought it and we, um, basically just turned it around and, and tripled its, its, uh, turnover and, and, and sold it and just sort of flipped that business. So like there's plenty of experience in regards to the whole business side of things as well. Um, yes, I've got great horse experience or years of experience, but it's also the business knowledge on the other side. And, and with Jen's legal background as well, I think that helps. So the whole running the business is quite easy to us. Um, well, I, I feel it's easy for me.

Gen 6:18 I wouldn't say we ever, it just naturally evolved over time. We didn't necessarily set out 10 to 15 years ago that this is what we would even be necessarily showy. Nick just naturally evolved that way.

6:30 Systems that apply to horses and people

Sean 6:30 Um, whether it's selling a fat burner or pre-workout or a skittle vodka on a Friday night at the bar that we used to have at R&B Fridays, the, the systems are the system and a, and a, and an athlete's still the same, right? So whether it's a human or a horse, the business system and the structure is this, the athlete needs this, everything you do as a system. And if you've got systems in place, um, and they work, don't change it. And then you grow with time. And, and like now AI is a big thing. So now you've got to grow with AI and, and, uh, that's just, uh, another example. Like you've got to go with the times. Um, but, uh, I think we cover so many avenues, don't we? Yeah.

Gen 7:17 And I think to what, to what you're saying, we've both had such a extensive experience in other parts of life that this to us is another, is another business to run. It looks completely different. Some of the other things you may have done in previous years. But you shouldn't have been the both of us.

Sean 7:33 This is, we, I don't think we could, or I know I couldn't, there's no way we could juggle. No. Apart from like, we've got the two kids and obviously, um, you know, the farm and staff, et cetera. Like you, we could not juggle another business on the side. No.

7:49 Gen on loving the work

Gen 7:49 Initially we did like anything you, you're growing this business and we had another business, but as it became bigger and it grew and it sort of really absorbed both of all of our time. Um, that's the way that things have moved. And I think for the better, I wouldn't want to be doing anything else than what I'm doing now. I do, I did a long time in law firms and, um, you know, it, it all helps you though. I think it's all beneficial to what you're doing today, but we both love what we do. Um, and yeah, it's just getting people involved in that and having the same experience, whatever your share percentage looks like being involved in race horses, everyone gets the same experience. And, um, it's a great world to be. And I think the marketing general suggests that if you look at the statistics of who owns a share in a racehorse in Australia, it's quite high. Um, people love being a part of it. Yep.

8:39 Why the job is 24 hours a day

Sean 8:39 Yeah, I agree. And, but it's not, you know, it's also not for the faint hearted. This isn't easy. Um, it's, it's, it's not easy at all. It is 24 seven. It is something goes wrong on a Saturday, 6am or 11pm or 2am. I'm at the farm. Um, they're the things you don't see. Like we all see the, the horses that, um, have patterns, you know, on their hinds and they look shiny and their, their feet are polished on a Saturday or Tuesday at goal, wherever it is. And, um, that's, that's what we do it for. That's the exciting part. But behind the scenes, it is 24 seven and, you know, apart from Jen, you know, working probably 14, realistically 14 hour days behind a computer, you know, we're still managing, you know, two kids and personal life as well. And same with our trainers or our trainers may have either 40 in work or, you know, 180 in work. So going from say a Nathan Doyle or a Matt Dale who might have 40 to 45 or a David Fyfe might have 38 to 42 and to a gay and Adrian might have 180 that are active. Um, imagine looking after 180 individuals that are basically your children and, but you can't speak to them. They can't speak to you and you're, you're trying to control the uncontrollable and a horse does silly things. And then you've got to go home to your kids and still manage them as well. It's, it's, um, and then on that flip side, we might have 50 to 60 owners in each horse that we have. And you've got 60 horses.

10:28 Managing expectations of 50 to 60 owners

Gen 10:28 So, and it's the expectations as well. Like I said earlier, that people might've convinced themselves things might should go a certain way or that, you know, you might have a really exciting lead up race and everyone is so pumped to go there and then things will go awry. So you're, you're not only trying to manage what may have happened with the horse, but it's the expectations of those 50 people in that horse. Um, and it's just the everyday, like when we first started, you have to back yourself a lot to the fact that people are going to buy into what we are selling or what our experience is or what we're buying. Like that was a really big thing to do, uh, many years ago. I would page. Um, and the fact, do you look back now and you think, wow, we actually did that. You did back yourself. You were going out there and buying horses and hoping that people are going to like the product or buying and the experience we were selling them. And that was actually a really big thing back then. And it still is. It's a very saturated market.

11:26 Advice for anyone starting a syndicate

Sean 11:26 Any syndicator that's starting. Yeah. It's one thing I'll say, if you're thinking of doing it or if you are starting to strap yourself in because you won't be sleeping and you'll be stressed. You'll be, I'll get one of these whoop watches. I recommend one of them. So I don't know if they can sponsor me, but my thing rattles all day with stress. So it vibrates cause it's always high and I, on my app, it's scary to look at each night, but all jokes aside, that's why I wear this watch. Like it is a highly stressful environment. What person is a trainer and going back to our trainers, that's why it's so crucial that we manage those relationships accordingly. What person wants to get up at 3am and look after a hundred individuals that you can't control and go to bed, go to the races all day, probably travel four hours in a car, go to bed at 8.30, nine o'clock and do it all again at 3am the next day. It's ridiculous. Well, who wants to do that? But they, it's because we love it. You, it's, it's a lifestyle. It's not a job. If you got paid by the hour, you may as well just quit now because you'll be on $3 an hour. Um, it's not about the money. It's the lifestyle. It's the freedom. Um, it's the wins. There's, you'll lose 19 races out of 20. It's, you can't win. You cannot win every race. Um, and even when you do win a good race, you might find out that the horse needs six months off and it's like, when are we going to win here? Like it's, it's, it's tough and it's, um, completely stressful, but the wins and the rewards outweigh all of that. Yeah, for sure.

13:14 The hard early years

Gen 13:14 And I think there were many times like you would be, um, it would be like remiss of you if you didn't say, these are the hard times we had. This is how tough it was. And Sean just kept saying to me, we need a few really good ones and it will be worthwhile. And luckily it has turned out that way. But for us to get to that point of finding those really good horses, and it's not even just about the good horses. It's having the success of a horse that's come back from an injury or putting all of that work into a horse that makes it worthwhile. They don't always necessarily have to win major money or, you know, be at an elite level. It's the satisfaction you get on so many different levels, but.

13:54 Rebuilding and the three year lag

Sean 13:54 There's always a lot. Of course. What was tough is like when we, when, uh, Jen sort of was only just coming into my life that like when we had the big farm at Merriwaar. Yeah. Um, we had the good horses, we had the volume, we had like everything was there. And when, then when my grandfather passed and it was just, I said, oh no, I need to get out of this. Like, this is probably a good time for me to have a break. And so that was a sacrifice too, because when you started all again, you might buy yearlings, but you're not seeing that for three years. Yeah. And then the next year, those yearlings, you're not seeing. So your business models that are three year lag, every single, these yearlings that we bought this year, one or two may race before Christmas this year, but realistically they're next year or the year after.

14:42 Why reaching a Golden Slipper is so rare

Gen 14:42 And there's so much that needs to go right. Um, I think that's something I only just understand now, to be perfectly honest, to get a horse like Sheiky, that's had everything somewhat go to plan and for her to get to a golden slipper. Um, like what were the nominations for 2,400?

Sean 15:00 2,200, 2,200 horses were nommed for the slipper.

Gen 15:02 You've got a minute number of that that are eligible to race.

Sean 15:05 What makes it 14 or six? Whatever the field is like. Yeah. So if you're, if you're a horse and you still might have disappointed owners, but if you do the stats there, you've got 7,000 yearlings, whether it's sold through sales or privately, you might, you might have 7,000 yearlings sold. First of all, you're one of those 14 or 16 that are in the biggest two year old race. And then second of all, um, the 2,400 of those 7,000 yearlings that are nommed, like put things into perspective, whether you get beat 10 lengths last, it's still a bloody success and outcome. Yeah. Yeah.

Gen 15:44 So I think that's something that I've, I've only just realized after seeing a number of, or a large enough crop of horses to see how much has to just go your way for you to just be there on that day is huge. Like the statistics are well and truly against you. Um.

Sean 16:00 So all, all that positivity. Nah, um, that's, yeah, that's the end of the episode. I hope you enjoy some of the insights. It's starting to piss down rain here so we can hardly hear each other, but, um, we will, uh, see you on the next episode.

Gen 16:30 Thank you.