Three Things with Adam Balon (Innocent and JamJar Investments)

WEBVTT
00:00:00.490 --> 00:00:03.071
it can be a service, it can be an app, can be a financial service.
00:00:03.071 --> 00:00:04.181
It doesn't, doesn't matter.
00:00:04.230 --> 00:00:14.743
it's the magic that comes from solving a consumer problem and doing it in a way with a brand that makes people, gives people moments of delight is, the bit that unlocks, the magic.
00:00:15.224 --> 00:00:16.844
smarts in of itself isn't enough.
00:00:16.844 --> 00:00:25.666
we love people who, who are clear when they know stuff and when they don't know stuff and are, are confident enough to be able to say, I don't know this, but I'm going to work it out.
00:00:26.385 --> 00:00:28.006
In a time where money has been.
00:00:28.006 --> 00:00:29.975
Relatively easy to raise.
00:00:29.975 --> 00:00:34.386
People haven't worried about the execution too much cuz money can fix a lot of things.
00:00:34.435 --> 00:00:42.040
And actually that is no longer the case I think there's definitely enough, funding, I think it's just behaving in a very different way to, how behave for the last 10 years.
00:00:42.100 --> 00:00:45.000
it's not like it's terrible time for, for founders actually.
00:00:45.006 --> 00:00:47.740
I think for a certain type of founder, it's a much better time.
00:00:47.951 --> 00:00:48.947
much better time.
00:00:49.037 --> 00:00:49.682
Definitely.
00:01:02.560 --> 00:01:17.260
Hello, I'm Jamie Mitchell and welcome to All Together's Three things where I get the pleasure of talking with, some extraordinary founders and CEOs, and explore a little bit about their story and career and ask for their three things.
00:01:17.260 --> 00:01:21.780
And this is a very unusual one for me because today in the hot seat, Mr.
00:01:21.840 --> 00:01:40.713
Adam Ballon, co-founder of Innocent and Co-founder of Jam Jar Investments, and it's unusual because although I have a connection with most of my guests, not all of them, I haven't, had a conversation with someone who is such a good friend, who I've known since I was 18, for goodness sake, and who I've worked with.
00:01:41.250 --> 00:01:43.924
Worked out four different organizations.
00:01:44.037 --> 00:01:44.966
so we'll see how this goes.
00:01:44.966 --> 00:01:45.417
Welcome.
00:01:45.611 --> 00:01:46.272
Thank you, Jamie.
00:01:46.606 --> 00:01:50.356
it's also unusual because if you've done a podcast before, I couldn't find it.
00:01:50.716 --> 00:01:52.156
I don't think I've done a podcast before.
00:01:52.156 --> 00:01:52.697
That's why,
00:01:52.903 --> 00:01:54.433
Now people will have asked you,
00:01:54.563 --> 00:01:55.853
yes, probably.
00:01:55.974 --> 00:01:57.293
And you've said no.
00:01:57.700 --> 00:01:58.189
politely.
00:01:58.750 --> 00:01:59.590
and why.
00:01:59.917 --> 00:02:01.507
I don't know, really.
00:02:01.516 --> 00:02:06.016
I, I can always find things that I feel I sh should be doing that feel like they're more important.
00:02:06.186 --> 00:02:12.243
and Perhaps also for the last however many years you've had Richard alongside you to do most of the front facing
00:02:12.304 --> 00:02:13.024
That's a, that's a good point.
00:02:13.024 --> 00:02:16.804
Work-wise, he, he likes these sorts of things and I, I, I like other things.
00:02:17.043 --> 00:02:18.092
but it's nice to be here, Jamie,
00:02:18.122 --> 00:02:22.902
Well, and, and, and of course, I, I appreciate you breaking your No podcast, no interviews.
00:02:22.902 --> 00:02:23.562
No, no.
00:02:23.622 --> 00:02:24.673
Whatever rule that you
00:02:25.092 --> 00:02:26.413
It wasn't a rule to be fair.
00:02:26.413 --> 00:02:27.522
It's just the way it's worked out.
00:02:27.522 --> 00:02:27.733
But,
00:02:27.947 --> 00:02:39.575
but it is, it is, it is for a good cause because of, of course, you are one of the founding volunteer advisors at Altogether, which, essentially involved me calling you up one day saying, you're right on you.
00:02:39.575 --> 00:02:41.496
If I slap your name up on this thing,
00:02:41.729 --> 00:02:43.019
maybe an opera I couldn't refuse
00:02:43.408 --> 00:02:46.588
exactly in the middle of, in the middle of the first few weeks of lockdown.
00:02:46.588 --> 00:02:50.579
and I'm hugely appreciative of that and your time for our community.
00:02:50.579 --> 00:02:54.290
So, look, We're not gonna talk about innocent that much today.
00:02:54.420 --> 00:02:56.306
because I've covered that.
00:02:56.306 --> 00:03:02.906
When I did Douglas, but equally because I want to talk more about today, I wanna talk more about this, the, the investment world we're in.
00:03:02.906 --> 00:03:06.175
I wanna talk about Jam jar and I wanna understand that journey.
00:03:06.635 --> 00:03:11.975
forget the journey to, you know, we often talk about childhood and first jobs and all that kind of stuff.
00:03:12.436 --> 00:03:14.026
not just cause I know it and I was there.
00:03:14.195 --> 00:03:14.568
Yeah.
00:03:14.568 --> 00:03:19.068
but for other reasons really, your two big things really, of course, are innocent.
00:03:19.068 --> 00:03:20.778
And now Jam Jar is an investor.
00:03:20.919 --> 00:03:22.750
So I wanna start with this question.
00:03:23.289 --> 00:03:24.219
And this wasn't in the
00:03:24.485 --> 00:03:24.645
press.
00:03:24.694 --> 00:03:25.925
No, this wasn't, I'm slightly
00:03:26.139 --> 00:03:30.492
Richard, John and Adam walk into this room today, day put down their business plan to you.
00:03:30.800 --> 00:03:31.680
Are you gonna invest?
00:03:32.044 --> 00:03:32.284
Huh?
00:03:33.039 --> 00:03:33.729
I'd hope so.
00:03:34.094 --> 00:03:35.335
You'd hope so.
00:03:36.500 --> 00:03:36.700
I
00:03:36.700 --> 00:03:41.230
The business plan is the same one that you've presented to Morris Pinto all those years ago.
00:03:41.246 --> 00:03:41.756
Yeah.
00:03:41.897 --> 00:03:44.147
To be honest, I've looked, I've looked through that relatively recently.
00:03:44.152 --> 00:03:45.918
It was quite, it was quite a good plan.
00:03:45.978 --> 00:03:48.341
It was, we'd done a lot of work on it.
00:03:48.441 --> 00:03:54.260
but the problem was none of us had much experience in the area that we were, were in.
00:03:54.661 --> 00:04:03.007
but actually we'd, we'd spent a lot of time thinking through what we knew, what we didn't know, and thinking through what the big issues were.
00:04:03.067 --> 00:04:05.347
And I think the plan was actually pretty good.
00:04:05.531 --> 00:04:08.105
we don't see plans, we don't see plans like that these days.
00:04:08.110 --> 00:04:08.169
No,
00:04:08.211 --> 00:04:15.356
No, I'm sure you don't because I suspect years of work or at least of person hours went into it.
00:04:15.856 --> 00:04:20.387
a and there was quite a lot of time thinking about it, but let's, you know, let's just unpick this a little bit.
00:04:20.387 --> 00:04:23.637
You're, you are, I genuinely want you to imagine Yeah.
00:04:23.956 --> 00:04:28.607
The, the, the founders that walk through the door today and you guys walking through the door.
00:04:28.612 --> 00:04:33.377
What would you, what would you definitely be jumping up and now and going, there's something interesting here about this.
00:04:33.437 --> 00:04:35.627
A and what would you be going this, this is,
00:04:35.627 --> 00:04:36.857
so what, what do we look for?
00:04:36.857 --> 00:04:38.326
The first thing we look for is team.
00:04:38.437 --> 00:04:41.197
and actually I think we, we've proven we make a good team.
00:04:41.235 --> 00:04:48.959
we care about the same things, big picture, but we go about things in a different way and think about things in a different way, which I think is, such an important part of, of any team.
00:04:48.959 --> 00:04:52.728
So I think that we would tick our first box, very clearly.
00:04:52.759 --> 00:04:58.002
And indeed the reason we look for that is probably come from our own experience, that that's how it's worked really well for us.
00:04:58.098 --> 00:05:10.428
It's interesting, isn't it, because you absolutely have that kind of, as a team then and as a team now, although you have expanded that team to include Katie who adds something very important actually.
00:05:10.488 --> 00:05:10.548
Yeah.
00:05:10.889 --> 00:05:12.809
to, to you guys as investors.
00:05:13.168 --> 00:05:15.309
But back then you really did do that.
00:05:15.309 --> 00:05:31.776
You've got one person who spikes on, you know, the customer and, and marketing got one operationally nerdy, you know, into the, into the detailed John, and, and then you were sort of deals and commercial and you liked the sort of analysis that went behind that, but no one was in charge.
00:05:31.923 --> 00:05:33.572
How did you, how do you feel about that today?
00:05:33.572 --> 00:05:36.663
When people come in and they say, oh, we don't need one of us in charge.
00:05:36.692 --> 00:05:56.668
Well, we I, I suppose we would probably give people more, leeway because we had that model, but theoretically, you know, if we are constrict to ourselves, we, we would probably want a CEO even, if, if actually, most decisions are made jointly between the three of them or four of them, whatever the number of founder might be.
00:05:56.819 --> 00:06:03.209
So I think, I think we would probably want that, although I don't think we'd be as definite on that because Morris wasn't for us, frankly, and it worked.
00:06:03.543 --> 00:06:07.677
He, he was, he was such a, a brilliant investor to get on board.
00:06:07.677 --> 00:06:14.697
For people who don't know the story, and we're not going through the story, but background wise, you had one angel investor put in 250 grand on day one.
00:06:14.971 --> 00:06:15.324
And.
00:06:15.658 --> 00:06:18.192
That lasted you for however many
00:06:18.252 --> 00:06:18.432
Yeah.
00:06:18.432 --> 00:06:18.942
10 years.
00:06:18.942 --> 00:06:21.642
And he made a hun more than a hundred times his money when, when finally sold.
00:06:21.642 --> 00:06:22.333
So he, he
00:06:22.392 --> 00:06:26.512
and indeed built a hundred million pound business, you know, so, they don't do it like that these days.
00:06:26.853 --> 00:06:28.473
well, we'll talk about that, I guess a little bit.
00:06:28.473 --> 00:06:31.622
So, okay, so you go, you guys come in, you are impressed by the team.
00:06:31.622 --> 00:06:32.463
You are young, though.
00:06:32.598 --> 00:06:34.208
young young experience.
00:06:34.627 --> 00:06:34.807
Yeah.
00:06:35.108 --> 00:06:41.648
So, so I don't youth, I think we, we see young teams that's, you know, that's never a downside in and of itself.
00:06:41.767 --> 00:06:47.077
The only issue is if you're very young and you've got absolutely no experience in the area you're in, that's, that's more of an issue.
00:06:47.077 --> 00:06:47.648
So,
00:06:47.661 --> 00:06:50.601
but you, built the business early on incident on naive intelligence.
00:06:50.927 --> 00:06:51.317
Yes.
00:06:51.317 --> 00:06:58.367
And naivety could be hugely, hugely useful because, Hugers sometimes wouldn't go into an industry if you knew too much about it.
00:06:58.560 --> 00:07:01.620
you know, food and drink industry is, we now know really hard.
00:07:01.959 --> 00:07:03.370
it's really hard to make money in.
00:07:03.370 --> 00:07:10.269
And so we are very cautious, actually, ironically, about investing in food and drink because we know how tough it is to get great margins.
00:07:10.269 --> 00:07:15.850
You can come up with a great idea of product, but once you start distributing through supermarkets, you're into, you know, it's a, it's a hard gig.
00:07:16.250 --> 00:07:20.980
so, so your investment approach today, you're very much focused on consumer businesses.
00:07:20.980 --> 00:07:21.250
Absolutely.
00:07:21.350 --> 00:07:24.670
but beyond, beyond that, your, your industry agnostic.
00:07:24.720 --> 00:07:28.735
Yeah, it's consumer not in the traditional sense that consumer goods, but anything with a consumer brand.
00:07:28.735 --> 00:07:31.524
So it can be a service, it can be an app, can be a financial service.
00:07:31.524 --> 00:07:32.634
It doesn't, doesn't matter.
00:07:32.685 --> 00:07:48.245
and, and I think that's important because we think it's the, it's the, the magic that comes from solving a consumer problem and doing it in a way with a brand that makes people, gives people moments of delight is, is the sort of the, the bit that unlocks, hopefully the, the magic.
00:07:48.593 --> 00:07:49.310
And in terms.
00:07:49.699 --> 00:07:56.663
Stage of companies that you invested in, how early are you, getting into businesses, and how late do you sometimes get into businesses?
00:07:56.723 --> 00:08:01.079
So, we'll, we'll, invest on the back of a idea, a piece of paper.
00:08:01.161 --> 00:08:09.740
but probably if the entrepreneur or entrepreneurial team has got experience in that area, I think first time through with a blank sheet of paper, we'd find it hard.
00:08:09.740 --> 00:08:12.990
And that's where we would've, put a blank mark against ourselves.
00:08:13.108 --> 00:08:15.478
by the end of this conversation, you'll, you'll have changed your mind.
00:08:15.478 --> 00:08:16.677
You're not investing in you guys.
00:08:16.853 --> 00:08:17.387
yeah, yeah, exactly.
00:08:17.574 --> 00:08:22.353
but, but so so especially, I guess if, if this is some, an entrepreneur who's done it before Absolutely.
00:08:22.413 --> 00:08:25.894
Or they, they really bring something unique from that industry that they understand.
00:08:26.733 --> 00:08:28.744
Smaller amounts than are possible for you guys.
00:08:28.749 --> 00:08:30.814
You, because you have raised a fund.
00:08:30.814 --> 00:08:32.433
This, it used to be Euro own money.
00:08:32.433 --> 00:08:33.413
You're investing as sort of a.
00:08:33.687 --> 00:08:34.648
Mini Angel Group, right?
00:08:34.716 --> 00:08:34.912
Yeah.
00:08:34.912 --> 00:08:37.611
So Jam Jar started just as a sort of mini family office really.
00:08:37.611 --> 00:08:44.662
We, three of us didn't really know what we were gonna do after innocent, so we, we started to get approaches from people looking for investment.
00:08:44.662 --> 00:08:46.822
We actually quite enjoyed those conversations.
00:08:46.826 --> 00:08:50.572
So thought, let's, let's set, set it up whilst we're thinking of our next business idea.
00:08:50.572 --> 00:09:04.150
And sort of went from probably not, not enjoying it that much at first because you, it is the difference between being an operator and running everything and being in charge versus being an investor where you are not you, you, you are absolutely investing in other people's businesses.
00:09:04.522 --> 00:09:05.086
it's quite hard
00:09:05.611 --> 00:09:07.682
Oh, it's, it's definitely hard and it's a big adjustment.
00:09:07.687 --> 00:09:20.524
And even though theoretically we knew that it was still quite tough to live it, day to day when you think people are doing or you'd want to do things in a different way, all you can do is influence and argue and debate rather than actually change it.
00:09:20.524 --> 00:09:22.715
And that's, you know, that can be quite frustrating sometimes.
00:09:22.960 --> 00:09:38.184
But what we did love, certainly I did, was that this breadth that we got really thinking deeply about not just, bottles of juice on shelves, but you know, might be pet food or it might be, medical, devices, or it might be car seats or it might be, car insurance.
00:09:38.190 --> 00:09:46.650
It's like actually, you start learning quite a lot about different industries, which are, fascinating, you know, that that's the, that's the gray matter building stuff that I really enjoy on this.
00:09:46.750 --> 00:10:02.828
and, you know, it's one of the, again, going back, one of the aspects of, of Innocent as an organization from very early on, because of the three of your minds, the intellectual robustness and, and capability was always supercharged.
00:10:02.828 --> 00:10:07.638
It's been very hard to find businesses with, that level of, of intellectual robustness since.
00:10:07.697 --> 00:10:13.248
How important is that when you're looking at these, the, these entrepreneurial teams that they've, they've got a real.
00:10:13.503 --> 00:10:14.702
A set of smarts on
00:10:14.822 --> 00:10:16.263
de Definitely, definitely.
00:10:16.263 --> 00:10:18.633
But, but smarts in of itself isn't, isn't enough.
00:10:18.633 --> 00:10:19.653
You want people to be smart.
00:10:19.658 --> 00:10:24.225
It doesn't have to be educated smart, but it just has to be smart in the area that matters for the, for their business.
00:10:24.304 --> 00:10:34.349
and, we love people who, who are clear when they know stuff and when they don't know stuff and are, are, are confident enough to be able to say, I don't know this, but I'm going to work it out.
00:10:34.558 --> 00:10:39.153
Self-awareness is a, is a, is is a learnt trait for, for many of us.
00:10:39.178 --> 00:10:39.509
Yeah.
00:10:39.538 --> 00:10:41.724
and because, you know, it shows an element of confidence.
00:10:41.724 --> 00:10:45.924
It's like, I don't need to pretend I know everything And it, it's funny, there's, there, there is a genre.
00:10:45.924 --> 00:10:47.934
who sort of has to present this.
00:10:47.934 --> 00:10:48.955
I, I'm in charge of everything.
00:10:48.955 --> 00:10:49.615
I know everything.
00:10:49.615 --> 00:10:51.085
And I, I, I can do it all.
00:10:51.085 --> 00:10:53.654
And actually just you know, frankly doesn't reflect the world.
00:10:53.654 --> 00:10:54.284
that's an interesting one.
00:10:54.284 --> 00:11:04.613
We'll come back to it when it, when it comes to, to your investment philosophy almost because that, that entrepreneur is almost the poster child of, of the venture capital community.
00:11:04.613 --> 00:11:08.009
But wanna come to Theran, talk about that transfer moment.
00:11:08.110 --> 00:11:18.658
altogether, did a, a session last, oh gosh, summer talking about, when it's time to bring in CEOs, when it's time to leave as a founder, when you know, and then how do you handle.
00:11:19.327 --> 00:11:25.370
Departure, that sense of loss, which is the best way I found to describe it.
00:11:25.379 --> 00:11:25.779
Mm-hmm.
00:11:26.009 --> 00:11:28.009
how did each of you handle that loss?
00:11:28.009 --> 00:11:33.619
Well, first of all, you know, strategically as a group, you, you handled it slightly by not really leaving.
00:11:33.780 --> 00:11:34.171
Yes.
00:11:34.171 --> 00:11:37.110
we we handled, I, I think there was a number of important points.
00:11:37.171 --> 00:11:41.500
one, you know, we'd been in the business for 14 years by the time we stepped out.
00:11:41.500 --> 00:11:49.301
And actually, so each of us thought it was time to leave by then when we first did our investment deal with Koch, which set us on a path to, to exit.
00:11:49.630 --> 00:11:55.240
I don't think we were all aligned around wanting to leave at that point, or, or were, weren't convinced that was the right thing.
00:11:55.660 --> 00:11:58.061
By the time, it was time to step out.
00:11:58.091 --> 00:12:01.331
We, we were, each of the three of us were very, very happy to be doing so.
00:12:01.431 --> 00:12:06.780
because a, I think we'd, turned the business around, so we felt like we were leaving on a high rather than on a loan.
00:12:07.150 --> 00:12:14.471
b I think we felt it was in a good place for the future, Douglass and the rest of his team there to, to take it on and a good shareholder and cope who wanted it to grow,
00:12:14.664 --> 00:12:16.404
and wanted to have its independence
00:12:16.480 --> 00:12:22.059
absolutely all that stuff that, that, that, that was really important, for us and for, for the team and for the future of the business, frankly.
00:12:22.429 --> 00:12:28.850
and, and three, I think we started to open our eyes to, there's another world out there of all this other stuff and actually really want to get into that.
00:12:28.904 --> 00:12:34.357
and, and you know what the, the sort of intellectual curiosity was like, I, I, I've, I've gotta think about something else.
00:12:34.357 --> 00:12:39.427
I can't just keep thinking about the stuff that frankly, it's important to keep this business really moving forward.
00:12:39.432 --> 00:12:41.618
And you need people who operate brilliantly.
00:12:41.618 --> 00:12:52.602
And that's what we built the team to have people who get a real kick from that operational excellence and, just making, brilliant smoothies day in, day out, make sure when they're on the shelves
00:12:52.648 --> 00:13:08.552
It's a fascinating, so, so, you know, coming back into this and, you know, looking at other people The intellectual curiosity that mind, that is curious is, is something that leads you to that robustness of thought in, in, your business that you appreciate.
00:13:08.787 --> 00:13:23.389
But it is also part of a personality that when it comes down to a certain point in a business of operating day by day, quarter by quarter, year by year, th there's no intellectual stimulation, less intellectual stimulation to be had.
00:13:23.509 --> 00:13:23.750
Yeah.
00:13:23.870 --> 00:13:32.142
Now, I think this is why entrepreneurs in in venture can hang on, because if it's still flying upwards at ridiculous speed Yeah.
00:13:32.142 --> 00:13:36.261
You know, every minute or every day is slightly different from the last one and so on.
00:13:36.261 --> 00:13:36.381
Yeah.
00:13:36.386 --> 00:13:45.912
But, so, but what's the balance here when you're looking for an, an entrepreneur and a founder who's got that intellectual curiosity and someone who's gonna stay the distance as an operator
00:13:46.236 --> 00:13:49.961
I, I, think, I think you need, and this is why we look at teams, because I think you need both.
00:13:49.961 --> 00:13:59.351
I think you need someone who's, who's can see the future, can, can add the new chunks of business to steer it in the right direction for the first five, 10 years of the business.
00:13:59.351 --> 00:14:07.740
Which is, which is about that curiosity, which is about, thinking about the new, it is about being comfortable with the vaguery, but then you need someone who's actually operating it to make it work.
00:14:07.923 --> 00:14:13.354
it's the old ceo, COO O It's like Richard Branson always had the, the operators underneath
00:14:13.578 --> 00:14:14.239
Absolutely.
00:14:14.239 --> 00:14:16.729
And, and that's been less important in a time.
00:14:16.908 --> 00:14:19.759
We we're moving forward a bit, but in a time where money has been.
00:14:19.759 --> 00:14:21.729
Relatively easy to raise.
00:14:21.729 --> 00:14:26.139
People haven't worried about the execution too much cuz money can fix a lot of things.
00:14:26.198 --> 00:14:26.739
and
00:14:26.918 --> 00:14:28.778
we can throw a team around this
00:14:29.198 --> 00:14:29.948
Yeah, exactly.
00:14:29.948 --> 00:14:37.828
And actually that is no longer the case and execution, which has always been something that we, we've, focused in on is becoming more important I think, across the market.
00:14:38.263 --> 00:14:43.263
I'm interested in, in just a further exploration, we, Kim, going back to this investment decision, aren't we?
00:14:43.413 --> 00:14:48.509
Because the two things that you just described, the exemplar of the entrepreneurial vision.
00:14:48.509 --> 00:14:48.570
Yeah.
00:14:48.659 --> 00:14:50.870
Creative, you know, Richard Reid.
00:14:50.899 --> 00:14:51.200
Yeah.
00:14:51.259 --> 00:14:53.419
The exemplar of the operator.
00:14:53.480 --> 00:14:53.779
Yeah.
00:14:53.779 --> 00:14:55.934
you know, this is how we need to do it
00:14:56.019 --> 00:14:57.119
it's going Yeah.
00:14:57.575 --> 00:14:58.894
we, the referee, no,
00:14:59.240 --> 00:14:59.509
No.
00:14:59.509 --> 00:15:00.274
You gotta turn into money.
00:15:00.274 --> 00:15:01.534
And that's, that's, that's the thing.
00:15:01.534 --> 00:15:02.644
The system can work well.
00:15:02.644 --> 00:15:04.793
The vision can be brilliant, but if you're not making money, it doesn't matter.
00:15:04.879 --> 00:15:11.307
that's so the, the sales, the salesperson, now you are a salesperson in many ways, very natural salesperson.
00:15:11.307 --> 00:15:13.706
But actually, what is it that makes you.
00:15:13.865 --> 00:15:15.184
A salesperson.
00:15:15.307 --> 00:15:15.577
funny.
00:15:15.577 --> 00:15:18.475
I don't really, I don't think myself as a salesperson at all, actually.
00:15:18.480 --> 00:15:18.840
and,
00:15:19.049 --> 00:15:20.039
let me put it another way.
00:15:20.179 --> 00:15:20.899
Do you like to lose?
00:15:21.043 --> 00:15:21.222
No.
00:15:21.852 --> 00:15:21.972
Hmm.
00:15:22.116 --> 00:15:22.236
Yeah.
00:15:22.241 --> 00:15:23.317
I'm competitive, but yeah.
00:15:23.317 --> 00:15:24.216
Plenty of people aren't, right.
00:15:24.653 --> 00:15:25.852
you more competitive than the others?
00:15:26.109 --> 00:15:26.649
I dunno.
00:15:26.649 --> 00:15:27.159
I don't think so.
00:15:27.250 --> 00:15:34.732
I, I, think we're all pretty competitive, but but sort of in a, I actually a lot to say, I, I really like finding solutions to problems, commercial problems.
00:15:34.793 --> 00:15:41.409
So finding a, a win-win, a way of making something, you know, that works for us and works for a customer and I'm good with numbers.
00:15:41.409 --> 00:15:43.029
So I think the combination of those
00:15:43.212 --> 00:15:51.700
and, and how often do we see salespeople who are just, they got the gift of the gab, but actually that intellect that's required.
00:15:51.914 --> 00:15:56.504
To find the solution, to find the, the negotiated outcome that works for everybody.
00:15:56.504 --> 00:15:58.184
That's clever, frankly.
00:15:58.259 --> 00:15:58.590
Yeah.
00:15:58.595 --> 00:15:58.629
Yeah.
00:15:58.684 --> 00:16:01.312
you've gotta have both to a certain extent.
00:16:01.322 --> 00:16:02.493
think you need to be able to listen as well.
00:16:02.682 --> 00:16:04.302
Selling is actually about listening
00:16:04.648 --> 00:16:07.197
to, to, to the other side's needs, right?
00:16:07.197 --> 00:16:07.258
Yeah.
00:16:07.302 --> 00:16:07.582
Yeah.
00:16:07.587 --> 00:16:07.812
Yeah.
00:16:07.993 --> 00:16:10.393
Because then you could, then you can work out the solution.
00:16:10.638 --> 00:16:15.197
Um, so a sense of, I I, I'm gonna go back to this question of a sense of loss.
00:16:15.227 --> 00:16:17.118
So was there a sense of loss?
00:16:17.327 --> 00:16:17.408
leave?
00:16:17.413 --> 00:16:17.577
No.
00:16:17.577 --> 00:16:22.437
I I think actually I was, I was ready and then I, I was, I was happy with the outcome, happy with where it left.
00:16:22.437 --> 00:16:24.898
And I think what was hard was, okay, so what's next?
00:16:24.898 --> 00:16:27.658
It wasn't the sense of loss there, it was the, it was clear it was the right
00:16:27.721 --> 00:16:29.232
thing You were still very young.
00:16:29.472 --> 00:16:32.143
All three of you, you, you'd made a chunk of cash.
00:16:32.322 --> 00:16:32.442
Yeah.
00:16:32.503 --> 00:16:37.812
Was it what's next in terms of what I do with my time or, or were we getting philosophical about, you know, what's next?
00:16:37.812 --> 00:16:40.794
How, what's life about if I've gone achieved so much, so early?
00:16:41.200 --> 00:16:44.889
I, I think it was definitely what's, what's my next gig work thing?
00:16:44.919 --> 00:16:56.424
and I wanted intellectual stimulation and, I wasn't going to sit down and do a PhD or something, something, so I, you know, The commercial world of the business world is sort of something I, I enjoy.
00:16:56.424 --> 00:16:58.735
So, it was what's gonna be next there?
00:16:58.735 --> 00:17:02.424
and and Jam j was strangely unfulfilling for the first couple of years.
00:17:02.845 --> 00:17:04.105
It was, yeah.
00:17:04.105 --> 00:17:08.755
It was really bec because of the point I made that we, you know, we, we weren't the owners.
00:17:08.759 --> 00:17:13.615
We were sort of the, the investors and we didn't know how to play the role of investors really.
00:17:13.615 --> 00:17:14.394
What were we doing?
00:17:14.394 --> 00:17:15.865
What are we just placing?
00:17:15.865 --> 00:17:16.345
Random bet.
00:17:16.345 --> 00:17:17.785
It felt like we were placing random best
00:17:17.785 --> 00:17:21.595
and you got invited in or were able to get into some amazing deals.
00:17:21.622 --> 00:17:21.984
Yeah.
00:17:21.984 --> 00:17:22.082
Off
00:17:22.105 --> 00:17:24.805
the back of your success, people wanted you on their
00:17:24.872 --> 00:17:26.484
shareholder Yeah.
00:17:26.484 --> 00:17:31.315
Which was, which was great and flattering and, and realized actually how helpful that was.
00:17:31.315 --> 00:17:37.075
But it only was a what, after a while you started forming the patterns and building the building blocks.
00:17:37.704 --> 00:17:42.295
What makes good investment decisions and what, what's the process that we should run on this?
00:17:42.295 --> 00:17:48.325
And, And, once you started getting into a pattern, rather than just making random bets, which is what it felt like at first mm-hmm.
00:17:48.404 --> 00:17:52.765
Then the enjoyment started to come because it was like, ah, okay, I actually, I can see this.
00:17:52.765 --> 00:17:55.224
Is, this is, there's a way of doing this.
00:17:55.285 --> 00:17:58.075
And again, three of you on three different journeys.
00:17:58.670 --> 00:18:01.609
at what point was it clear to all three of you?
00:18:02.059 --> 00:18:08.750
Oh, we found our new business rather than, but shouldn't we be looking at whatever was hot
00:18:09.035 --> 00:18:09.275
Yeah.
00:18:09.279 --> 00:18:15.994
I th I think with it probably took four years, maybe, you know, so it wasn't instant, wasn't particularly quick.
00:18:15.994 --> 00:18:19.595
Now, the good thing was we, we, you know, we weren't pressured to have to work, do any of those things.
00:18:19.595 --> 00:18:21.009
We said we could, we could take it at the time
00:18:21.201 --> 00:18:33.097
I always remember one of the things Morris Pinto said to me very early on when I was writing that case study on you guys, and he said, what amazes me about these guys is how long they take on their decisions.
00:18:33.249 --> 00:18:41.462
I mean, you know, they sit in that room presenting PowerPoint to each other, find the next reason not to quite make the decision and move on and move on.
00:18:41.626 --> 00:18:45.134
but I tell you, I have never met a team with a high hit rate.
00:18:45.384 --> 00:18:46.243
Of good decisions.
00:18:46.445 --> 00:18:49.395
And I almost quoted him word for word there.
00:18:49.395 --> 00:18:49.455
Yeah.
00:18:49.486 --> 00:18:56.806
Because I thought it was a fascinating dichotomy of, of speed of decision making, which we know in, in business sometimes it's really important just to make a decision.
00:18:56.806 --> 00:18:56.865
Yeah.
00:18:57.165 --> 00:18:58.516
Rather than procrastinate.
00:18:58.875 --> 00:19:02.476
But he was calling it and saying, you know what the balance was Right.
00:19:02.476 --> 00:19:04.276
For these guys in, in their business.
00:19:04.576 --> 00:19:08.442
Now you took a long time deciding to quit your jobs and found innocent.
00:19:08.442 --> 00:19:16.242
Having for, you know, been talking for years about doing a business together and here you go, another three or four year period of talking about being investors
00:19:16.393 --> 00:19:17.553
before you Yeah.
00:19:17.553 --> 00:19:17.721
Yeah.
00:19:19.001 --> 00:19:20.353
def definitely, definitely.
00:19:20.452 --> 00:19:31.823
but it's interesting when, when we started, then once we started coalesce around, actually we, we think we know what we're doing here and there's a process to do this and a pattern and, you know, we think we can actually genuinely add value to, to people's businesses.
00:19:31.827 --> 00:19:45.198
And I know how to interact with founders in a, in a way that's constructive rather than that then started to feel really good and the, the energy started to come, and then you start to get the old feeling of bouncing the ideas around each other and with a new team as well, with Katie.
00:19:45.202 --> 00:19:53.238
And, and, and then it became clear that actually with our own capital, we just didn't have enough capital to do justice to what we thought we could achieve in the area.
00:19:53.482 --> 00:19:56.333
was that part of the decision really to, to No.
00:19:56.337 --> 00:20:02.326
Cause it, the, the, the decision to do your, your own fund came after your sort of period of is this what we're going to
00:20:02.426 --> 00:20:03.297
Oh yeah, definitely,
00:20:03.416 --> 00:20:03.626
Definitely.
00:20:03.626 --> 00:20:06.537
So you made, you had a decision saying, we are gonna stick jam jar's our thing,
00:20:06.596 --> 00:20:07.346
jam jar's our thing.
00:20:07.346 --> 00:20:08.126
Yeah, Exactly.
00:20:08.126 --> 00:20:13.279
and then, And the next decision was, was actually, look, you know, we've got some great people in the team.
00:20:13.279 --> 00:20:15.829
We, we need to show commitment to, to people.
00:20:15.835 --> 00:20:19.490
We, we need to be able to keep these people and track new great ones.
00:20:19.490 --> 00:20:26.784
And it's slightly tougher to do if it's all just investing, you know, a pool of capital that may or may not be there.
00:20:26.814 --> 00:20:34.163
So there was a bit of team thing, there was a bit of, actually we just don't have enough capital to, to be able to back our winners really heavily.
00:20:34.564 --> 00:20:42.114
and therefore we are not as important to those founders as we could be, if we actually were a bigger part of their cap table.
00:20:42.114 --> 00:20:47.551
and we started to build relationships with LPs who were like liking the way we were thinking what we were doing.
00:20:47.557 --> 00:20:50.162
And so the whole thing was like, actually maybe we can.
00:20:50.250 --> 00:20:51.390
Fashion something here.
00:20:51.440 --> 00:20:56.750
and, and so we decided to raise a fund, which then took absolute ages because of co forever.
00:20:56.930 --> 00:20:59.240
But, but the good thing was time.
00:20:59.244 --> 00:21:00.079
We thought about it for a while.
00:21:00.140 --> 00:21:01.220
We thought about it for a long time.
00:21:01.224 --> 00:21:04.430
Then it was the prep of actually how do, what's the right structure?
00:21:04.490 --> 00:21:05.809
You know, is it a, a traditional fund?
00:21:05.809 --> 00:21:14.660
And we were gonna do, trying to do something completely different and actually ended up in a traditional fund structure because actually they're really, it is very tough to do it very different.
00:21:14.660 --> 00:21:16.609
And we went round the houses on that for ages.
00:21:16.940 --> 00:21:25.180
And then when we decided to do that, it then took a long time to, to, to not, not to raise the money actually weirdly, to do the detail on closing the money.
00:21:25.184 --> 00:21:27.160
That was, that was complex thing.
00:21:27.234 --> 00:21:27.744
It was.
00:21:27.744 --> 00:21:32.164
And, and then did, it surprised me how long it, it, it took sort of watching from the outsides.
00:21:32.164 --> 00:21:32.365
Mm-hmm.
00:21:32.444 --> 00:21:33.984
From the, from the conversations we'd had.
00:21:34.384 --> 00:21:40.407
I think your answer to the question is fascinating by the way, cuz your first answer there, as to why you moved to the fund was about people.
00:21:40.413 --> 00:21:40.538
Mm-hmm.
00:21:40.684 --> 00:21:52.057
Which at the end of the day, unless you've got a, an investor or you are a business owner who has a, a a rate of return requirement is, is almost the only reason to grow at any particular pace.
00:21:52.087 --> 00:21:52.178
Mm-hmm.
00:21:52.423 --> 00:21:52.488
Right.
00:21:52.488 --> 00:21:53.887
And you can't, you've gotta grow, you can't decline.
00:21:53.887 --> 00:22:00.563
But, you know, in the philosophy of why grow, and I had a lovely conversation with Tom Elliot, the founder of, pizza Pilgrims about this mm-hmm.
00:22:00.643 --> 00:22:02.923
Who has taken, you know, institutional money.
00:22:02.928 --> 00:22:04.663
So there is pressure to grow Yeah.
00:22:05.053 --> 00:22:09.932
But for whom, he'd rather not grow if it's not doing the right thing by his team.
00:22:10.079 --> 00:22:11.890
and you had some great people Yeah.
00:22:11.894 --> 00:22:19.307
Who frankly were doing a lot of the legwork Cuz you know, you're not, you're not in the, in, in the world of doing your own basic analysis anymore.
00:22:19.311 --> 00:22:25.982
You want analysts, you want, you've got, you've got people who you want to grow and develop and, and they're unlikely to do it doing your bit investments.
00:22:26.426 --> 00:22:29.224
Then the second one is, More ego.
00:22:29.315 --> 00:22:33.154
No ego's not the right reason, but, but to, to, it is partly ego.
00:22:33.154 --> 00:22:35.768
So I to really enjoy this work for me.
00:22:35.857 --> 00:22:37.298
So I don't mean ego in the negative way.
00:22:37.298 --> 00:22:38.857
I mean about enjoying the work.
00:22:39.115 --> 00:22:47.852
I need more power, more influence, more responsibility to come with our investments rather than just be the, the sort of people that get pulled in as part of round.
00:22:47.852 --> 00:22:48.571
Yes.
00:22:48.602 --> 00:22:49.021
Yeah.
00:22:49.021 --> 00:23:02.994
I, it be, it became clear that the founders sort of enjoyed the conversations with us and we could, we felt like we could add stuff, but frankly we had too little money invested in any one deal to make it make sense, spending a lot of time.
00:23:03.265 --> 00:23:12.174
And the other side, the founders, we had two little money invest in, in their cap table for them to really listen to us rather than three or four other voices around a cap table.
00:23:12.180 --> 00:23:12.654
And so
00:23:12.835 --> 00:23:15.954
you were just advisors to be called on as and when.
00:23:15.960 --> 00:23:16.224
Yeah.
00:23:16.585 --> 00:23:19.434
And again, looking for your intellectual curiosity.
00:23:19.657 --> 00:23:27.067
you want to be more involved with some of the decision making or some of the naughty problems, it's unlikely to happen after a while.
00:23:27.488 --> 00:23:27.968
Exactly.
00:23:28.218 --> 00:23:28.928
I get that.
00:23:28.932 --> 00:23:41.542
and, and and it's interesting coming back then to this question of the three operators who operated together in one business being three quarters of the partners in a, in a, in a venture capital fund where it's a very different role.
00:23:41.633 --> 00:23:41.692
Yeah.
00:23:41.692 --> 00:23:44.512
Investing versus operating and you are all the same operators.
00:23:44.603 --> 00:23:47.413
No, you're not, you're very different operators, but your same History.
00:23:47.972 --> 00:23:51.722
it's, it's not necessarily, again, the blueprint of, of venture capital team.
00:23:52.143 --> 00:23:56.913
No, it's inter We do, whilst we all will, one of the four of us will lead on a deal.
00:23:56.972 --> 00:23:58.442
It's not like that deal.
00:23:59.087 --> 00:24:01.458
You know, only that person's and no one else gets involved.
00:24:01.458 --> 00:24:04.397
We actually pull each other in quite a lot into each other's deals.
00:24:04.397 --> 00:24:07.307
It's like, okay, there's a, there's, there's a, there's a manufacturing issue here.
00:24:07.307 --> 00:24:08.748
John, can you go and have a look at this?
00:24:08.837 --> 00:24:09.887
There's a brand thing here.
00:24:09.887 --> 00:24:11.448
Rich, come and do this workshop.
00:24:11.448 --> 00:24:11.657
We, We,
00:24:11.722 --> 00:24:17.222
we we at Urban Legend have benefited from John and we've benefited from Richard coming in and doing exactly those things.
00:24:17.301 --> 00:24:19.461
And it's brilliant, by the way, right?
00:24:19.761 --> 00:24:20.872
I mean it, but, but it is.
00:24:21.021 --> 00:24:30.007
Yeah, because, and, and this is the bit that I think, you know, people, people understand who are sort of part of your portfolios when they need someone to come in.
00:24:30.007 --> 00:24:31.416
Talk about marketing and creative.
00:24:31.446 --> 00:24:31.936
You've got.
00:24:32.238 --> 00:24:33.317
Best brains in the world.
00:24:33.347 --> 00:24:33.617
Yeah.
00:24:33.678 --> 00:24:34.548
For this.
00:24:34.548 --> 00:24:34.877
Yeah, definitely.
00:24:34.907 --> 00:24:36.557
In terms of stimulating your thinking.
00:24:36.617 --> 00:24:36.768
Yeah.
00:24:36.988 --> 00:24:38.728
and and same for, same for John.
00:24:38.728 --> 00:24:39.657
And actually same for you.
00:24:39.657 --> 00:24:41.877
We, you are always gonna get something very different.
00:24:42.218 --> 00:24:42.998
What do you miss?
00:24:43.028 --> 00:24:45.877
Not being, what do you miss being operators?
00:24:45.978 --> 00:24:51.724
what's the negative from a founder's point of view of the fact your former operators rather than investors.
00:24:51.724 --> 00:24:52.174
Do you think?
00:24:52.634 --> 00:24:58.934
I think if we can be disciplined enough not to, not to say, oh, look, in my day or in my business, this is how you do it.
00:24:58.934 --> 00:25:01.375
And, and be kind of, too didactic about it.
00:25:01.375 --> 00:25:03.595
I'm not sure there is a massive downside.
00:25:03.644 --> 00:25:08.170
because actually we've just got more empathy with the position that founders are in.
00:25:08.269 --> 00:25:21.680
you know, we, we've been done that and we know that it, it can be really tough and the logic can be saying this, but, but the heart is saying that, and all those emotional decisions, the complexity of having big teams, all of that stuff is, is stuff we've lived and breathe.
00:25:21.680 --> 00:25:29.180
And so as long as we can, remember that it's their business and we are investors in helping them, then I think actually it's a, it's a pure positive.
00:25:29.244 --> 00:25:35.904
Now, you know, you could have described word for word the transitional challenge I had moving from CEO to chair.
00:25:36.365 --> 00:25:39.849
and you know, you have to keep reminding yourself of that.
00:25:40.029 --> 00:25:46.569
But equally you have to make that decision of when you do go in and say, I want to talk about this.
00:25:46.575 --> 00:25:51.390
Yeah, it's self-discipline, which, you know, the three of you have in, in bundles anyway, I should think.
00:25:51.819 --> 00:25:56.289
but it is, it is a, it is a requirement to sort of, as you say, know the right way of going.
00:25:56.319 --> 00:26:05.049
Cause otherwise you, the worst is you wouldn't get to add the value or you get to bloody be on top of these founders and they wouldn't wanna be with you
00:26:05.065 --> 00:26:05.335
Yeah.
00:26:05.335 --> 00:26:05.605
Anymore.
00:26:05.664 --> 00:26:05.994
Yeah.
00:26:06.125 --> 00:26:13.285
And, and, and actually remaining very open to the fact that, You've got a lot that you can learn from people.
00:26:13.285 --> 00:26:17.845
You've backed people because you think they're great, and frankly, you'd be happy working for them.
00:26:17.875 --> 00:26:20.694
That's kind of a good test for, an investment.
00:26:20.944 --> 00:26:23.734
and, and they're gonna teach you something.
00:26:23.734 --> 00:26:27.214
So it's not just about stuff that you've done, and therefore you've gotta do that.
00:26:27.365 --> 00:26:27.904
I like
00:26:27.944 --> 00:26:29.644
Well, I mean, where's the learning in that?
00:26:29.674 --> 00:26:34.438
Where's the intellectual curiosity, satisfaction in just being the person giving all the answers.
00:26:34.548 --> 00:26:34.788
Hey.
00:26:35.788 --> 00:26:38.107
Let's, let's talk about your investment philosophy for a second.
00:26:38.137 --> 00:26:38.317
Mm-hmm.
00:26:38.647 --> 00:26:45.218
We, we already made a slight reference that, you know, it's not quite the traditional VC mentality.
00:26:45.278 --> 00:26:50.917
you're not constantly looking for the founder who wants to take over the entire world, create the next unicorn.
00:26:50.978 --> 00:27:04.387
We have to say decor now, you know, it's not but, you know, so, how do you differ fr from that point of view in terms of, you know, what's the deal that you might do that, that index wouldn't do or that, you know, some of the traditional big VCs wouldn't do?
00:27:04.450 --> 00:27:11.106
Yeah, I mean versus the big guys, the fund returners for us is a far smaller scale outcome than a fund returner for someone like Index.
00:27:11.178 --> 00:27:21.827
for those who don't understand what that means, the fund returner a concept is that, you know, one out of 10 will actually make all the money because the risk is so high when you put your money into these early stage businesses, right.
00:27:21.827 --> 00:27:23.113
the upside has gotta be big enough.
00:27:23.117 --> 00:27:28.843
So you've got a bit back businesses that can be big enough, frankly, scale, back back scale to, to, to, you know, huge scale.
00:27:28.998 --> 00:27:33.718
But, but so your, your, fund is small enough that a fund returner doesn't have to be,
00:27:33.742 --> 00:27:36.803
doesn't doesn't have to be, you know, a Absolutely.
00:27:36.893 --> 00:27:39.292
Instead of, you know, a hundred billion global business.
00:27:39.353 --> 00:27:39.623
Yeah.
00:27:39.893 --> 00:27:40.762
That's just, you know,
00:27:41.032 --> 00:27:42.240
and most businesses aren't,
00:27:42.260 --> 00:27:44.373
aren't, definitely, most businesses are not that.
00:27:44.932 --> 00:27:55.560
But, but it seems to me that there's a sort of, there's a perversity in the venture capital world of, of, you know, ever increasing size of funds being raised, which makes the requirement be, I need my unicorns.
00:27:55.560 --> 00:27:56.851
I need my unicorns.
00:27:56.935 --> 00:27:58.556
I suppose you get the new funds coming along.
00:27:58.556 --> 00:28:03.246
Filling in the gap is, is it, but is there enough funding for the bus, the normal businesses out there that
00:28:03.505 --> 00:28:06.978
I think there's definitely enough, enough funding, I think, I think it's still there.
00:28:06.982 --> 00:28:10.907
I think it's just behaving in a very different way to, to, to how behave for the last 10 years.
00:28:10.998 --> 00:28:11.087
Mm-hmm.
00:28:11.333 --> 00:28:14.032
so look, Valuations aren't more sensible, frankly.
00:28:14.242 --> 00:28:16.282
We're talking now post crash, right?
00:28:16.288 --> 00:28:16.373
Yeah.
00:28:16.432 --> 00:28:17.393
We're talking Today,
00:28:17.410 --> 00:28:19.282
Today, Yeah.
00:28:19.282 --> 00:28:19.712
Go on.
00:28:19.712 --> 00:28:19.992
Yeah.
00:28:19.998 --> 00:28:27.233
So, you know, coming from the big public markets through to, the growth rounds, the, the, the valuations have by it.
00:28:27.324 --> 00:28:27.534
Yeah.
00:28:27.683 --> 00:28:30.153
It's hot as halved, let's say, or more.
00:28:30.153 --> 00:28:32.314
And and that trickles down through the whole market.
00:28:32.493 --> 00:28:36.948
It doesn't mean that you can't get good valuations for seed stage businesses at all actually, cuz
00:28:37.009 --> 00:28:39.229
what just means you have to adjust your expectations of
00:28:39.238 --> 00:28:39.473
a fact.
00:28:39.473 --> 00:28:39.913
Absolutely.
00:28:39.913 --> 00:28:45.364
You have to adjust expectations, There are not as many people investing certainly in consumer.
00:28:45.364 --> 00:28:49.147
Venture than there were, there was lots of people who, you know, it's all we do.
00:28:49.248 --> 00:28:49.647
Mm-hmm.
00:28:49.653 --> 00:28:51.542
so we are, we, we are gonna be doing it.
00:28:51.692 --> 00:28:51.782
Mm-hmm.
00:28:51.853 --> 00:28:57.558
but there's lots of people who sort of drifted in maybe from, you know, B2B SaaS areas or other areas,
00:28:57.833 --> 00:29:00.803
They're re they're retrenching to their is that the word?
00:29:00.817 --> 00:29:00.968
Yeah.
00:29:00.968 --> 00:29:03.367
Retrenching to their, their, to their core.
00:29:03.367 --> 00:29:05.887
which is what you do in a in a, in typically in a downturn.
00:29:05.887 --> 00:29:10.508
So, so there's fewer people playing in this space, which means deals take longer to do.
00:29:10.508 --> 00:29:10.671
Supply
00:29:10.682 --> 00:29:11.992
a supply and demand curve going on
00:29:12.101 --> 00:29:15.397
There is, there is, but there's still enough money to drive good valuations on.
00:29:15.403 --> 00:29:16.417
See, don't wrong.
00:29:16.417 --> 00:29:19.978
You can still, it's not like it's terrible time for, for founders actually.
00:29:19.982 --> 00:29:22.928
I think for a certain type of founder, it's a much better time.
00:29:23.137 --> 00:29:24.134
much better time.
00:29:24.223 --> 00:29:24.868
Definitely.
00:29:25.019 --> 00:29:33.959
So, you know, there, there was a huge premium in a way for people who could sell a huge dream, not worry about the execution and, and, and a brilliant set of salespeople, you
00:29:34.038 --> 00:29:36.441
to be that almost too close to the line.
00:29:36.471 --> 00:29:36.740
Yeah.
00:29:36.800 --> 00:29:37.605
I know at all.
00:29:37.951 --> 00:29:41.040
Absolutely And not Oh, on the edge.
00:29:41.070 --> 00:29:42.750
Let, let's face sometimes over the line.
00:29:42.780 --> 00:29:43.193
You know, that's
00:29:43.246 --> 00:29:43.756
problem.
00:29:43.996 --> 00:29:44.986
We won't go down that line.
00:29:45.013 --> 00:29:45.480
Yeah, no.
00:29:45.486 --> 00:29:48.151
So, so, so, you know, and there was huge returns for people like that.
00:29:48.151 --> 00:29:50.163
And so, and most people aren't.
00:29:50.163 --> 00:29:54.614
most people actually kind of, you know, really want to understand where they can back up what they're saying.
00:29:54.614 --> 00:29:56.084
And, you know, how am I gonna do this?
00:29:56.084 --> 00:29:58.903
I'm not just, just gonna say, I can do it without really thinking about it.
00:29:58.909 --> 00:30:00.433
I'm gonna actually, how I'm gonna make this happen.
00:30:00.433 --> 00:30:04.614
And those people were probably getting slightly drowned out, in the last 10 years.
00:30:04.744 --> 00:30:23.963
And, for those who perhaps weren't naturally feeling that way, they felt, they also to come in and say, here's how I'm going to turn the entire, which by the way, is still by the traditional VCs, how they're, they're talking as they're creating industries and they're creating industry leaders and globally and all the rest.
00:30:24.023 --> 00:30:24.294
Okay.
00:30:24.294 --> 00:30:26.723
So, so there are, there are changes afoot.
00:30:26.723 --> 00:30:28.763
Valuations are more realistic from
00:30:29.412 --> 00:30:29.892
investor's point of view.
00:30:29.963 --> 00:30:30.023
Yeah.
00:30:30.023 --> 00:30:32.574
But from a founder point of view, you don't have to not be yourself.
00:30:32.907 --> 00:30:33.419
Definitely not.
00:30:33.419 --> 00:30:33.659
No.
00:30:33.878 --> 00:30:34.509
Absolutely.
00:30:34.618 --> 00:30:35.818
fact, what else has changed?
00:30:35.941 --> 00:30:39.211
Well, the, as I said, the time to do deals has changed.
00:30:39.211 --> 00:30:45.540
So, you know, there, there was a time when, you know, anything that sounded like a decent deal was gonna be done in a week or two.
00:30:45.641 --> 00:30:51.131
you know, it was just, and people were getting checks for five 10 for in no time at all.
00:30:51.131 --> 00:30:52.901
So no one was doing the diligence, let's face it.
00:30:52.901 --> 00:30:55.546
There was no way that anyone was doing the, the sort of venture
00:30:55.586 --> 00:30:58.165
capital and due diligence are not usually words anyway.
00:30:58.578 --> 00:31:00.979
as in, I've seen, you know, the private side of
00:31:01.233 --> 00:31:01.469
things
00:31:01.489 --> 00:31:03.618
As, as, as I'm sure you have, and it's
00:31:03.618 --> 00:31:04.368
oh, it's very different.
00:31:04.759 --> 00:31:05.298
Absolutely.
00:31:05.304 --> 00:31:05.898
But you know, the over
00:31:06.147 --> 00:31:06.561
overkill.
00:31:06.561 --> 00:31:08.632
Arguably, but the return models are completely different.
00:31:08.632 --> 00:31:11.551
You know, You can't lose, any money in in private.
00:31:11.551 --> 00:31:14.151
You've got to, you've gotta get a return on every money
00:31:14.176 --> 00:31:15.826
so you have to pick up every stone and look under it.
00:31:15.902 --> 00:31:16.442
Absolutely.
00:31:16.442 --> 00:31:16.832
Absolutely.
00:31:16.832 --> 00:31:18.392
Was eventually can't do that because,
00:31:18.446 --> 00:31:22.737
you do at an early stage from a due diligence point of view that you weren't doing in these two week deals?
00:31:23.037 --> 00:31:26.817
I think this is this is a very relevant and interesting insight for, for people raising money.
00:31:26.871 --> 00:31:27.221
Yeah.
00:31:27.221 --> 00:31:30.491
So, so I suppose it's sort of going back to the very beginning.
00:31:31.031 --> 00:31:38.561
So the sort of level of detail that we went into on an innocent plan 25 years ago, there's no reason that stuff can't be relevant now.
00:31:38.592 --> 00:31:44.442
Like, make sure you properly understand how you, if you've got a product, how you're gonna make it, how are you gonna market it, why it's better than everyone else's.
00:31:44.741 --> 00:31:53.700
Where you gonna sell it, what the price works are gonna be, All of that, stuff that, you know, it sort of gets waived through on three PowerPoint slides or has been for the last, last few years.
00:31:53.700 --> 00:31:53.730
or
00:31:53.730 --> 00:31:57.200
Or, or even, simply we'll figure that out later.
00:31:57.228 --> 00:31:57.451
Exactly.
00:31:57.457 --> 00:31:59.832
Because there's enough money to follow this through.
00:32:00.612 --> 00:32:00.614
There's three.
00:32:00.618 --> 00:32:00.652
Exactly.
00:32:00.731 --> 00:32:02.396
there's nothing necessarily wrong with that model.
00:32:02.396 --> 00:32:03.176
I do wanna say,
00:32:03.191 --> 00:32:03.490
Yeah.
00:32:03.748 --> 00:32:11.834
What do you, you know, your it, your own investment philosophy and, and strategy ain't gonna go back properly anytime soon to, and you weren't really there anyway.
00:32:11.834 --> 00:32:12.193
Were you?
00:32:12.298 --> 00:32:17.760
Well, I mean, I think our, our, you know, our definitely informs the way we invest.
00:32:17.760 --> 00:32:22.050
So, you know, the way innocent raised money, small amount of money, really frugal, you know,
00:32:22.070 --> 00:32:22.951
great business plan.
00:32:24.294 --> 00:32:28.351
know, aiming to get to breakeven as soon as you blooming cam because you only had 250 grand.
00:32:28.381 --> 00:32:29.010
Exactly.
00:32:29.095 --> 00:32:30.938
once you get breakeven, your masters of your own destiny
00:32:31.078 --> 00:32:32.699
we're talking a long time ago here.
00:32:33.028 --> 00:32:37.348
The concept of you follow your seed with your series A, with your series did not exist.
00:32:37.459 --> 00:32:39.798
and it wasn't even on your radar.
00:32:39.993 --> 00:32:48.693
No, because it was, you know what, once we're, once we're at profitability, we'll basically invest back pretty much everything we are making through that year to stay breakeven.
00:32:48.693 --> 00:32:55.384
But that's our investment rather than sort of is saying, actually we're gonna go below the line and keep raising external capital.
00:32:55.534 --> 00:32:57.394
Cuz it wasn't so easy to, to do so.
00:32:57.394 --> 00:32:58.564
It didn't really come across our
00:32:58.686 --> 00:33:04.297
So, so, the world, the world's going back a little bit to some good stuff as far as your, as you guys are concerned.
00:33:04.297 --> 00:33:05.106
Cause it's what you knew.
00:33:05.106 --> 00:33:12.307
And by the way, your five year financial forecast, certainly the top line beat of it is the only business plan in the history of the planet that was pretty much met.
00:33:12.717 --> 00:33:17.126
partly because it didn't feel like it had to show a hundred million pound revenue in five
00:33:17.487 --> 00:33:17.705
Yeah.
00:33:17.846 --> 00:33:17.906
Yeah.
00:33:17.957 --> 00:33:21.287
and simply because I guess the research that went into it was so
00:33:21.576 --> 00:33:21.856
robust.
00:33:21.856 --> 00:33:22.257
Yeah.
00:33:22.257 --> 00:33:25.156
But it felt ridiculously ambitious from a standing start to do what?
00:33:25.156 --> 00:33:26.537
7 million quid after three.
00:33:26.537 --> 00:33:31.307
I mean, 7 million quid was such a vast, unimaginable amount of money in so many smoothies to be able to sell.
00:33:31.307 --> 00:33:31.487
It.
00:33:31.487 --> 00:33:34.186
Just, it, you know, it felt horribly ambitious from the beginning.
00:33:34.186 --> 00:33:39.106
But actually once, you know, to your point, we, we broke it down and worked out how you literally store by store.
00:33:39.106 --> 00:33:40.946
You could get there and, and it worked.
00:33:40.946 --> 00:33:41.757
And it worked.
00:33:41.832 --> 00:33:42.551
How else?
00:33:42.602 --> 00:33:51.932
and we've talked a lot about how the innocent, this has been exactly what I wanted by the way, terms sort of, we are learn learning about jam jar, But sort of touching on the bits of the innocent story that really influenced it.
00:33:51.932 --> 00:33:52.531
Anything else?
00:33:52.531 --> 00:33:59.652
How did the near death experiences you sometimes describe it, how did that affect or how does that affect your attitude?
00:33:59.915 --> 00:34:02.615
Well, I think, I think, that there's a, there's a few things there.
00:34:02.615 --> 00:34:05.976
So, so the first is, understanding how quickly things can change.
00:34:06.695 --> 00:34:16.896
and death experience went from being a business that was absolutely sort of flying in 2007 to on its knees by mid 2008 and desperately needing money.
00:34:16.976 --> 00:34:25.436
and, and actually it was still really our realization of it was not until Q2 2008 that we were in real trouble, and by by Q three we were in real trauma.
00:34:25.436 --> 00:34:27.295
So it was, it it went so quickly.
00:34:27.405 --> 00:34:43.199
and so I think there's, the council we give our founders is that sort of healthy paranoia to be looking at those leading indicators that are always, you know, that hopefully will give you the alarm bells of whether good stuff or bad stuff is, is around the
00:34:43.266 --> 00:34:43.427
corner.
00:34:43.432 --> 00:34:47.987
Healthy paranoia, Healthy that goes along with naive intelligence.
00:34:47.987 --> 00:34:51.858
As a as a, new phrase of mine, how else does that sort of play out then?
00:34:51.858 --> 00:34:52.847
So, be alert.
00:34:52.847 --> 00:34:54.827
Be, be ready for the change.
00:34:54.827 --> 00:34:57.527
And by the way, margin structures have a huge part to play in that too.
00:34:58.398 --> 00:35:00.677
A huge part to play in the restaurant industry.
00:35:00.677 --> 00:35:05.538
It's even, even worse, I suspect, in terms of what a percentage drop in revenue
00:35:05.552 --> 00:35:05.882
Yes.
00:35:05.882 --> 00:35:07.588
With a co fixed cost base that you've got, I suppose.
00:35:07.588 --> 00:35:12.246
for instance, versus a, I don't know, a software business with 80% gross margins.
00:35:12.273 --> 00:35:12.782
Absolutely.
00:35:12.842 --> 00:35:13.202
Absolutely.
00:35:13.202 --> 00:35:14.432
So, so so there's that.
00:35:14.543 --> 00:35:22.063
and then I think there's the willingness to be flexible about your, your sholis, your, your, unbreakable, sort of tenants.
00:35:22.068 --> 00:35:23.202
So, you know, we were clear.
00:35:23.202 --> 00:35:27.132
We didn't want to raise money, you know, that was not gonna be, you know, we wanted to say completely independent.
00:35:27.213 --> 00:35:36.063
and that was completely the wrong thing, to stick to because of the plan that we would've, that we wrote that would've meant us staying independent was such a depressing plan.
00:35:36.063 --> 00:35:36.152
Mm-hmm.
00:35:36.543 --> 00:35:43.842
In terms of cutting and saving and, and, and taking us away from our stated, you know, vision of being Europe's favorite little juice company, which is what we were aiming to be.
00:35:44.172 --> 00:35:46.663
That, that it was completely the wrong thing.
00:35:46.663 --> 00:35:50.233
So actually unwinding that and totally changing our mindset and saying, you know what?
00:35:50.237 --> 00:35:51.342
We do need to go and raise money.
00:35:51.402 --> 00:35:56.777
And, and that might might seem such an obvious point, but at the time it was deeply ingrained in the way we were thinking.
00:35:56.947 --> 00:36:01.380
founders, are very clear on things that they believe.
00:36:01.409 --> 00:36:01.469
Yeah.
00:36:01.619 --> 00:36:12.460
And sometimes they've got to that belief so many years ago with or without analysis, and knowing when to drop some of them So challenge your, you know, be open to, to challenging, It's
00:36:12.817 --> 00:36:17.277
challenging those, those fundamental tenets of what you what you believe, and, stuff changes quickly.
00:36:17.277 --> 00:36:19.016
And so there be, be prepared to react.
00:36:19.021 --> 00:36:19.646
Don't noodle.
00:36:19.646 --> 00:36:30.541
This is where decision making actually, you know, We did have to move fast and I think we, you know, we moved fast enough cause the business survived, but it, we probably could have moved, We definitely could have moved faster.
00:36:30.916 --> 00:36:35.427
analysis paralysis, a classic issue for consultants who become operators.
00:36:35.431 --> 00:36:37.896
And two thirds of you were consultants.
00:36:37.927 --> 00:36:37.987
Yeah.
00:36:38.027 --> 00:36:38.226
Yeah.
00:36:38.447 --> 00:36:42.047
what, what do you think of consultants turned entrepreneurs that walked through your door today?
00:36:42.146 --> 00:36:42.777
do you love them?
00:36:42.777 --> 00:36:44.067
Do you not love them?
00:36:44.067 --> 00:36:45.686
Do you have any particular,
00:36:45.731 --> 00:36:46.782
No, not, not, partic.
00:36:46.811 --> 00:36:52.251
I, I think you, you've just got, you've gotta test the team in total against the same that we do all the teams.
00:36:52.251 --> 00:36:58.610
So, you know, if they're all ex consultants who don't have any experience in the industry, but are fundamentally smart.
00:36:59.331 --> 00:36:59.831
probably not enough.
00:36:59.831 --> 00:37:07.242
You want someone who, who's got that industry experience, that operating experience as well as the, the, the sort of intellectual spots that we, we talked about at the beginning.
00:37:07.512 --> 00:37:11.512
You sort of want that diverse set of, skills.
00:37:11.643 --> 00:37:13.534
in, in, the one recording I could find of you.
00:37:13.726 --> 00:37:23.177
you described, then, which I suspect that was pre-crash, that your job, you're just a glorified HR consultancy or a, or something along those lines in terms of you, you learnt,
00:37:23.192 --> 00:37:23.851
HR consultancy.
00:37:23.851 --> 00:37:23.942
You've
00:37:23.942 --> 00:37:29.012
but you've, you learnt that that's the number one and and to put a lot more effort into it.
00:37:29.012 --> 00:37:31.192
And, and you've done, you've been, you about it.
00:37:31.192 --> 00:37:34.492
You've been analytical and trying to work out what the characteristics are, et cetera, et cetera.
00:37:34.672 --> 00:37:41.373
But it seems like having gone from gone to sort of really focus all on that, now we're back in a world where you.
00:37:41.639 --> 00:37:48.001
going to dig into the economics and the business model and the, and, and the, and do the due diligence a little bit harder than,
00:37:48.001 --> 00:37:54.331
yeah, I mean actually the people and team bit has always been the number one, but it's not in enough in of itself.
00:37:54.391 --> 00:37:58.972
you absolutely need a product, you need to be solving a problem and with a product that's better and different.
00:37:59.032 --> 00:38:00.141
That's definitely number two.
00:38:00.141 --> 00:38:07.481
And then the financial opportunity has got to be there, which includes this, the business model, the, the numbers, the timing, all of
00:38:07.481 --> 00:38:11.052
And the, the right amount of money is being asked at the right time.
00:38:11.052 --> 00:38:11.112
Yeah.
00:38:11.331 --> 00:38:15.172
the world got a little bit ahead of itself over the last few years doing,
00:38:15.592 --> 00:38:21.827
When, when people are rushing to put, deploy money and put it to work, then all that sort of good structure goes out the window,
00:38:22.007 --> 00:38:24.128
okay, so I want one.
00:38:24.128 --> 00:38:25.148
I'm gonna go back to the end.
00:38:25.148 --> 00:38:28.956
Some days I want one thing you're most proud of and one thing you do differently.
00:38:29.699 --> 00:38:38.068
I think the thing most proud of is what the team that we grew, both the team that's still, that's there and the team that has then gone off to do other things.
00:38:38.159 --> 00:38:39.929
The the entrepreneurial things.
00:38:39.929 --> 00:38:40.228
The,
00:38:40.318 --> 00:38:40.949
the podcast
00:38:41.478 --> 00:38:42.298
podcast hosts.
00:38:42.298 --> 00:38:42.778
Exactly.
00:38:43.228 --> 00:38:44.338
All these wonderful things.
00:38:44.608 --> 00:38:53.748
I think that's, you know, when we do a meetup and, you know, every five years we might sort of go back and see people, it's just like people are doing so many fascinating things.
00:38:53.748 --> 00:39:02.449
And I think it was a real sort of hotbed of, can do, not necessarily just entrepreneurialism, but just sort of positivity and optimism and just go and make good stuff happen.
00:39:02.449 --> 00:39:04.818
And that's, that's probably the thing.
00:39:04.909 --> 00:39:09.018
It's actually not the drinks or any of the stuff that we made, it's the people that did it
00:39:09.079 --> 00:39:10.398
It is quite extraordinary.
00:39:10.668 --> 00:39:20.088
And, and it, to a certain extent, you see it in the really big successful tech world, that, you know, the businesses and the, the entrepreneurs that are spun out from that Yeah.
00:39:20.119 --> 00:39:23.268
From that world and, and the enormous clusters that get built around it.
00:39:23.268 --> 00:39:31.340
the impact of innocent has not just been the fact that the entrepreneurs that have come out, but the entire food and drink industry is so much more entrepreneurial.
00:39:31.340 --> 00:39:38.150
Here, i, I partly because of, of your success, there's no doubt in my mind that clustering effect definitely had a thing.
00:39:38.599 --> 00:39:42.349
But it is that they've gone on to do so many different and varied things in their own ways.
00:39:42.349 --> 00:39:42.409
Yeah.
00:39:42.481 --> 00:39:43.740
And so many of them have.
00:39:43.831 --> 00:39:45.360
How, why did that happen?
00:39:45.565 --> 00:39:56.150
I, I think we, we hired people who had the value set that we wanted, which included that sort of entrepreneur and optimism and just go and do, do stuff, make stuff happen.
00:39:56.451 --> 00:40:03.831
We wanted them to make stuff happen within the business, but then at some point in people's careers, it's right for do, do stuff outside of the business and that's what they went and did.
00:40:03.831 --> 00:40:12.931
So I think it was, I think it was, came from fundamentally hiring people with those values and then having a good model for how you make stuff happen.
00:40:12.992 --> 00:40:22.532
So the processes work, the business worked and people kind of learnt some great practice, which then they felt they could put into practice themselves and build on and improve, frankly.
00:40:22.920 --> 00:40:25.967
So, I mean, I don't know if I've ever said thank you.
00:40:26.373 --> 00:40:27.213
I dunno what you'd say.
00:40:27.213 --> 00:40:27.762
Thank you for
00:40:28.108 --> 00:40:29.157
letting me be part of that.
00:40:29.983 --> 00:40:32.952
And I think others would, would say exactly the same.
00:40:33.094 --> 00:40:38.045
but I'd also add to what you've said about why this group of people has come out.
00:40:38.485 --> 00:40:47.230
I think it's hard, it's easy to forget sometimes how out there and different innocent really was back in those days, I mean, sure.
00:40:47.230 --> 00:40:48.159
The marketeers get it.
00:40:48.385 --> 00:40:49.706
Oh, this brand's so different.
00:40:49.706 --> 00:40:51.476
It talks naturally and does different things.
00:40:51.865 --> 00:40:53.606
Great and brilliant by the way.
00:40:53.902 --> 00:41:01.384
But that translated into an organization, a business organization that was human and operated fundamentally differently, not to what we see today.
00:41:02.079 --> 00:41:04.000
I mean, you, you you were B Corp before B Corp.
00:41:04.179 --> 00:41:04.420
Yeah.
00:41:04.719 --> 00:41:09.920
You were human before, you know, business worked out that it could be a human endeavor.
00:41:10.221 --> 00:41:10.280
Yeah.
00:41:10.360 --> 00:41:14.675
and I still, for the life of me, don't understand how you, ended up there.
00:41:14.773 --> 00:41:25.568
cuz it wasn't a part of the business to have a different way of operating business that would somehow be this, it's a exemplar and give other people this, this belief that they could do things differently
00:41:25.869 --> 00:41:26.228
No
00:41:26.233 --> 00:41:27.369
businesses a force for good.
00:41:27.579 --> 00:41:28.748
Where did it all come from?
00:41:28.753 --> 00:41:29.168
For goodness
00:41:29.344 --> 00:41:34.744
It came incrementally over time thinking hard about how we do every single thing that we do.
00:41:34.775 --> 00:41:37.085
Not just saying, oh, this is the way it's done.
00:41:37.085 --> 00:41:38.885
Let's, let's just copy that.
00:41:38.922 --> 00:41:45.177
you know, it was just challenging, you know, let's do it in the best possible way, in the way it feels most natural for us.
00:41:45.237 --> 00:41:46.228
Because it
00:41:46.483 --> 00:41:49.003
the, you know, we are making natural drinks, therefore we need
00:41:49.052 --> 00:41:50.157
to be No, no, it wasn't.
00:41:50.307 --> 00:41:50.657
that's
00:41:50.853 --> 00:41:52.797
a, post sort of, you know why?
00:41:52.907 --> 00:42:03.137
Because I think, I think we just had the opportunity to build it from the ground up and it's like, well, why don't you build it exactly as you want it and think it should be done rather than, because this is the way it's always been done.
00:42:03.286 --> 00:42:05.983
We probably over-engineered far too many things actually.
00:42:05.983 --> 00:42:06.074
Sure.
00:42:06.123 --> 00:42:15.365
and, and the point probably noodled far too long on certain decisions, but actually it ended up with a sort of, just make sure you put the effort in to do it.
00:42:15.365 --> 00:42:15.695
Right.
00:42:16.103 --> 00:42:20.103
you you were not just friends, you were the best of friends.
00:42:20.454 --> 00:42:30.393
I'm I'm trying to sort of draw a line from some of you know, how I'm trying to imagine in those early days, you know, well before I got involved, you're sitting around a table trying to figure this thing out.
00:42:30.914 --> 00:42:35.773
and what is it about your relationships and your personal values that sort of end up here?
00:42:35.818 --> 00:42:40.829
I think we've probably all wanted to, you know, in each area people wanted to go look, actually I'm, I've done it like this.
00:42:40.829 --> 00:42:44.398
So there was a bit of like, actually I wanna do my bit well and better that
00:42:44.594 --> 00:42:46.813
it's not the best of friends, it's competitive friends.
00:42:46.813 --> 00:42:46.934
It's
00:42:46.978 --> 00:42:51.418
competitive friends, but it is, there's, yeah, there's definitely a healthy competition there.
00:42:51.418 --> 00:42:55.619
Or, or probably also the thing, not, not, wanting to do it wrong, be slightly shit at it.
00:42:55.619 --> 00:42:58.139
You know, we have the don't be, don't be shit.
00:42:58.231 --> 00:42:58.844
don't be shit.
00:42:58.849 --> 00:43:06.503
And actually, perhaps the insecurity that comes from being, outside the industry, having never done it before, there's also a bit of that that says That's
00:43:06.679 --> 00:43:07.789
comes in, is how do we do it?
00:43:07.789 --> 00:43:09.858
well, rather than just saying, oh, I know the shortcut.
00:43:10.099 --> 00:43:12.318
You, you sort of think it through from first principles.
00:43:12.318 --> 00:43:14.208
No, that's not always a great use of time.
00:43:14.208 --> 00:43:14.478
But
00:43:14.764 --> 00:43:20.543
first principle thinking is actually a characteristic, a personality characteristic, that you all three share,
00:43:20.628 --> 00:43:21.079
Is that right?
00:43:21.369 --> 00:43:21.719
Oh, I dunno.
00:43:21.719 --> 00:43:23.768
I don't, I'm done a psychological analysis.
00:43:23.934 --> 00:43:24.054
no.
00:43:24.054 --> 00:43:24.739
I was wondering whether you had,
00:43:24.824 --> 00:43:29.635
but, but, the idea that, you can figure this out and, and, and, and come to figure it out.
00:43:30.039 --> 00:43:31.704
that was very prevalent.
00:43:31.704 --> 00:43:33.385
And probably also in the people that you hired.
00:43:33.414 --> 00:43:33.655
Yes.
00:43:33.835 --> 00:43:34.155
Yes.
00:43:34.159 --> 00:43:40.795
For, on the whole, I mean, that whole, you remember that whole, sort of, you know, you adopted the measurement, consulting interview style at some point.
00:43:41.244 --> 00:43:41.304
Yeah.
00:43:41.385 --> 00:43:44.655
for, for sort of finding the people who can break down problems and solve them.
00:43:44.985 --> 00:43:45.045
Yeah.
00:43:45.105 --> 00:44:00.864
I just, I don't, it's a really interesting story because I look at businesses today, at various stages and talk about culture And I, I've come to a, a real sad conclusion that actually this is, you don't, you can't engineer it as you've probably improve it a little bit.
00:44:00.864 --> 00:44:17.065
But at the very end of the day, the culture is gonna be established by the minu Shai, as you say, daily, day-to-day decisions you take, and therefore the culture is gonna be established from very day one, just by your personality and your co-founders personalities and the, the, split of responsibility and house within them.
00:44:17.233 --> 00:44:18.344
definitely, definitely.
00:44:18.344 --> 00:44:22.963
The, The, The, the culture fundamentally will reflect the, the, the founder's belief system and values.
00:44:22.969 --> 00:44:23.364
Absolutely.
00:44:23.653 --> 00:44:24.103
Okay.
00:44:24.193 --> 00:44:30.623
so just before we get into your three things, we have a world, adventure world in crisis.
00:44:30.623 --> 00:44:31.762
We have, investors.
00:44:32.050 --> 00:44:36.489
Not doing new investments, protecting their cash to support their investees.
00:44:36.760 --> 00:44:50.079
We have, companies who were on one belief system in terms of growth and losses and being able to fund your way to the future who have, will had to tighten the belts sometimes, pivot their strategies.
00:44:50.246 --> 00:44:53.516
first of all, how's your portfolio been with regard to that?
00:44:53.516 --> 00:44:55.077
What's your advice been, to them?
00:44:55.077 --> 00:45:02.034
And then, you know, maybe we can get to the, you know, today for those businesses, who are going to run outta cash before the market's open up again.
00:45:02.184 --> 00:45:04.224
what are they gotta do to, to raise their money?
00:45:04.250 --> 00:45:06.440
so, so in terms of our portfolio, it's doing pretty well.
00:45:06.530 --> 00:45:12.199
we're fortunate in most of the businesses got well funded whilst funding was, was available.
00:45:12.260 --> 00:45:12.349
Mm-hmm.
00:45:12.594 --> 00:45:20.505
and then sort of adapted the spend and burn rate so that, they could make that last a long long time or make it last indefinitely.
00:45:20.505 --> 00:45:22.605
I do by getting to, to profitability.
00:45:22.605 --> 00:45:23.054
So,
00:45:23.090 --> 00:45:29.244
and, and you've been firm with your advice to portfolio companies that sort of, let's get on the path to profitability people.
00:45:29.315 --> 00:45:30.695
Yeah, very very much so.
00:45:30.699 --> 00:45:36.184
And we, we, we did a big event for the portfolio just before Christmas actually, sort of talking about managing through a recession.
00:45:36.184 --> 00:45:39.394
Some of the stuff that we learned through through our near death experience as it turns.
00:45:39.699 --> 00:45:45.789
You know, quarter one this year has been actually much better trading wise for most businesses than we, we feared it would be.
00:45:45.789 --> 00:45:50.911
So it was, it was, I think a lot of them were left our Christmas event, slightly depressed,
00:45:51.204 --> 00:45:53.396
come to the Ger Jar Christmas party.
00:45:53.489 --> 00:45:59.668
and, but, you know, hopefully it sparked a bit of healthy paranoia, which actually, you know, has, has meant that,
00:45:59.768 --> 00:46:07.329
I think we'd all like to be overdelivering up against our plans in quarter one than, than Underdelivering So, in this world, yeah.
00:46:07.568 --> 00:46:16.628
But you're right, the economy so far has held up a little bit stronger, but that doesn't change the fact that there aren't, there isn't gonna be a awful lot of follow on funding rounds.
00:46:16.793 --> 00:46:17.483
Definitely not.
00:46:17.483 --> 00:46:24.983
So getting to that, getting to that position of, of profitability or clear, clear route to profitability is, is, is vital.
00:46:25.094 --> 00:46:36.284
and, and I suppose because new investors come into rounds are harder to get, getting, getting great relationships with your existing investors is, is vital.
00:46:36.393 --> 00:46:44.443
and probably being a bit more open, honest about how things are going, where things are good, where things are is really important.
00:46:44.443 --> 00:46:45.074
People don't wanna get
00:46:45.208 --> 00:46:48.918
transparency, was always such a big part of the innocent culture.
00:46:48.923 --> 00:46:49.188
Definitely.
00:46:49.219 --> 00:46:54.989
that you had, you can't impose culture onto your portfolio companies.
00:46:55.168 --> 00:47:07.536
How do you handle this sort of, I don't want a lack of transparency because it's almost an a need sometimes for, for entrepreneurs to, to, to not over, you know, to have confidence in what they're doing and not over worry their investors.
00:47:07.536 --> 00:47:08.135
Yeah.
00:47:08.320 --> 00:47:12.996
sort of being too open the doors to people who aren't that close to it is a dangerous thing to do.
00:47:13.085 --> 00:47:13.536
Definitely.
00:47:13.536 --> 00:47:28.686
I mean, it is one of the things we, we, we, we sort of try and test for early on in terms of whether we're gonna do an investment, whether we really, you know, can have subs, you know, deep, substantive conversations with people and they're gonna be honest about the stuff that they know or that's going well versus the stuff they don't know Or isn't going well.
00:47:28.686 --> 00:47:28.896
if you
00:47:29.076 --> 00:47:32.315
the, the, the door, the doors closed during that conversation, it's
00:47:32.315 --> 00:47:33.170
that's that's a big red flag.
00:47:33.230 --> 00:47:34.309
That's a big red flag.
00:47:34.380 --> 00:47:47.076
and once again, it's one of those things that probably you could, if you are a great, good enough salesperson, you could avoid, you know, tripping up on that now, I think it's, it's slightly tougher because more time is being spent in that, on, on those deals and therefore it's gonna get uncovered.
00:47:47.114 --> 00:47:47.534
Yeah.
00:47:47.864 --> 00:47:48.195
Yeah.
00:47:48.554 --> 00:47:50.864
And of course, for this goes back to the nature of the entrepreneur.
00:47:50.864 --> 00:47:52.844
Being honest with yourself is where you have to start.
00:47:53.144 --> 00:48:00.525
And in the past you had to believe, you, you, you, those entrepreneurs that were, were changing the world, quote unquote, were drinking their own Kool-Aid.
00:48:00.525 --> 00:48:04.844
Because they had to, because they had to constantly sell this vision to everybody they can.
00:48:05.474 --> 00:48:08.585
And, you, after a while, you just, you just believe it.
00:48:08.585 --> 00:48:09.005
Absolutely.
00:48:09.215 --> 00:48:11.414
so the portfolios, not overly worrying you.
00:48:11.610 --> 00:48:11.940
No.
00:48:11.940 --> 00:48:20.050
I mean, it's, it's, you know, but, but things that are, I suppose things that have been affected are sort of the bigger capital items, you know, cars, mortgages, those those sorts of bigger commitments.
00:48:20.050 --> 00:48:29.019
So businesses that are more exposed to those definitely are fi finding that harder because people are being more thoughtful, cautious, about making those types of investments, themselves.
00:48:29.019 --> 00:48:29.139
So.
00:48:29.545 --> 00:48:33.025
And let, let's go to your three things cuz we, we we're, we're pretty much on time.
00:48:33.159 --> 00:48:36.811
Three things for, for raising, for raising finance in this market.
00:48:36.827 --> 00:48:38.476
One of them is The fir.
00:48:38.481 --> 00:48:47.865
The first one is, probably relevant at all times, but I just don't want to have it lost because it's, it's, the current environment.
00:48:48.755 --> 00:48:58.907
Be absolutely clear on the problem, the consumer problem you're solving, and be clear sighted about why your solution is better and different or easier for people.
00:48:59.007 --> 00:49:00.358
we see too many businesses.
00:49:00.751 --> 00:49:06.242
I've got a good idea, but are a bit muddled about what it really, what it really does for people and why people are going to use it.
00:49:06.242 --> 00:49:12.422
And you can have loads of slides and loads of justification, but actually fundamentally, if it doesn't, it's not better, different, or easier or cheaper.
00:49:12.722 --> 00:49:14.702
It's just not going to work for people.
00:49:14.702 --> 00:49:15.692
And so it's a better master.
00:49:16.021 --> 00:49:19.532
It's a be, but is it, is it better on the dimensions that anyone cares about?
00:49:19.784 --> 00:49:26.016
so, so just be and be rigorous on that because rigorous, this is how I get actionable.
00:49:26.070 --> 00:49:28.701
test it against, loads of different people.
00:49:29.001 --> 00:49:35.820
ask them, is this, is this something you, you would actually use rather than you can imagine research, required my, my market research.
00:49:35.820 --> 00:49:38.221
Maybe It's not necessarily just about market research.
00:49:38.221 --> 00:49:42.983
It's, it's, I suppose it's, deeply understanding that the consumer.
00:49:43.181 --> 00:49:45.521
Needs that is being answered by your product.
00:49:45.581 --> 00:49:48.940
There's lots of businesses that come up with people go, oh, that's a good idea.
00:49:48.971 --> 00:49:49.451
Would you use it?
00:49:49.451 --> 00:49:50.451
No, I could,
00:49:50.956 --> 00:49:53.106
I could, but I could, imagine it.
00:49:53.110 --> 00:49:59.025
This is, This is the debate around product market fit and, and again, it's meant to have been figured out long before.
00:49:59.376 --> 00:50:02.675
but, but often, often it hasn't been sufficiently proven.
00:50:02.675 --> 00:50:04.356
And you're right, it doesn't have to be market research.
00:50:04.476 --> 00:50:08.916
It doesn't, the numbers, showed, I mean, cohort analysis for DTC is all about proving it,
00:50:09.110 --> 00:50:10.190
Absolutely, absolutely.
00:50:10.490 --> 00:50:14.210
You know, demonstrate through the numbers, not rather than research if you can, but it depends.
00:50:14.210 --> 00:50:19.311
At the early stage, you might not have too much, but provide me the evidence, and don't, and don't.
00:50:20.135 --> 00:50:20.766
Wave your hand.
00:50:20.766 --> 00:50:22.835
It's like, oh, these comp, they're just not as good at these competitors.
00:50:22.835 --> 00:50:23.376
These are the ones.
00:50:23.376 --> 00:50:24.905
It's like, okay, why?
00:50:24.905 --> 00:50:27.126
What is it that you do better and different?
00:50:27.126 --> 00:50:28.235
That's easier to use?
00:50:28.235 --> 00:50:33.565
That's, that's, and people just skip that step because they, they're excited about their idea.
00:50:33.815 --> 00:50:34.326
okay.
00:50:35.045 --> 00:50:37.295
So, you know, don't forget this bit.
00:50:37.416 --> 00:50:39.516
Investors today are gonna want to really Yeah.
00:50:39.576 --> 00:50:40.326
See the evidence.
00:50:40.371 --> 00:50:40.650
Yeah.
00:50:41.432 --> 00:50:42.483
Second thing I would.
00:50:42.992 --> 00:50:48.722
Prove that you've done a lot with a little, that you are fundamentally frugal entrepreneurs.
00:50:48.932 --> 00:50:53.402
There was this whole thing about boots strapping businesses, you know, 10, 20 years ago and that that sort, of,
00:50:53.463 --> 00:50:56.043
I mean, you, you guys are swimming in 250,000
00:50:56.213 --> 00:50:57.742
pounds, not only boots strapping at all.
00:50:58.382 --> 00:50:58.943
exactly.
00:50:58.943 --> 00:50:59.422
exactly.
00:50:59.552 --> 00:51:01.532
So We, we had loads.
00:51:01.822 --> 00:51:07.373
but as we touched on earlier, the, the the returns have been there for people who aren't necessarily frugal.
00:51:07.373 --> 00:51:08.693
Cause there've been money out there.
00:51:08.753 --> 00:51:10.432
and money, money can solve a lot of problems.
00:51:10.432 --> 00:51:13.545
If that isn't the case, then, then you need to be frugal.
00:51:13.550 --> 00:51:18.585
And even if it is the case, you retain more of your business if you are frugal rather than diluting.
00:51:18.585 --> 00:51:23.536
So it's, it's good discipline anyway, so think through how you can get stuff for cheap, for free.
00:51:23.835 --> 00:51:24.806
Find the shortcuts.
00:51:24.811 --> 00:51:31.215
It's that, that frugality in early stages of business is, is, is fundamentally what will give you an investor's returns.
00:51:31.221 --> 00:51:31.485
So,
00:51:31.496 --> 00:51:33.166
it is, it is that frugality.
00:51:33.293 --> 00:51:38.184
Even for some of the further along businesses today, that is their survival strategy.
00:51:38.574 --> 00:51:43.313
And so if you are not naturally a frugal person or you go through phases in your life, now's the time.
00:51:43.373 --> 00:51:43.650
Yeah.
00:51:44.184 --> 00:51:48.804
Although it'd be really great if you are a naturally frugal person right now.
00:51:48.809 --> 00:51:49.974
Yeah, Definitely.
00:51:49.974 --> 00:51:50.664
It's your world.
00:51:50.664 --> 00:51:50.844
It's your
00:51:51.003 --> 00:51:51.204
your world.
00:51:51.204 --> 00:51:51.764
It's your world.
00:51:51.768 --> 00:51:52.284
Definitely.
00:51:52.434 --> 00:51:59.534
And because it does, it affects your day to day, it affect, you know, the just simply saying, but why would I spend money on that?
00:51:59.715 --> 00:51:59.954
Yeah.
00:52:00.125 --> 00:52:01.295
Money's difficult to earn.
00:52:01.295 --> 00:52:02.795
It's hard to make money.
00:52:02.855 --> 00:52:03.155
Right.
00:52:03.159 --> 00:52:04.085
So, so
00:52:04.306 --> 00:52:06.034
It's been free for so long.
00:52:06.545 --> 00:52:09.335
It's been, it's been so, you know, the rates have been so low.
00:52:09.335 --> 00:52:11.434
it's been very difficult to get a return on anything.
00:52:11.440 --> 00:52:14.945
So you might as well place big bets now you can leave it the bank and earn 5%.
00:52:14.945 --> 00:52:17.405
People are, people are much more, please.
00:52:18.079 --> 00:52:18.929
Absolutely
00:52:19.414 --> 00:52:21.755
You can, you can leave it in several banks.
00:52:21.965 --> 00:52:23.164
Spread very thinly.
00:52:23.170 --> 00:52:24.545
Because you've learned about treasury
00:52:24.842 --> 00:52:25.210
management.
00:52:25.789 --> 00:52:26.269
Exactly.
00:52:26.744 --> 00:52:26.894
okay.
00:52:26.900 --> 00:52:30.711
So prove, prove your beef frugal and prove prove it.
00:52:30.731 --> 00:52:31.394
yeah, yeah, Yeah.
00:52:31.400 --> 00:52:37.994
Demonstrate it, you know, demonstrate that you've frugal, uh, you know, from this, the fa friends and family round that you've done show you've done a
00:52:38.061 --> 00:52:39.344
So I've, look, I've invent.
00:52:39.945 --> 00:52:40.784
New glass.
00:52:40.844 --> 00:52:40.965
Mm-hmm.
00:52:41.204 --> 00:52:43.994
I can prove to you that it's actually what people need.
00:52:44.085 --> 00:52:44.505
Yeah.
00:52:44.594 --> 00:52:47.175
And, uh, I'm not spending any money.
00:52:48.764 --> 00:52:50.744
This doesn't sound very exciting though.
00:52:51.329 --> 00:52:54.315
So I mean, you give me your money now.
00:52:54.315 --> 00:52:55.755
what's what's your third thing here?
00:52:56.195 --> 00:52:56.400
God.
00:52:56.400 --> 00:52:57.960
So I need something that's really exciting.
00:52:58.139 --> 00:53:02.699
I'm going to assume there's a, there's a really exciting opportunity still in this business somewhere.
00:53:03.239 --> 00:53:04.344
I mean, should we take that as red?
00:53:04.454 --> 00:53:06.494
take that as red but actually this is exciting.
00:53:06.494 --> 00:53:07.034
The market's big.
00:53:07.034 --> 00:53:07.755
All that great stuff.
00:53:07.755 --> 00:53:08.565
All that is great stuff.
00:53:08.894 --> 00:53:13.364
These are these are the more practical things, um, exactly.
00:53:13.364 --> 00:53:13.905
exactly.
00:53:13.905 --> 00:53:15.224
And I'd like to give you what you asked for.
00:53:15.324 --> 00:53:15.804
Thank you.
00:53:15.974 --> 00:53:18.570
I think the, third on this one is
00:53:18.594 --> 00:53:20.304
clearly making it up as you got along.
00:53:20.530 --> 00:53:21.639
No, I've actually written some words down.
00:53:21.809 --> 00:53:21.956
Oh.
00:53:22.483 --> 00:53:24.432
it touched back on something we spoke about earlier.
00:53:24.864 --> 00:53:29.945
Be honest about what you know and what you don't know, how you're gonna work stuff out.
00:53:30.005 --> 00:53:34.375
And if you don't know it, the, the bullshitting will fine.
00:53:34.375 --> 00:53:35.125
Doesn't matter.
00:53:35.184 --> 00:53:36.364
We'll get through it, da da da.
00:53:36.414 --> 00:53:39.954
Actually, I don't think cuts much ice at the moment.
00:53:39.954 --> 00:53:47.695
So that, that honesty, that transparency, that confidence to say what you don't know, that confidence to say, actually we, but we're working out like this.
00:53:48.025 --> 00:53:50.905
That for us is big brownie points.
00:53:50.905 --> 00:53:53.414
And I think probably for, lots of investors,
00:53:53.840 --> 00:53:55.530
it's a tricky one.
00:53:55.530 --> 00:54:06.202
This as in a hundred percent have, you know, when I left Tom Dicks my last full-time job and I started doing my plural world and it got me back into venture capital businesses again.
00:54:06.202 --> 00:54:12.596
And I mean, the first one I was in, I've just, I looked at some of the, communication to investors in horror
00:54:12.719 --> 00:54:13.331
because what?
00:54:13.331 --> 00:54:14.681
It was just misleading.
00:54:14.907 --> 00:54:19.652
I mean, You can't even describe it as believing their own Kool-Aid.
00:54:19.771 --> 00:54:23.496
It's what you need to do to get the, investor over the line kind of attitude.
00:54:23.496 --> 00:54:23.617
Yeah.
00:54:24.137 --> 00:54:26.507
which of course is totally unacceptable.
00:54:26.717 --> 00:54:32.583
And, and, and I'm painting, I'm painting a very dark picture of it, but at the same time, we don't know a lot of stuff.
00:54:32.673 --> 00:54:32.943
Right.
00:54:33.115 --> 00:54:41.695
And it's great to say, I don't know, but if I, if, if the answer to, you know, what's the revenue going to be this year is, I don't know.
00:54:41.695 --> 00:54:43.135
You're not gonna be happy with that either?
00:54:43.838 --> 00:54:44.496
no, I don't know.
00:54:44.496 --> 00:54:47.096
I mean, who knows Adam, but there is, who knows?
00:54:47.096 --> 00:54:48.626
It could be this, it could be this.
00:54:48.626 --> 00:54:50.215
Let's just go and have some fun.
00:54:50.246 --> 00:54:50.695
Well, no.
00:54:50.695 --> 00:54:56.215
And you know, if you're building a, you know, a software program, there's gonna be no, there's no revenue for the first year.
00:54:56.215 --> 00:54:57.985
So the answer's gonna be, I it's zero.
00:54:57.985 --> 00:54:58.195
Right.
00:54:58.195 --> 00:54:58.615
It doesn't matter.
00:54:58.615 --> 00:54:58.907
So,
00:54:58.911 --> 00:54:59.110
okay.
00:54:59.110 --> 00:55:04.070
But, but in, in, in, this world of, of setting ambitions and setting, setting goals, right?
00:55:04.101 --> 00:55:07.768
We, we have to have something that is exciting enough otherwise when none of us are around the table.
00:55:07.791 --> 00:55:13.431
But my point actually applies the other way round, which is the best entrepreneurs also say, I don't know that.
00:55:13.490 --> 00:55:16.161
And actually I don't care about that and that's why I don't care about it.
00:55:16.641 --> 00:55:19.460
and being to find out or I haven't gonna find out because it's not important.
00:55:19.465 --> 00:55:19.731
it's not
00:55:19.885 --> 00:55:20.181
important.
00:55:20.181 --> 00:55:20.780
today, but it will
00:55:20.891 --> 00:55:22.880
not important today or it'll be important then.
00:55:23.150 --> 00:55:24.409
And that, that it's not
00:55:24.411 --> 00:55:26.550
just throwing your hands up in the air going, I
00:55:26.690 --> 00:55:27.110
I dunno.
00:55:27.110 --> 00:55:27.771
Exactly.
00:55:27.771 --> 00:55:35.690
it's, it's, and, and that's where you get, you, you separate people who, who, who sort of probably really have it from those who, you know, might not.
00:55:35.690 --> 00:55:44.391
And that's, that I think is, is key in these times, especially because deals are taking longer to do and therefore you're more likely to get, tested on these things,
00:55:44.436 --> 00:55:55.896
get tested on these things, and it, it's, you know, the world of private equity that, that I know so well where deals are really long, you know, one of the most important rules is whatever you say is gonna happen during that time has to happen.
00:55:55.896 --> 00:55:57.576
Otherwise it's gonna risk the entire thing.
00:55:57.846 --> 00:56:02.856
When you deal window of closing, it's a couple of weeks versus several months.
00:56:02.916 --> 00:56:03.365
Absolutely.
00:56:03.615 --> 00:56:06.916
what's your advice on how long before you run outta cash?
00:56:07.155 --> 00:56:10.606
You should be out in the market starting the prop.
00:56:10.666 --> 00:56:16.396
I mean, you know, of course everyone should be fundraising all the time, but you know, a formal, let's take the story out now.
00:56:17.085 --> 00:56:21.166
How much cash can I have in the bank before I need to worry about it?
00:56:21.710 --> 00:56:23.130
You, so you want nine months?
00:56:23.130 --> 00:56:23.911
Really?
00:56:25.860 --> 00:56:26.880
Probably 12, but yeah.
00:56:27.481 --> 00:56:27.900
Nine.
00:56:29.101 --> 00:56:29.400
Yeah.
00:56:29.476 --> 00:56:29.806
Yeah.
00:56:29.811 --> 00:56:29.835
no.
00:56:29.835 --> 00:56:30.275
no, You want
00:56:30.371 --> 00:56:30.650
nine?
00:56:31.795 --> 00:56:32.846
we're gonna call it there.
00:56:32.905 --> 00:56:34.275
that's very practical.
00:56:34.990 --> 00:56:36.221
And actionable advice.
00:56:36.271 --> 00:56:37.110
thank you very much Mr.
00:56:37.115 --> 00:56:37.380
Mell.
00:56:37.860 --> 00:56:42.331
it was a Nice Look, it, it, it's always nice to chat.
00:56:42.570 --> 00:56:46.164
It's normally done over lunch rather than with microphone in front of you.
00:56:46.213 --> 00:56:52.650
There were a couple of things we didn't talk about, I'd love to talk about, but it's it's maybe, maybe maybe I'll come back for more.
00:56:52.768 --> 00:56:56.068
If, If, if anyone listens to this, then we, we can maybe do a follow up.
00:56:56.123 --> 00:56:57.440
the main job of these podcast cup.
00:56:57.903 --> 00:57:05.994
And, and again, coming back to why you are here and why I'm here, is for our members who are part of altogether, and what we're trying to do to help them.
00:57:05.994 --> 00:57:13.262
If other people are listening in and, finding value in them, first of all, come join altogether and get, get more of this, and then some.
00:57:13.389 --> 00:57:20.891
but regardless, we hope it's a value and it wouldn't be possible without people like you Breaking all the rules and doing podcast interviews and,
00:57:21.376 --> 00:57:21.697
you know,
00:57:21.851 --> 00:57:27.047
next time I'll have you on camera and you know, you know, we'll, we'll, we'll, put, we'll put Richard out the job.
00:57:27.262 --> 00:57:27.932
That'll
00:57:27.947 --> 00:57:28.277
a while.