Elite Business Magazine July 2017

CARRYING the day Having grown eve sleep from its beginnings as a scrappy startup to its recent ÂŁ35m IPO, Jas Bagniewski has succeeded in his mission to bring a great morning to reinvigorated customers Cover - Jas Bagniewsk.indd 1

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THE ELITE Interview

rise and shine

Jas Bagniewski’s iconoclastic mattress startup eve Sleep has smashed its IPO – and now the industry is waking up to his way of working

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Contents.indd 1

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CONTENTS 07.17 issue 43 JULY 17

REGULARS 11 12 17 82

From the editor Upfront The big idea The crunch

columns 19 Jacqueline Gold 31 Anil Stocker 33 Alice Bentinck

22

REMAINING together Brexit will be tough for

London’s tech hub but ties to the EU will remain

34

spreading its wings Digital soothsayer Black

Swan predicts everything from flu outbreaks to BBQs

58 41

In blockchain we trust

Distributed-ledger technology is restoring confidence in finance

52

Casting a spell Podcasts have listeners mesmerised – and savvy startups are cashing in

52

65

Crafting a culture Building the right culture begins with nailing recruitment

70

All that makes us human

A digital approach to death could transform the way we mourn

58

74

how food finds its way from plot to plate

cause drone startups to come crashing down

aTech taste for tech is transforming

Not above the law Ignoring regulation will JULY 2017 ELITEBUSINESSMAGAZINE.CO.UK

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FROM THE EDITOR EDITORIAL Josh Russell – Editor josh.russell@cemedia.co.uk Maria Barr – Web Editor maria.barr@cemedia.co.uk Eric Johansson – Feature Writer eric.johansson@cemedia.co.uk DESIGN/PRODUCTION Leona Connor – Head Designer leona.connor@cemedia.co.uk Jenny Allen – Designer jenny.allen@cemedia.co.uk Dan Lecount – Web Development Manager dan@cemedia.co.uk SALES Gemma Campion – Sales Manager gemma.campion@cemedia.co.uk Jemma Tonge – Senior Account Manager jemma.tonge@cemedia.co.uk MARKETING Taylor Blayney – Media Assistant taylor.blayney@cemedia.co.uk CIRCULATION Paul Kirby – Circulation & Data Manager paul.kirby@cemedia.co.uk ACCOUNTS Sally Stoker – Finance Manager sally.stoker@cemedia.co.uk Colin Munday – Management Accountant colin.munday@cemedia.co.uk ADMINISTRATION Laura Hyde – Administrator laura.hyde@cemedia.co.uk DIRECTOR Scott English – Managing Director scott.english@cemedia.co.uk Circulation/subscription

UK £18, Europe £38, Rest of World £60 Elite Business Magazine is published four times a year by CE Media Conference & Exhibitions Limited, 1st Floor, Regency House, 16 Victoria Road, Chelmsford, CM1 1NZ Copyright 2017. All rights reserved No part of Elite Business may be reproduced, stored in a retrieval system or transmitted in any form or by any means, without the prior written consent of the editor.

Elite Business magazine will make every effort to return picture material, but this is at the owner’s risk.

Due to the nature of the printing process, images can be subject to a variation of up to 15%, therefore CE Media cannot be held responsible for such variation. www.cemedia.co.uk

A brighter tomorrow

W

ith the sun beating down on us the last few weeks, it’s been hard not to feel positive about what’s up ahead of us.

And I’m sure I’m not the only one that feels this way: by their very nature, entrepreneurs are optimists and I feel incredibly privileged to work with such a bullish and buoyant community.

Just glancing through these pages, you can see what a hopeful future we have ahead of us. Whether it’s looking at how blockchain is set to restore confidence in our financial system, the way foodtech is revolutionising how meals make their way onto our plates or how technology is dramatically altering our relationship with death,

entrepreneurs never shy away from envisioning a golden future ahead.

Case in point is Jas Bagniewski, the co-founder and CEO of eve sleep.

Recognising how the mattress sector was dominated by bland brands, Bagniewski dedicated himself to providing consumers with an invigorating night’s rest and helped usher in a new dawn of sleep products.

Now consumers in 16 countries are waking up to a brighter tomorrow, which is enough to put a smile on anyone’s face.

Josh Russell - Editor josh.russell@cemedia.co.uk

contributors

Jacqueline Gold Having become a CEO in a male-dominated sector, Ann Summer’s Gold was the perfect pick to pen a piece on gender pay gap reporting and making all genders feel welcome at work.

ANIL STOCKER Stocker has spent the last seven years growing MarketInvoice into one of the UK’s most impressive fintech startups. This issue, he uses this experience to give you advice on fundraising. Lucky you.

Alice Bentinck Having brought myriad entrepreneurs together to bring innovative solutions to market at EF, no one knows better than Bentinck the importance of tackling the tough problems.

Emilie Sandy Our ace snapper, Sandy is responsible for shooting our cover stars and bringing a touch of glamour to the mag. This issue she had the pleasure of papping Bagniewski while he was in bed.

JULY 2017 ELITEBUSINESSMAGAZINE.CO.UK

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The investment rounds that rocked the startup community last quarter

S t a r t u p se x i s m One in five female founders ignored by investors

Series

B

Imp rob a bl e

$502m This latest round will allow London’s newest unicorn to keep creating massive virtual worlds for everyone from game developers to city planners.

Series

E

Fa r f e t ch

$397m With this cash injection from the Chinese e-commerce giant JD.com, the online fashion platform aims to increase its market share in the Asian nation.

Series

B

Why SMEs say no

Bl ockch a in

$40m Since launching in 2011, this startup has become the world’s most popular bitcoin wallet. And that’s sure to continue with the support of investors like Sir Richard Branson.

Series

A

S ta r L e a f

$40m It’s not often that businesses get their first external capital almost a decade after their launch. But that’s exactly what this UK teleconference company has done.

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The history of startups is full of female entrepreneurs finding themselves having an unfair disadvantage compared to male founders. But despite many public pledges to do something about the problem it seems as if sexism is still thriving in the startup sector.

At the end of June, several high-profile investors were named and shamed for making inappropriate advances towards women. And now a new study from Allbright, the platform supporting female entrepreneurship, has revealed that 22% of British female founders have felt ignored when they speak to male investors.

According to AllBright’s co-founder Debbie Wosskow, this is a symptom of the sector’s sexism issues. “When only 2.19% of global venture capital funding in a year goes to women, it is clear there is a problem,” she said.

It certainly seems as if the startup ecosystem still has some soul-searching to do. 

A fifth of UK SMEs turning down contracts due to unreasonable conditions Given that generating new business is a pressing need for the majority of startups, it may be surprising to hear that almost half of UK SMEs have turned down contracts.

Having surveyed 501 business owners, Hitachi Capital, the financial services company, revealed that 50% had rejected jobs in the last year, each losing up to £10,000 in the process. Of the people surveyed, 62.6% said they’d couldn’t do the job because they lacked the financial backing to do it properly and nearly half said it was because they couldn’t keep up with demand. Of the people surveyed, 19.2% had turned down contracts because the clients were paying too little, had a lack of management time or were known to be bad payers.

While it certainly is discouraging to have to turn down jobs because you don’t have the capacity, saying no to bad customers just seems like good business.

ELITEBUSINESSMAGAZINE.CO.UK JULY 2017

Upfront July17.indd 1

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A I a nd t he t hird w orl d wa r Alibaba’s founder fears the rise of the machines Jack Ma has hardly played down his optimism about the potential of AI. However, while he’s adamant that smart machines will be commonplace in the future, he’s concerned that it could have catastrophic consequenses if left unchecked.

In a recent interview with CNBC, the Alibaba founder and chairman warned that the new tech could launch a new global conflict. “The first technology revolution caused World War I,” Ma said. “The second technology revolution caused World War II. This is the third technology revolution.”

He argued that previous technological leaps resulted in people losing their jobs and a rise in social tension. With AI and robotics already threatening the jobs of everyone from drivers to factory workers, Ma urged world leaders to prepare for the rise of the machines and their impact on jobs and trade. “My belief is that you have to repair the roof while it is still functioning,” he said.

Here’s hoping the powers that be pay attention. 

July 11 Entrepreneurs Network One Day Spectacular O2 Arena, Peninsula Square, London, SE10 0DX

September 19-20 Smart Summit Business Design Centre, 52 Upper Street, London, N1 0QH

September 27-28 Technology for marketing Olympia London, Hammersmith Rd, London, W14 8UX

September 11 - 15 Social Media Week BFI Southbank Belvedere Rd, London, SE1 8XT

September 27-28 eCommerce Expo Olympia, London Hammersmith Road, London, W14 8UX

September 28 WIRED Security 2017 King’s Place, 90 York Way, Kings Cross, London, N1 9AG

October 4-5 Festival of Marketing Tobacco Dock, Wapping Ln St Katharine’s & Wapping, London, E1W 2SF A full event listing is available on our website: elitebusinessmagazine.co.uk/ events

Option B: Facing adversity, building resilience, and finding joy. WH Allen, £16.99, Out now

ou rarely read business books that break your heart but Option B definitely falls in this category. Together with Adam Grant, the psychologist and author of Originals, Sheryl Sandberg shares the intimate story of how she dealt with the sudden death of her husband. She takes the reader through every painful detail of her sorrow, painting a personal portrait of how Mark Zuckerberg and the inner circle of Facebook helped the company’s COO get back to work and reclaim her joy.

However, the authors also offer solid advice on how to find strength in the face of adversity.

Drawing inspiration from their conversations with victims of rape, cancer and personal loss, Sandberg and Grant unveil how to build resilience and how to learn from painful experiences. Entrepreneurs are surely going to benefit from knowing that that people will always be there to help and that there is no shame in asking for support.

The authors’ insight into handling mistakes is particularly important for new business owners. Instead of ignoring mishaps, the authors urge business leaders to learn from the experience in order to fail forward.

Establishing a culture where employees and entrepreneurs alike aren’t afraid to talk openly about why things went wrong ensures that they will go right in the future.

Packed with solid advice, Option B is a mustread for entrepreneurs. Just watch out for the waterworks.  JULY 2017 ELITEBUSINESSMAGAZINE.CO.UK

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Successful crowdfunding campaigns that have closed in the last quarter

From PayPal to pachyderms

Vita Mojo

£3.2m 13% Equity

The food tech sector is really cooking. We were reminded of this in May when Vita Mojo smashed its £1.5m target within 24 hours and ended up with 1,101 investors doubling its investment target.

Tribe

£1.75m 15.4% Equity

When you’re aiming to become Europe’s biggest sports nutrition brand by 2025, securing £1.75m from 1,740 investors is a good start. The startup aims to use the money to bulk up in 2018.

Zzish

£1.32m 22.7% Equity

Tablets have made their way into British schools over the past few years.

With the backing of 157 investors Zzish aims to bridge the gap between app developers and the classroom even further.

Peter Thiel backs project to bring back the mammoth It’s not really a secret that Peter Thiel doesn’t like death. Where others may simply accept that the grim reaper comes for us all, the PayPal cofounder is actively fighting it. Not only is he supporting science projects aimed at ensuring that humans have a lifeexpectancy stretching over millennia, he’s also now been revealed to have invested in research to bring the mammoth back from extinction.

A new book has unearthed a $100,000 investment made by Thiel to a Harvard

University genomics professor named George Church to bring back the hirsute elephant. The idea behind the project will sound familiar to any fan of Jurassic Park: essentially, the team hopes to take mammoth DNA and modify it to grow within a regular elephant egg.

The project has yet to release any papers and so far has apparently only made mammoth hair grow on lab mice.

Here’s hoping that with the backing of this Silicon Valley giant, Church will be able to complete the tusk. 

What’s the word Lightvert

£763,960 19.9% Equity

You know those skyscrapers covered with ads in Blade Runner? That’s the future adtech startup Lightvert is aiming to bring forth. And thanks to this round, it’s one step closer.

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Companies in the gig economy are free-riding on the welfare state

It would be helpful if broadcasters were willing to be a bit patriotic

Despite the constant negative press covfefe

Frank Field, chair of the Work and Pensions Committee, delivered a report saying that gig-economy companies were using bogus employment statuses

When Andrea Leadsom, the Tory MP, appeared on BBC Newsnight and told the media to be more patriotic about the Brexit talks, she ended up facing the wrath of the Twitterverse

President Donald Trump baffled the world with one of his tweets, prompting millions of people to wonder what covfefe really is. We think it’s served at the Mar-A-Lago

ELITEBUSINESSMAGAZINE.CO.UK JULY 2017

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Oh snap

Theresa may had it all: a majority in parliament and approval ratings far above that of her opponent across the aisle Jeremy Corbyn. And then she called a snap election in the hope of strengthening her hand before the Brexit negotiations kicked off. Instead it did the opposite. When the results came in on June 9, it was revealed that the Conservatives had lost their majority and that Britain was yet again facing a hung parliament.

Since then the Tories have backtracked on many of their manifesto pledges. And even if they have now signed a deal with the Democratic Unionist Party to ensure a majority in parliament, it’s still unclear what this will mean for British startups.

ILLUSTRATION Lucien Fraud / Shutterstock.com

How will the election results affect British startups?

Barnaby Lashbrooke founder, Time etc

Richard Stewart founder, Untangl.co.uk

Mark Homer co-founder, Progressive Property

Paul Goodman chairman, NACFB

Given the political uncertainty, it’s not a stretch to imagine the future of investment incentives like SEIS and EIS might be hanging in the balance. This would, of course, impact investment decisions and change the business landscape of the UK quite considerably. I hope the government will do everything it can to protect British entrepreneurship and the relief on capital gains, which currently makes exits very tax efficient.

Without it, the incentive to build a business would be significantly reduced.

The danger is that UK startups are overlooked as the political focus rests on our Brexit strategy and defensive actions to safeguard big business, trade deals and export markets. If you look at the figures from the Office of National Statistics, they show that wage growth is falling further and further behind inflation. Small businesses forced to hold back pay will have to think about adding value with other rewards and benefits if they want to compete in the war for talent and retain their people.

As the UK goes through uncharted territory in terms of leaving the EU, it is clear that government will need to keep fiscal and monetary support to business for the medium term. The uncertainty also prompted the governor of the Bank of England to say in June that borrowing costs need to “stay on hold”, meaning that the cost of borrowing for business is unlikely to rise anytime soon. This and a more normalised lending environment should provide the support businesses need for the immediate future.

A hung parliament was the last thing the UK business community needed on top of all Brexit uncertainties. Businesses need certainty and a sense of direction to thrive but following the shock election result they have the exact opposite. UK politics is once again in a state of disarray and this is a tough environment for any company to operate in.

Business owners need to be reassured that the economy remains a key focus and is not forgotten amid the political infighting that’s sure to come.

JULY 2017 ELITEBUSINESSMAGAZINE.CO.UK

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THE BIG IDEA

Open Cosmos

Space oddity Open Cosmos is providing a cheap and time-saving way to reach the stars

BY Eric Johansson

T

he final frontier has never been closer than it is today. In Silicon Valley, Space X is tirelessly working to launch interplanetary travel to Mars and Japan has just announced plans to put a human being on the moon – the first astronaut to take that small step since Apollo 17 touched down in 1972. Closer to home, a slew of startups are finding new ways to rocket into orbit and one of the latest enterprises to join the club is Open Cosmos.

The brainchild of CEO and founder Rafael Jordá Siquier, the startup enables customers to launch nanosatellites with a payload of up to 20kg at a fraction of the cost and time of conventional options. While it could traditionally take up to around four years and cost roughly £5m to get a small satellite into orbit, Open Cosmos offers a one-stop solution that slashes both the time and price. The cost for a three-unit nanosatellite mission starts at £500,000 and the timescale from planning to launch is less than a year The company is able to achieve this by doing everything from mission simulations to spacecraft designs inhouse. By owning all the technology, and standardising interfaces, it’s able to simplify the mission, removing handcrafted and costly elements.

“We are entering a new age of space heralded by the miniaturisation and commercialisation of electronics,” says Siquier. “Formerly, testing in orbit meant bespoke, bulky and costly satellite platforms. That’s no longer the case and the UK is leading the way in unlocking space for the masses.”

Funded less than two years ago, Open Cosmos was formed with help – like funding, support and access to investors – from Entrepreneur First, the Londonbased company builder and early-stage investor. This has enabled the company to rapidly grow to a stage where it could launch its first nanosatellite from the International Space Station in March 2017.

With an offering like this, we can certainly see Open Cosmos taking off.

JULY 2017 ELITEBUSINESSMAGAZINE.CO.UK

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Concur integrates expense, travel, and invoice data to provide a single, accurate and actionable view of spending as it happens.

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Jacqueline gold ceo, ann summers

Brave leaders Create inclusive workplaces

Ann Summers chief executive Jacqueline Gold assesses the new gender pay gap reporting rules and considers what leaders can do to make both men and women feel welcome

N

ew rules requiring companies to report on their gender pay gaps came into force earlier this year, which I wholeheartedly welcomed. The fact that a gender pay gap still exists in 2017 is beyond ridiculous. When I hear people talk about there being a gender pay gap in their workplace, it makes me incredibly frustrated that we still need to have these conversations. But while I’m pleased that the government has taken a step in the right direction and I hope that the increased visibility will make businesses think more carefully about their pay structures, it still doesn’t go far enough to ensure workplaces are more equal and welcoming to all.

Ultimately, it’s up to a company’s founder to set the right tone and ensure the culture is fair for all genders. A culture that values diversity when it comes to gender, race, age and experience is more likely to thrive.

Any leader who thinks otherwise is just being short-sighted. My own business has always aimed to employ the best person for the job first and foremost, regardless of their background or gender.

At Ann Summers, even though we’re predominantly a female-focused business, it’s important to me that no man would feel unwelcome. We have an open-door policy that welcomes feedback from anyone in the organisation. This culture of openness allows us to address any concerns people might have about their working environment. We certainly don’t hire or make decisions based on a person’s gender. As long as someone’s performing well, it shouldn’t matter whether they’re the only man in a company of 100 women or vice versa: they should be celebrated and included.

Unfortunately, not all startups manage to be welcoming to everyone and, as a result, they end up missing out on a wealth of talent. Some businesses and even sectors still have a boys’ club mentality and this isn’t going to change overnight. There are industries where women are seriously under-represented and in many cases women aren’t even considered for roles.

To address this in the long term requires leaders to be bold and focus on hiring and supporting all their employees, even if this means breaking away from the status quo. We also need to encourage more young women to consider careers in traditionally male-dominated industries like engineering early on and provide them with more varied career advice. I hope that this early intervention, coupled with brave leadership within businesses, will help us to see some visible cultural changes in startups across the board.

JULY 2017 ELITEBUSINESSMAGAZINE.CO.UK

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With Brexit negotiations kicking off, there are several challenges ahead but fortunately British startups are likely to retain a healthy relationship with the rest of Europe’s tech hubs

REMAINING

22

London is the undisputed champion of European innovation.

Thanks to a powerful combination of access to funding, talent and support, the city has successfully produced several tech unicorns. But Brexit has left the British capital at risk of losing its crown. “Entrepreneurs certainly aren’t welcoming it,” says Philip Slater, founder of The Entrepreneurs Network, the organisation championing startups in the UK. And the numbers back him up: a recent survey from Tech London Advocates revealed that 29% of the capital’s tech leaders doubt the city will still be Europe’s primary innovation hub in five years. “They actively opposed Brexit and this speaks of their frustration,” says Slater. And with the divorce negotiations underway, the community is left wondering what leaving the EU will mean for its relationship with the continent.

The problem is that very little guidance has been offered by the politicians leading the talks. While Theresa May pledged in January that Britain would leave the single market and has given some proposals as to what she wants the rights of EU citizens to be after Brexit, her ill-advised snap election lost the Tories their parliamentary majority and further muddied the subject of what Britain leaving the EU will entail. And this uncertainty has become UK entrepreneurs’ biggest

TOGE

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THER

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London after Brexit

WHAT OPPORTUNITIES DOES BREXIT PRESENT TO UK STARTUPS?

MARC SCHILLACI, FOUNDER OF OXATIS AND CEO OF ACTINIC

Today real opportunity lies abroad. Berlin and Paris have already started offering attractive deals to London startups – like salaries covered by Berlin’s regional government and a unique portal created for British companies that want to set up in France. Those European countries that offer tax incentives and legal advantages may stand to gain a lot in the near future.

JEREMY MIDDLETON, FOUNDER OF HOME SERVE AND ANGEL INVESTOR

Startups are driven by great ideas, access to finance and the drive of their founders.

The antics of politicians and the brinksmanship of the EU negotiations will create headlines but have little impact on the entrepreneurs building the companies that will create jobs and pay taxes in the future. The world of business does not begin and end with politicians.

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ELITEBUSINESSMAGAZINE.CO.UK JULY 2017

worry, according to a Tech London Advocate’s survey. “And that surprised even me,” says Russ Shaw, founder of Tech London Advocates. “I’ve been running these surveys for over three years and this was the first time market uncertainties climbed to the top.”

One huge worry for entrepreneurs has been what Brexit will mean for investment in UK startups. “Right after the vote a lot of people thought investors weren’t going to raise funds in the UK and that they would go elsewhere, like the US, instead,” says Michael Francoise, programme manager at CyLon, the cybersecurity accelerator. “But actually not that much has changed.” As a matter of fact the number of investment deals in UK tech firms rose to 269 deals in 2016, marking a ten-year high, according to a report from EY. “So there has been a huge amount of fundraising over the past six to seven months,” says Francoise.

Additionally, while VC firms like Atomico and 83North have raised funds to invest in startups from all over Europe, the fact that most of them are based in London is good news for UK entrepreneurs. “It gives us a built-in advantage that we won’t lose anytime soon,” says Shaw. “Investors have a better knowledge of what’s local to them.” But even with the home advantage, it’s safe to say that there are plenty of other worries for startups.

One of the especially palpable consequences of the vote and the subsequent unpredictable political landscape is the impact it’s had on startups looking to recruit foreign talent. “The attractiveness of coming to the UK has been impacted,” says Slater.

The lack of clarity around migration has already had the result that foreign tech talent accepting roles at British firms has dropped by a fifth since the Brexit vote and 70% non-native tech workers

London after Brexit

IF YOU’RE VERY TALENTED, IN DEMAND AND COSMOPOLITAN, WOULD YOU REALLY WANT TO GO SOMEWHERE WHERE YOU WON’T FEEL WELCOME? Philip Slater, The Entrepreneurs Network

are even considering leaving the nation, according to research from Hired, the tech recruitment portal. Similar trends can also be spotted across the healthcare, financial and media sectors.

“If you’re very talented, in demand and cosmopolitan, would you really want to go somewhere where you won’t feel welcome?” says Slater.

A similar risk is that the potential restrictions on free movement could also see fewer foreign entrepreneurs launch businesses in the UK. “Because of Brexit, people may not chose to come here and set up their business,” says Slater. “At least not until we’ve got a deal that makes us more welcoming than we are at the moment.” While a massive number of entrepreneurs haven’t abandoned Blighty yet, several founders from EU-countries – such as Marta Krupinska, co-founder of Azimo – have openly said that they’re not sure they feel welcome in Britain anymore.

“The extent of the impact it’s had is hard to judge,” says Slater. “Sure, a lot of entrepreneurs will still be attracted to London because of the companies that are already here but it’s definitely not as attractive as it was before.”

And with other hotbeds of innovation growing by the day across the continent, skilled workers and entrepreneurs are spoiled for choice when it comes to places to move to.

“London is the number one place for innovation and entrepreneurship but it’s clearly not the only option,” says Slater. It’s no secret that France has recently upped its efforts to grow its startup scene. Not only is the world’s largest incubator being built in the south of Paris but the newly elected Emmanuel Macron has also pledged to make France a nation of entrepreneurs by introducing new tech visas. And if founders are less interested in strolling by the Louvre than renting affordable offices and having access to talent then they can always go to Berlin. And the German Free Democratic party would certainly welcome them with open

CHRIS MCCULLOUGH, COFOUNDER OF ROTAGEEK

There are very good reasons to be positive about leaving the EU. But this requires political parties to be sensible in their approach.

They should guarantee the rights of EU nationals in the UK and accept that migration is a positive for both business and the country. We need to use the Brexit opportunity to open up the UK to skilled migrants from all over the world.

FREDDIE ACHOM, FOUNDER AND CHAIRMAN OF ROSEMONT GROUP

While the risks for startups and VC investors seem to have been exacerbated

by Brexit, the demand for innovation should be seen as the greatest opportunity of all right now. This goes double for businesses that don’t have production or manufacturing costs to consider – online and digital startups for example – as they require less cash in the early stages to get started.

JULY 2017 ELITEBUSINESSMAGAZINE.CO.UK

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London after Brexit

Of course there will be some competition but the stronger other European cities become the stronger London will be Russ Shaw, London Tech Advocates

arms, having even invested in an ad on the side of a van driving around London telling startup founders just how welcome they’d be. But while entrepreneurs may opt to set up shop in either of these two or any of the other numerous hubs rising around the continent, it doesn’t necessarily mean that London will suffer as a consequence.

“If London remains competitive, the city will still benefit even if Berlin does become the tech capital of Europe,” says Slater. “It’s just like Silicon Valley: it may be the leader but we all benefit from the technology.”

One way London could benefit from the ascendance of another European startup hub is the way in which the different communities can inspire one other. “These hubs will complement each other as they expand,” says Shaw. “But each city should look at its DNA and consider what it does best.” For instance, the Swedish startup scene is particularly good at developing video games.

Given that Berlin’s entrepreneurial community has grown up among the city’s music and art scene, it’s not really surprising that the German capital’s innovators have a distinctly creative edge to their tech. And the support from the Irish government and accelerators has made Dublin a fintech hub to count on. “Of course there will be some competition but the stronger other European cities become, the stronger London will be,” says Shaw.

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In fact, these hubs can serve as more than just inspiration: they can still potentially act as a stepping stone to new markets. With access to the single market still uncertain, two-fifths of UK startups are planning to open an office on the continent and 10% are even contemplating moving their headquarters, according to a survey from Silicon Valley Bank. “It’s a good business plan for the future,” says Slater. “It’s only rational that people are opening offices and that companies put in place a plan to potentially move.”

And even if other communities are levelling up, their entrepreneurs still choose to go to London to scale. “I often joke that London is the capital of Scandinavia,” says Shaw. “There are so many Swedes, Norwegians and Icelanders working here.” In part, this is because the Nordic innovation centre still lacks the infrastructure to grow properly. “And when they look to scale, Silicon Valley can be a bit too far while London’s proximity means it feels like a more natural step,” Shaw says. “That’s where London and the Scandinavian capitals will maintain a symbiotic relationship. And because of their more Anglo-American nature, these startups usually feel more comfortable expanding here than going to Munich or Paris.” And the Scandi techies are certainly not the only ones.

The vote to leave the EU certainly wasn’t welcomed by many in the tech ecosystem but the unrelenting willpower of both British and European entrepreneurs is sure to make the most out of it. “It’s a big challenge but if we get it right it’s also a big opportunity,” concludes Shaw.

ELITEBUSINESSMAGAZINE.CO.UK JULY 2017

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10/07/2017 18:49

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DOES YOUR CRM PROCESS REALLY MEASURE UP? What is CRM? You may have looked at business solutions in the marketplace and could be forgiven for thinking that CRM is just a software package that will provide unlimited benefits to your business. In a way you are right but CRM is more than the underlying software. CRM is a methodology that helps businesses define their approach to marketing, sales and service processes that facilitate the vital relationships between both existing and potential customers.

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As a business leader you’ll want to focus on the bottom line, cost over sales. Your ambitions will be to make more with less. A professionally implemented CRM system with a strong methodology will help increase productivity by streamlining tasks and reducing duplication. Using documented workflows as a systematic step-by-step approach also provides consistency across business processes and reduces errors.

Other Benefits of CRM • Maintain a current 360 degree view of customer data • Add value to your business through customer insight • Establish clear processes and procedures that your whole team can follow

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Five reasons to become a qualified executive coach Whether you’re looking to get formal accreditation or you’d like to offer even more value to your customers, training to be an executive coach can open doors

you to experience coaching both through observation and practice. By developing your own style of coaching and your own coaching model, you’ll be confident and proud to call yourself a qualified executive coach.

1. Coaching people is an integral part of your job role and you’d like to formalise your skills Coaching enables the coach to discover their own way forward, which can bring about challenging conversations. With coach training you can test models before finding the style that’s right for you in a safe, supportive environment with expert guidance and useful feedback from trained coaches.

5. You realise the value of coaching and wish to introduce it to your organisation Does your company want to increase productivity or create a more positive workplace? Coaching brings a shift in corporate culture that increases productivity by moving from a from command and control model to collaboration and creativity. Your voice can make it happen.

2. You’re a consultant who would like to confidently offer coaching as a service By understanding the boundaries of your skills as a consultant, you may find that you’re limited by the support you can offer. Our graduates have found that adding coaching skills to their repertoire enables them to better serve their clients, increase their retention rates and establish more positive relationships with clients.

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3. You’re a business coach but haven’t qualified yet and you’d like to be accredited In order for the coaching industry to have solidity and a credible reputation, we need professionalism – not only when it comes to training but also in the ongoing management of the coach’s performance. The AoEC does that through accreditation.

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ELITEBUSINESSMAGAZINE.CO.UK JULY 2017

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10/07/2017 15:25

Anil Stocker co-founder and CEO, MarketInvoice

Fundraising for growth: tips for scaleups

While startups are used to navigating largely by gut instinct, preparing properly is the key to getting the most out of fundraising

I

t’s in a startup’s nature to operate fast. Being pragmatic, acting quickly and making decisions without complete information is usually their modus operandi. The thrill and buzz this brings can yield positive results and is also a learning ground for mistakes. However, when it comes to planning around fundraising, raw instinct should be substituted for calm, rational thinking. If you’re at a point in your business where you’re exploring external fundraising as an option, here are some important things to consider before you take action.

Understanding your market If you’re looking at series A or B

fundraising, an investor will want you to prove your product-market fit. In other words, you’ll need to not only show that your idea is a good one but that there’s also a large market for it.

In light of this, it’s a good idea to stay lean and, if possible, not dive in to building anything too complex before fundraising. In the early stages of business, your focus should be centred around learning as much as you can.

Don’t forget how crucial it is to gain an understanding of your customers – who they are, what they want and how you can build your product offering around them. Ideally, you should try to have some revenue already before you do a Series A funding round. So if you can

stay lean and have a small customer base, this is very useful.

Defining unit economics Another key thing investors will certainly look to understand is unit economics. This is an analysis of what it costs you to sell your product versus how much you make from it, which will help investors project its future profitability. When you’re trying to fundraise, you ideally need stable unit economics, not just a notable growth rate. It’s one thing to have high growth rate and popularity but, at a certain point, investors will need to understand aspects of cost and profit-per-unit.

Selecting your target The good news is that there are a lot of investors out there looking for new and promising businesses to work with.

Indeed, there are more investors in London now compared to five years ago when MarketInvoice started fundraising. But this also means that it’s all the more important to be selective to find the one that’s right for you. What is it that you’re looking for? Someone with a wealth of expertise in your specific sector? Or maybe someone who can give you new opportunities for growth overseas? Once you’ve found the right individual or individuals, be sure to customise your pitch in a way that is relevant to them.

Take the time AND do it right Access to working capital can make or break a business shifting into growth mode, so it’s natural for startups to want to act quickly on decisions around fundraising. If you spend the time upfront to put a plan in place, you’re one step closer to setting yourself up for future success.

JULY 2017 ELITEBUSINESSMAGAZINE.CO.UK

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EliteBusiness0717.indd 1

06/07/2017 16:39

Alice Bentinck co-founder, Entrepreneur First

Why startups should solve tough problems

Entrepreneurs should be taking on challenges not because they are easy but because they are hard

W

hen thinking about founding a startup, you might ask yourself what kind of problem you should solve. Without a doubt, the answer is you should solve a hard one. When building a company, it may seem attractive to work on an idea you already know where to start on. However, if one can so easily answer the question of how, then they are notably left with the question of why: if this problem can be so intuitively solved, why

has nobody done it already? For hard problems on the other hand, ones that are marked by a less obvious how, the question of why nobody else has solved it has already been answered: because nobody else can. If only you can solve the problem, then assuming the problem is relevant, it is also inherently valuable. Yours will be a fundamental contribution – it won’t just be another Uber or Lyft, Bumble or Tinder: it will be something groundbreaking and original.

Furthermore, starting a company is hard work.

More often than not, it is a losing battle: regardless of whether you are starting a fish and chips shop or attempting to put humans on Mars, the odds are stacked against you. However, being defeated will be a lot less disappointing if it’s in the name of space exploration rather than the production of battered haddock and mushy peas. Moreover, if you are working on a hard problem, a fully baked solution is not always necessary to found a business that is incredibly valuable. So if you are going to start a business, start an incredibly ambitious one: solve a problem that is as hard as your skill set allows.

But where do these hard, important ideas come from? After all, not all hard problems are worth solving. The most important ideas are found at an intersection between the limit of one’s skill set and most valuable thing they can work on. They come from people with both experience and diversity of insight – and these kinds of people come from melting pots of talent and diversity.

This is why London is so well placed to solve hard problems. Silicon Valley, widely recognised as the centre of the technological world, is filled with talented and ambitious individuals. But the culture is fairly homogenous and, as it is dominated by technology companies, its residents just do not have the domain experience to form convictions concerning what hard problems are worth solving.

But in London this not an issue. The economy comprises a wide range of companies, not just tech but media, finance, education – essentially every kind of business. There is a diverse array of experience and talent – the perfect combination for hard, fundamental, world-changing problems to be identified and solved.

JULY 2017 ELITEBUSINESSMAGAZINE.CO.UK

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10/07/2017 19:09

SPREADING ITS WINGS T HE FO U N D E R S OF BLACK SWA N W E NT F R O M S C R I B B L I NG D OWN I DEA S ON A BEER M AT

TO B EI N G A B LE TO P RED I C T

WH ERE THE NE XT UP UNTIL RECENTLY FORTUNE-TELLING was a realm predominantly populated by selfproclaimed psychics. You certainly wouldn’t expect to see tech entrepreneurs peddling premonitions. But predictions are exactly what the founders of Black Swan, the data-mining startup, make their living on. And unlike those of tabloid astrologists and the mystics frequenting circus tents, Steve King’s and Hugo Amos’s predictions are usually bang on the money.

It all started in early 2011 when the co-founders were drowning their sorrows with a pint. “All great ideas are born out of frustration,” says Amos, the startup’s chief strategy officer. A mind-bogglingly slow project was provoking their exasperation as they’d spent innumerable hours trying to connect different data sets with each other in order to come up with better PR. Washing down their vexations with golden amber, they played with ideas of how they could create a solution to their problem. As the conversation went on they realised that not only would connecting internal and online data provide a lot of valuable insight, it would also enable companies to more accurately predict when and how to push their products. This idea – hastily jotted down on a coaster that’s now framed in the company’s headquarters – would soon change their lives. “Writing

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ELITEBUSINESSMAGAZINE.CO.UK JULY 2017

FLU O U TBRE A K W I L L HI T

BY ERIC JOHANSSON

JULY 2017 ELITEBUSINESSMAGAZINE.CO.UK

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B l ac k Swa n

Writi ng on th at beer mat was th e starting point f or B lack Swan Hugo Amos, chief strategy officer, Black Swan

on that beer mat was the starting point for Black Swan,” says Amos. “Usually you won’t do anything about ideas like that but this one stuck, making us think we might be on to something.” That would prove to be the first of many accurate predictions.

Recognising the vision’s potential, the founders launched Black Swan and devoted the better part of a year to building the first prototype of Nest, its software platform. “It was ugly but functional,” says Amos. It essentially empowered clients by connecting their internal information with the accumulated knowledge of the world wide web. “We figured that you would see some interesting patterns if you linked those two data sets,” says Amos. This data would enable companies to predict consumer behaviour and better plan everything from ad campaigns to solving supply chain issues.

But it doesn’t matter how ingenious an idea is if people are unwilling to pay for it. Fortunately the founders had a few tricks up their sleeves when it came to attracting customers.

“One of the key drivers to our success is the network that we’ve acquired after years working in the advertising industry,” says Amos. Utilising their relationships they were brought on as an R&D project by Disney. Bagging the cinematic powerhouse as a customer is a coup for any startup and for Black Swan it would provide the foundation upon which the founders would organically grow their clientele in the years to come. “Any new business was either from word of mouth or referrals,” says Amos. “We didn’t actually do any marketing or sales activity until this year.”

Given how vital the relationship would become, it may be surprising to hear that Black Swan’s first project with Disney didn’t go exactly to plan. “There is a saying that rain drives people to the cinema,” says King, CEO of Black Swan.

“We were so convinced that we could prove it that we told Disney that we’d do it for free if we were wrong.” Disney agreed and the two founders set out to verify their theory.

But they hit a tiny snag: the result proved that wet weather actually has no effect on whether people go to watch films.

“But we did actually find out that low pressure drives people 36

to movie theatres,” says King. “Fortunately, Disney kindly paid us anyway.”

And Black Swan desperately needed that cash. While the sale of King’s digital agency Digital Jigsaw and a £2.5m investment from equity firm Blackstone had seen the company through its initial development, the startup was quickly running out of money. “We only survived on early payments from clients,” says King. However, living on the financial edge was actually a huge benefit. “It made us much more problem-orientated,” says King. “We had to solve specific problems accurately, otherwise we wouldn’t get projects and then we wouldn’t survive.” The financial situation improved even more in 2013 when the company raised its series A, spearheaded by Japanese investor Mitsui. The influx of capital was invested in the improvement of Nest and helped solve Black Swan’s cashflow issues.

Armed with healthier finances, the startup received another boost when the Sunday Times awarded it the top spots on two of its lists.

First Black Swan was named number one in the publication’s Tech Track Ones to Watch in 2014 and then the UK’s fastest growing startup in the Start-up Track 15 2015 list. “Both Hugo and I were over the moon,” says King. “It had a huge impact on our business and validated us in our customers’ eyes.”

In the years that followed, Black Swan offered a wide range of predictions to companies like Samsung, Debenhams, Vodafone and PepsiCo. “We did a job for Tesco,” says Amos. “For many years they’d failed to forecast when the first big barbecue weekend would happen.”

By combining Tesco’s sales data with weather reports, trending Twitter topics and online chatter, Black Swan was able to say when people would fire up their grills and how many hamburgers people in different areas were likely to buy. Using similar methods, the company has been able to predict in which postcodes flu outbreaks will emerge and helped 7-Eleven in Japan boost profits by over 12%.

ELITEBUSINESSMAGAZINE.CO.UK JULY 2017

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10/07/2017 18:42

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06/07/2017 16:43

B l ac k Swa n

However, the company hasn’t just helped businesses grow but has also improved the world through its non-profit division White Swan. The story behind it started with Black Swan wanting to help King’s sick sister. “About eleven years ago, she began to become incredibly tired,” he says. Little by little and without the doctors being able to tell them why, his family watched her condition deteriorate to the point where she needed a wheelchair and help to go to the toilet. Desperate to find the cause, Black Swan’s team used its algorithms to scan the internet and even posted a video asking people to reply if they had suffered similar symptoms.

“Rather than looking for problems the way doctors talked about them, we searched for human descriptions,” says King. “We then cross-referenced the keywords with the NHS’s list of diseases.”

This resulted in five potential diagnoses that King urged his sister’s doctor to test for.

“He looked at me like I was mad,” he says.

Fortunately, that didn’t deter the doctor from checking out the leads and a week later King’s sister was diagnosed with Parkinson’s dystonia and began her treatment. “I phoned home a few days later at lunch time and there my sister was, sounding absolutely normal,” he says. “She’d actually been cleaning the house all day.” Now she’s even training for a triathlon. Since then, White Swan has helped the NHS predict spikes in A&E visits and is currently on track to become an independent charity by the end of the summer.

And that isn’t the only thing on the cards for Black Swan. At the moment, the scaleup has offices in the UK, the US, Hungary and South Africa but is soon expecting to grow even further. “Now we’re at a point where we want to scale in a much bigger way,” says King. Having raised £6.2m in its series B last year, the founders have earmarked the money for the future growth of the company and the improvement of its Nest platform. For instance, while the founders’ networks helped the scaleup secure its first clients, it has now introduced commercial and marketing teams to drive the business’s sustainability.

However, the founders aren’t stopping there. Not only are they already preparing for a potential series C round in 2018 but they also reveal their plans for an upcoming IPO. “We want to start our listing process and float on the Nasdaq in 2020,” says King.

Before those plans come to fruition, the immediate focus of the founding team is to expand Black Swan across the pond. “We see a lot of opportunities in the US,” says Amos.

One of the reasons for the expansion is to get closer to clients like Unilever, Disney and PepsiCo. Another is the prospect Hugo Amos, chief strategy officer, Black Swan of finding new ones. “The US is more ready for our services than the UK is,” says Amos. “Of course we’ll still be growing Europe but we’ll be focusing on the States.”

Given the successes of the past, we certainly see great things on the horizon for Black Swan. And we’re willing to bet that they’re seeing it too.

All great ideas are born out of frustration 38

ELITEBUSINESSMAGAZINE.CO.UK JULY 2017

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A dverti si ng f e ature

ALTERNATIVE FINANCE for a changing world

NOT JUST FOR WHEN THE BANK SAYS NO Effective routes to funding for SMEs across all sectors throughout the UK

T

he alternative finance industry was born as a result of the financial crisis, when the banks had severely reduced their lending capacities and savers were struggling to access any decent returns on their investments; things haven’t really changed. A small number of companies started up in the early days offering access to funding for both businesses and individuals, and varied rates of interest based on the risks involved.

In the years since then a large number of lenders have joined the sector offering a variety of ways to gain funding and invest your money. But the one thing that they all have in common is that they link investors more directly with borrowers, cutting out the traditional middle man and thereby providing the potential for better rates for all parties involved.

From the borrowers’ perspective the alternative finance industry offers access to funding that many have struggled to obtain for years. However, it is not just a last chance saloon – shrewd businesses are recognising that other benefits of alternative finance can make it a very viable and astute way to drive their company forward.

ThinCats provides a flexible way to fund business ventures from MBOs to growth capital, cashflow to refinancing, and offers bespoke loan options to suit the needs of

businesses across all industries and sectors.

Starting from the belief that applications deserve more than just harsh number crunching, ThinCats uses innovative data analysis with a human touch to candidly assess each loan, listening to the story behind each case.

Reduced and simplified covenants and conditions ensure that drawdown times are days rather than months, and there is no need to wait a year or more between loans, as with many of the traditional lenders, giving sagacious business owners the opportunity to make the most of lucrative opportunities as they arise. Fees are transparent and upfront, security can be tailored to each proposal and repayments are flexible.

Alternative finance may still seem new to some, but ThinCats is one of the pioneers of the industry. The experience and institutional expertise behind the company substantiates the recommendation that it should be considered by any prudent SME owner looking to make the best funding decision for the future of their business.

ThinCats is a trading name of Business Loan Network Limited (BLN) registered in England & Wales No. 07248014, authorised and regulated by the Financial Conduct Authority. BLN is not covered by the Financial Services Compensation Scheme. Capital is at risk. ThinCats is an online peer to peer lending platform, successful funding of your loan is dependent on our lenders and not guaranteed.

JULY 2017 ELITEBUSINESSMAGAZINE.CO.UK

ThinCats Advertorial July17.indd 1

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10/07/2017 15:31

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EliteBusiness0717.indd 1

06/07/2017 16:36

B loc kc ha i n

BY maria barr

In blockchain we trust Will blockchain prove to be the building blocks of a more transparent financial services industry or is the house destined to come crumbling down?

T

he British public has some trust issues.

Thanks to a slew of high-profile hacks, corporate scandals and broken promises from politicians, there’s an unmistakable scepticism surrounding the people who make our laws, sell us things and handle our money or data. Financial services companies have it particularly bad and are still suffering from the blowback from the 2008 crisis, which revealed just how little we knew about what they were up to. In fact, a study in 2016 by Accenture, the

management consultancy, found that just 29% of respondents thought banks were trustworthy. But perhaps instead of trusting banks, people might be willing to place their faith in code instead.

Blockchain has been around for some time now but it’s only relatively recently that people have started to speak of it as a sort of truth serum for the way transactions are recorded. If things keep progressing as they are, it could seriously disrupt financial services companies – or perhaps even restore people’s confidence in them.

JULY 2017 ELITEBUSINESSMAGAZINE.CO.UK

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10/07/2017 18:58

B LOC KC H A I N

At the heart of the technology is a shared and decentralised ledger that allows people to stack entries on top of older ones and view others.

But once data has been added, history can’t be rewritten and edits can only be made when the majority agrees to it. There’s no one controller who wields more editing power than others. This means that for any given exchange, you’re able to see exactly who’s had ownership and every stage is automatically logged – no middleman necessary.

And this is leading many in the industry to get very excited. “Blockchain-inspired distributedledger technology has the potential to transform the financial services industry,” says Charley Cooper, managing director of R3, the distributedledger technology firm. “It will allow financial agreements to be recorded and automatically managed without errors. Duplications, reconciliations, failed matches and breaks will be things of the past. Isolated islands of asset representations will be no more. This is a huge opportunity to improve the way the financial sector does business.”

It’s still early days for blockchain but we’re already starting to see some creative applications from startups. Maecenas is promising to transform the art-buying market and make it virtually impossible to falsify a painting while GovCoin is exploring how blockchain can be applied to the benefits payments process in partnership with the Department of Work and Pensions.

Many of these innovations were inspired by a frustration with the status quo: Nuggets, a service that allows people to make payments or log in without having their data stored, was born out of founder Alastair Johnson’s discomfort with the way personal information was traditionally being handled by brands. “I had a bad experience with my credit card details being used fraudulently and developed an appreciation of just how open my

Financial services companies are interested in blockchain because it has the power to do away with them entirely Simon Carlino, Regent Street Strategies

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ELITEBUSINESSMAGAZINE.CO.UK JULY 2017

data was to being used and abused,” he says. “You wouldn’t leave your credit card details in the shop round the corner so why do it online? I was sure there had to be a better way.”

Johnson’s better way came in the form of a blockchain-based solution that allows people to use a single biometric tool online. And it was the immutable ledger in particular that he refers to as “an epiphany that opened up a whole new realm of possibilities”.

For the banks and traditional financial service providers, it must be tough working out whether to be excited by the technology’s potential or terrified that it will make them extinct. Many are using outdated legacy systems that are inefficient and at the stage when they’re ready to be replaced. In fact, Santander has estimated that blockchain could save banks up to $20bn each year in administrative costs. However, it could also herald the start of a peer-topeer lending regime that’s cheaper and more appealing to

BLOC KC HA I N

a bad thing of course but for Marieke Flament, managing director at Circle, the payments company, it’s important that blockchain’s massive potential isn’t stifled so early on in its story. “The thing is to regulate the services, not the technology,” she advises. “Thankfully, the FCA has been forward-thinking and is looking at all the services around blockchain and engaging fintech startups in a dialogue.” Organisations like R3 also believe it’s crucial that the FCA continues to have these conversations to allow early-stage startups to innovate and come of age in the right regulatory environment. “The most effective regulations are born of real-world experimentation and consultation,” says Cooper.

R3, for its part, invites regulators, trade associations and government to observe the ways in which its members are trialling the technology in a bid to boost mutual understanding.

And as these conversations take place, cybersecurity continues to be one of the hottest topics: if blockchain proves to be not quite as tamper-proof as some are claiming, any trust it gains will vanish quickly.

Theoretically, blockchain transactions are prohibitively difficult to hack because of the sheer amount of computing power needed to alter each and every block. But it’s certainly not an impossible task, as Ethereum, the blockchain application platform, discovered when it was compromised in 2016. “Blockchain is trustworthy to an extent but nothing is hackproof,” warns Carlino. There’s also a nervousness surrounding quantum computing’s potential in the future to be able to tamper with ledgers on a massive scale. “Right now it would cost way more to hack a blockchain than you’d receive in return but with computers capable of carrying out billions of calculations per second, it could become a problem,” he adds.

That being said, it’s just as likely Charley Cooper, managing director of blockchain that an intrepid entrepreneur will consortium R3 figure out a solution before it becomes something to worry about. Russian scientists have already experimented consumers. “Financial services companies are interested with using quantum mechanics to in blockchain because it has the power to do away with secure blockchains and developers them entirely,” says Simon Carlino, founder of Regent Street across the world are continually Strategies, the consultancy specialising in blockchain. But pushing the boundaries of what’s necessity is often the mother of invention. “It’s no accident possible. Flament likens where we a multitude of blockchain startups can be found at the are now to the very early days of the Level39 accelerator in the heart of the City: financial services internet, though the pace of change is companies are working with incubators, accelerators and startups in the hope that they’ll get some useful, value-added much faster. “Even compared to a year products out of it.” For instance, banks that develop a private ago, things are changing very quickly,” blockchain could offer it to high-end customers. “It’s a she says. “Using Ethereum, new types fascinating balancing act for the banks,” Carlino adds. of products are being built all the time But with things moving so fast, the regulators have in different shapes and forms. It will taken a cautious, wait-and-see approach so far. In the UK, be interesting to see what sticks and the Financial Conduct Authority (FCA) is considering what’s scaleable. But I can say that the blockchain-specific regulation because not all aspects of it fit ideas that have been emerging so far into the current framework. More regulation is by no means are very encouraging.”

DUPLICATIONS, RECONCILIATIONS, FAILED MATCHES AND BREAKS WILL BE THINGS OF THE PAST. THIS IS A HUGE OPPORTUNITY

JULY 2017 ELITEBUSINESSMAGAZINE.CO.UK

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RISE AND SHINE

BY JOSH RUSSELL PHOTOGRAPHY BY EMILIE SANDY

HAVING HELPED SLEEPY CONSUMERS WAKE UP WITH A SPRING IN THEIR STEP, JAS BAGNIEWSKI’S EVE SLEEP IS ENJOYING A NEW DAWN FOLLOWING ITS RECENT IPO 44

ELITEBUSINESSMAGAZINE.CO.UK JULY 2017

PICTURE THE KIND OF ENTREPRENEUR attracted to the mattress industry and you’re unlikely to come up with someone like Jas Bagniewski. But the cofounder and CEO of eve Sleep, the sleep startup taking the UK by storm, is used to defying people’s expectations. “When we showed up at mattress manufacturers covered in tattoos, with long hair and dressed in hoodies, they genuinely thought we were mad,” Bagniewski says. “They had no idea who we were, we had no brand and we said ‘we’re going to sell between 100 and a few thousand mattresses’.” From the perspective of some of the largest mattress manufacturers in the world, it must have sounded pretty unlikely that this ragtag bunch of entrepreneurs would make good on their ambition to disrupt bedroom behemoths.

Still, one company agreed to the deal – most likely, Bagniewski acknowledges, in an attempt to get rid of them. “When we came back a week later and said ‘great news: we sold 6,000 mattresses’, the guy almost fell off his chair,” he says. “He said: ‘Are you nuts? No one in the world can manufacture that many mattresses in a month.’”

Given his background, it’s not surprising to hear that Bagniewski isn’t one to simply go along with the crowd. Born in Warsaw to Polish parents, his family moved to the UK when he was just three years old. “They didn’t really come over here seeking opportunities,” he says. “They were effectively asylum seekers because my dad was an anti-communist dissident.” As this was decades before Poland’s entry into the EU, it was hard for Bagniewski’s parents to find work, meaning his family was relatively poor. Fortunately, thanks to the Assisted Places Scheme – which provided under-privileged children places at fee-paying independent schools – the young entrepreneur-tobe was able to secure a place at Westminster School, although he admits his disregard for authority sometimes landed him in trouble. “I always seemed to be the guy who was suspended the most,” he says. “I always wanted to do things my own way and never really liked being told what to do.”

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nd Bagniewski’s aversion to walking well-trodden paths meant that even when he graduated from school, he was unsure what direction he wanted his career to go in. He ended up taking three gap years before eventually attending the University of Manchester to study for his undergrad and then UCL for his master’s degree. “When I finished uni in 2006, everybody was either going into banking or marketing roles and none of it really appealed to me,” he says. “Back then you never really had a sense that you could have a career outside the mainstream.” In light of this, Bagniewski decided to take a position consulting in financial services and utilities at Accenture, believing it would at least give him a broad understanding of the world of business. “In reality, Accenture was not a good grounding for that at all: it was very process-driven, massive projects in which you’d only oversee a tiny little piece,” he says. “So actually I found it very unfulfilling.”

Fortunately, before too long Bagniewski was offered the chance to throw his lot in with some entrepreneurs known for their unconventional, and often controversial, approach to business.

Thanks to an introduction from a mutual acquaintance, in 2008 Bagniewski found himself sat opposite the celebrated Samwer siblings, the founders of renowned Berlin-based incubator Rocket Internet. “It felt like I was on a hiddencamera show because within two hours they were talking about me heading up some company in Poland: I really had no idea who these guys were,” he says. “But I just thought I would feel like a coward if I said no.”

Without a doubt, working under the Samwers gave Bagniewski the crash course in business building he’d been seeking. As well as helping to build out Place Mniej, an auto insurance and financial services price-comparison site, and Zalando, Rocket Internet’s flagship e-commerce company, in Poland and the UK respectively, Bagniewski was also tasked with overseeing the British side of CityDeal, a deals website in the mould of Groupon. And while he was instrumental 46

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I ALWAYS WANTED TO DO THINGS MY OWN WAY AND NEVER REALLY LIKED BEING TOLD WHAT TO DO

in pitching the business when the latter came looking to acquire its German doppelganger, the taciturn Samwers weren’t the kind of entrepreneurs to wax lyrical about a job well done. “The day we found out about the sale, Mark Samwer came in and said ‘we’re not celebrating: it’s no big deal, just get back to work’,” Bagniewski recalls. “That’s the mentality at Rocket and, to be honest, I loved it. I like feeling there’s always more to be done.”

And there was still plenty for the team to sink its teeth into: the deal the Samwers had struck meant that they would continue to head up Groupon’s operations outside the US, meaning that Bagniewski was placed in charge of national platforms for the UK operation. And this led the entrepreneur to a lightbulb moment. “The deals were always local businesses but we began thinking that it would be cool to start doing national level deals,” he says. However, while initial deals for Zipcar and Interflora were very successful, when Bagniewski came to leave Groupon, he and his friends – and future eve co-founders – James Fryer and Joe Moore were still keen on investigating how they could create a killer UK-wide offer. “We knew that you needed high-margin products that you could slash the pricing on,” he says. “And because with Groupon you could sell five units or you could sell 50,000, it’s just dangerous to hold loads of stock so we wanted them to be locally sourced. For those reasons, we decided on mattresses.”

Dubbed Zen Bedrooms, it’s safe to say manufacturers weren’t the only ones shocked by the success of this new venture. “Honestly at the time we were just thinking about it as a little thing on the side,” says Bagniewski. “It ended up being the biggest Groupon deal of all time.”

The first 6,000 mattresses were purchased in a single day, generating £2m in turnover and, after their initial shock, mattress manufacturers began clamouring to help the entrepreneurs meet new orders, particularly as they started to replicate their success overseas. “We did the same thing in France and did 9,000 on the first day, while in Germany it was like 3,000: pretty much every market we went into, we were doing these huge volumes and everybody wanted to work with us,” Bagniewski says. “It meant manufacturers took us seriously, gave us great prices and, most importantly, worked very closely with us on developing the product.”

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Despite this huge success however, Bagniewski and his cohorts started to realise they could achieve much more than just undercutting the competition on price: they began to see there was a lot more to consumers’ relationships with their beds than their rivals realised. “We always had this sense that so much interesting stuff happens in bed,” he says. “We started to receive stories from people saying things like ‘our kids were conceived on your mattress’ and pictures of dogs sleeping in the beds.” With the help of Bagniewski’s cousin Kuba Wieczorek, who left his position as head of sports marketing at Channel 4 to join as the company’s co-founder and CMO, the entrepreneurs began to look at how they could create a new brand in the sector that moved away from cliches about feathers and clouds and actually encapsulated the life and energy consumers associated with a good night’s sleep.

“The real insight that we had was that every great day starts with the night before,” he says. “The brand grew quite organically from that: the eve of something is always very exciting, while the yellow colour scheme denotes morning, positivity and energy.”

However, launching eve would require a little liquid propellant in the form of VC investment: fortunately an old ally had already helped hook Bagniewski up with a fuel source. “When I left Rocket, Mark Samwer introduced me to pretty much every fund in London and said ‘meet with these guys, back them: they’re great’,” he says. By the time the idea for eve had formed, its founders had already established a close relationship with DN Capital and Octopus Investments, quickly netting a £645,000 seed round. Before too long, the VCs followed this up with a £2.5m series A round in late 2015 and a £14m series B round at the beginning of 2016 – although Bagniewski explains this wouldn’t have been possible without the support of Octopus director Luke Hakes and DN Capital investor Lawrence Barclay. “They were completely instrumental in the story of eve really: they backed us from day one, every time we needed help they were there and every time we needed to raise more money they put their weight behind it,” he says.

But even with an injection of capital behind it, as a new brand eve had to build a whole new customer base for itself. Fortunately, news of its first funding round gave it a PR push that helped get the word out to the British public. “It started in the business press – ‘mattress company raises money from venture capitalists’ – and then that 48

We showed up at mattress manufacturers covered in tattoos, with long hair and dressed in hoodies

started to transition out a little bit more out into consumer press,” Bagniewski says. And once consumers started purchasing eve’s mattresses, the fact that it was a highly recognisable brand in a sector filled with white-label products and customers had 100 nights to return the product if they didn’t like it meant that word-of-mouth began to take care of the rest – helped along by some judicious use of social media. “Most people don’t even know what mattress they sleep on but with ours if you put a post on Facebook, so many people end up writing ‘I got this mattress: it changed my life’,” says Bagniewski. “It was just a completely new way of marketing the product.”

When eve first launched, its four founders were handling every task themselves but this rapidly became untenable as demand for its mattresses soared. “We started with an aim of hiring people better than us,” says Bagniewski. “And that was quite easy – because everyone was better than us – so we started aiming for best in category.” Hiring through their own networks to begin with, the founders quickly began snapping up talent from places like Mr & Mrs Smith, Secret Escapes and Made.com. “We attracted people more with our enthusiasm, with our personal ability to connect with them and get them to buy into what we’re doing,” Bagniewski says.

“As a result, eve now has this amazing energy and vibrancy.”

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10/07/2017 20:35

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Every great day starts with the night before: the brand grew quite organically from that Thanks to the tenacity of its talent, eve was able to scale its way up until it had a presence in 10 different countries and was pulling in just under £12m in revenue. However, as its profile has grown, so have the number of similar brands keen to emulate its success. “In some ways, you feel quite proud,” Bagniewski says. “It’s definitely a vindication of what we’ve achieved: there aren’t just companies copying what we’re doing but also copying the way that we do it.” But even though many rival mattress companies have sprung up that also offer 100-day trials and operate similar referral schemes, Bagniewski isn’t losing a lot of sleep about the pretenders to eve’s throne.

“There’s a reason why we’re the biggest and have secured the most money, the highest profile investors and the best online reviews,” Bagniewski says. “And, in the end, we can’t really do anything else about those other guys so we just let them crack on, wish them luck and focus on our own game plan.”

After all, eve has had some big dreams to focus on: just two months ago the startup launched its IPO, an opportunity that first dawned on Bagniewski and his fellow entrepreneurs when DN Capital introduced them to Paul Pindar.

When he sat down with the eve team in 2016, the investor and former chief exec of Capita explained he had recently guided the online estate agent Purplebricks through its highly successful listing on AIM and he mooted the idea of them doing the same. “We thought he was a little bit mad when he suggested that we IPO,” says Bagniewski. “But we kind of loved that because we always felt a little bit mad ourselves.”

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While Bagniewski explains that Pindar’s guidance was a useful counterbalance to their “scrappy and reactive” enthusiasm, it’s clear that he still wasn’t impervious to getting swept up in the excitement of it all. “I think we egged each other on a little bit,” Bagniewski admits.

Originally slated for 2019, the IPO was soon brought forward at the entrepreneurs’ behest, sparking a game of oneupmanship that saw the date brought forward a further two times to May 2017. And while some sections of the press may have scoffed at the idea of a startup of such tender years floating on AIM, without a doubt eve’s IPO has been a roaring success, raising £35m and giving the startup a valuation of £140m. “What was important about the IPO is the profile that it’s given us as a company,” says Bagniewski. “It completely separates us from the pack of mattress startups who are trying to imitate us. Now it’s very clear as a consumer: you can see eve is in a different league.”

And evidently this is a league eve intends to win: fresh from its IPO, the startup has some huge plans in the offing. “We’re already in most of the markets that we’ve forecasted we’d be in by the end of 2020,” says Bagniewski. “But actually scaling and investing in those markets is the next step.” On top of this, eve is looking to build its brand awareness out so that it increasingly becomes consumers’ first port of call for mattresses and it is experimenting with a concessions model to bring its brand into bricks and mortar stores. But perhaps the biggest step it’s taking is investing in its product portfolio, expanding into far more than just mattresses.

“A year ago, we had one product – now we have eight,” he says. “Recently we’ve launched linen bed sheets, a baby mattress and we’re about to launch a bed frame. We also have a lot of really cool bedding stuff coming up.”

Without a doubt, the company seems like it’s on the eve of something great. And while it may seem like Bagniewski has a king-size challenge in front of him, he recalls the advice a former colleague at Rocket Internet gave him when he was attempting to build his first business and was feeling overwhelmed by the enormity of the task.

“He said ‘have a laser focus: don’t think about how to build the biggest company in the world – just focus on whatever the next stage is,” Bagniewski recalls. “If you just think about it as a million little steps, that’s much easier than thinking about one enormous leap.”

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EliteBusiness0717.indd 1

07/07/2017 11:44

P ODC AS TS

BY JOSH RUSSELL

C A S T I WITH SHOWS LIKE SERIAL AND MISSING RICHARD SIMMONS BRINGING PODCASTS INTO THE MAINSTREAM, MAKING THE MOST OF THIS WILD FRONTIER CAN HELP STARTUPS REACH A HIGHLY ENGAGED AUDIENCE UNLESS YOU’VE BEEN LIVING UNDER A ROCK, it’s hard to escape the buzz that has built up around podcasts over the last few years. Whether it’s the cult smash Serial turning the world into amateur sleuths, S-Town beautifully championing the return of long-form narrative journalism or WTF with Marc Maron giving us intimate interviews with Bruce Springsteen, the late Robin Williams and President Obama, it’s safe to say that podcasts have come into their own. And because of that, the medium is proving a fertile ground for startups looking to use it to engage with new audiences.

Despite the huge amounts of attention it has received recently, podcasting is far from a new phenomenon: the episodic digital audio format has existed for over a decade.

What has changed is the accessibility of the medium and the number of people turning fresh ideas into huge hits.

“We’re seeing a whole new generation of content creators,” says Adam Martin, chief content officer of Acast, the curated platform for podcasts. “It’s not two white, male, middle-class guys in a room talking to one another: it’s far beyond that. It’s also under-represented voices like women of colour leading the charge with extraordinary shows that challenge our perceptions of the world.”

Almost anybody can create a podcast and, with so few gatekeepers, the industry is allowing a wide array of voices to express themselves in new and often quite radical ways.

This can range from two muslim women talking about representations of their religion in the American media in #GoodMuslimBadMuslim to comedians’ humorous takes on their own mental health in The Hilarious World of Depression. And the sheer diversity of identities and ideas involved is drawing in new listeners in their droves. “With every new format and innovative show that comes along, they’re bringing new people and new audiences,” Martin 52

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says. “These weird outlier hits can just come out of nowhere, explode overnight and garner a significant audience.”

And inevitably this has pricked up the ears of advertisers looking to reach engaged audiences, particularly given that the very nature of podcasting means that you have a listener’s full focus. “Spotify and radio are lean-back experiences: they often play in the background whilst we get on with our day,” says Martin. “Podcasting is a lean-in experience: once I’ve put those headphones on, it has my attention and it’s a very intimate environment.” Because of this, adverts on podcasts find the ears of an already engaged audience and aren’t attempting to steal attention away from other activities. This means that ads on podcasts often hit home far more frequently than more interruptive marketing methods. “Rather than being played in commercial radio where we find it obstructive, you have this extraordinary medium that converts much better for advertisers,” Martin explains.

So if an advertiser chooses to stick a pre-recorded spot on Serial or S-Town, they can guarantee that its listeners will be paying attention. However, this doesn’t mean that using pre-recorded ads can’t sometimes be tonally tricky: the spirit of some podcasts can be more Deadwood than Downton Abbey. “At least once a day, we’ll be having a conversation and the first five minutes will be dedicated to character assassination,” says Chris Glasson, co-host of Hardcore Listing, the podcast dedicated to in-depth topfive lists. “We’re often quite rude: that’s predominantly the format.” Whether you’re listening to Harmontown or Hardcore Listing, plenty of podcasts like pushing buttons and boundaries and this can often sit uncomfortably alongside a buttoned-up ad for a mainstream brand. “You might hear me saying something really graphic and then an ad comes on for the Financial Times,” says Glasson. “People sometimes find that quite funny but it can feel disjointed.”

Fortunately, there is another option and one that proves incredibly powerful. A significant number of podcasters and advertisers now use native, host-read ads, which prevent users being yanked out of the world the podcast has created and provide a much more seamless listening experience.

“The way it’s framed within the context of the podcast itself means that it flows: it doesn’t disrupt or interrupt,” says Martin. “That tonal consistency means listeners don’t

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find it as onerous a listening experience.”

But more than just preventing awkward lurches in tone, having ads read by someone the listener has a personal relationship with and a much greater affinity for means that they are far more likely to engage with its content.

“Subscribers to podcasts come back for the hosts of the show: they feel they have a personal rapport with them,” Martin says. “So when the host, that intimate voice in your ear, is the one reading that commercial message, you’re much more amenable to listening to it.”

And while brands may be tempted to send podcasters a script and insist on controlling every detail of the spot, Martin urges them to give the shows’ hosts as free a rein as possible. “The braver the brand and the more able they are to give up the commercial interpretation of their brand message to the podcaster, the better it goes,” he says. Not only are the hosts the ones that are best placed to understand what will hit home with their audiences but giving creative people free reign can

Inevitably, being prepared to be much more fluid and relaxed with their brand is an idea more likely to appeal to startups than established companies. But this isn’t the only reason advertising on the medium is a good fit for startups. “Podcast listeners tend to skew better educated, they tend to have a little bit of money in their pocket, they’re all about self-learning, self-knowledge and awareness – that’s a demographic you can’t easily reach via banner or radio ads,” Martin says.

“That’s why the brands that are coming into podcasting – the Squarespaces and Hello Freshes – are the ones that resonate particularly well with that kind of audience.”

However, there is still considerable variability within this demographic and startups shouldn’t necessarily just assume that advertising on big-name shows like Serial and S-Town is going to offer the best return. “Your first question always has to be: ‘am I delivering a service or product that in any Adam Martin, Acast way appeals to fans of that podcast?’” says Glasson. “If your startup involves thrillers or true crime books, then you can aim yield remarkable results. For example, to sponsor those casts; if you’re selling socks then that’s more difficult.” you would suspect that an ad on Pod Fortunately, the explosion of new shows the medium has seen in recent Save America where the hosts joshingly years means that there is a podcast for almost every interest – from reinterpreted a sponsor’s subscription knitting to Dungeons & Dragons – and this means targeting your ads flower service as a cocaine delivery service has never been easier. “Half your work has already been done for you,” would have burned bridges with the brand Glasson says. “If you’ve found a podcast for pre-pubescent teen boys into forever. However, the fact that it tickled manga and you happen to be selling manga comics, then you pretty much listeners’ funny bones and established the know that you’re going to get a decent return on investment.” company as one that was able to laugh at But with the right targeting, startups can certainly make a name for itself actually seemed to pay off. “The ad themselves in the podcast space, just as Squarespace, Casper and Blue stayed within the show and I suspect the Apron have before them. And given that the medium is still developing, brand went ‘this is way off grid for us but there’s never been a better time for entrepreneurs to get involved and actually it’s working: the listeners will stamp their mark on the industry. “It still feels like the wild west,” understand and it’s in a tone of voice that Martin says. “The rules haven’t been set yet, either in terms of format or makes sense to them’,” says Martin. ad style: it’s all there to be discovered.”

when that intimate voice in your ear is the one reading a commercial message, you’re much more amenable to listening to it

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Sales & Marketing -Podcasts.indd 3

10/07/2017 19:07

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06/07/2017 17:01

A TASTE FOR TECH

BRITAIN’S STARTUP ECOSYSTEM IS GAINING AN APPETITE FOR HIGH-TECH FOOD

BY MARIA BARR

IN

THE THANET EARTH FARM, A HIGH-TECH GREENHOUSE the size of Heathrow’s Terminal 5, rows and rows of juicy tomatoes are taking shape on horizontal wires. A central computer optimises the heat, humidity, light and nutrients they need, allowing them to grow all year round – rather than just for seven months. There are plenty of examples of similarly high-tech food solutions: from bio-bean founder Arthur Kay turning coffee bean waste into biofuel to food-delivery company Farmdrop, which just raised £7m in a series A round to help better connect consumers to producers.

But, for the large part, the technology underpinning what’s on your plate today is probably not hugely complex. And that’s exactly what makes food as a sector so ripe for disruption. “The food industry is incredibly slow to take up technology: there are tonnes of inefficiencies and, therefore, opportunities to apply technology to it,” says Nadia El Hadery, food entrepreneur and founder of YFood, the organisation that aims to drive innovation in the food industry.

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was launched in 2014. The big players are also looking to tap into the innovative potential of startups: VCs are slowly warming to food tech startups while Just Eat and Waitrose have both launched foodtech accelerators aimed at spotting and nurturing talent.

So far, many of the most successful foodtech startups like CityMunch, a Just Eat accelerator alumnus that uses data to offer people restaurant discounts, and Winnow, which helps restaurants track how much food they’re wasting, And there’s already been a wave of savvy don’t tend to manufacture food.

Instead, they’re using technology to startups that are spotting gaps in the market. make the way we eat more accessible “Unlike the app market, for example, the food and efficient. And it’s easy to see why: Britain doesn’t have that many sector isn’t saturated yet and it’s arguably easier food manufacturers willing or able to to attract attention because there are fewer produce small-scale batches and the people innovating,” says Julian Hearn, coprocess of getting from idea to product can be prohibitively time-consuming. founder of Huel, the formula that promises to be “It was hard getting off the ground: nutritionally complete and comes in bar or shake legislation can be a hindrance but really the biggest hurdle was convincing form. In other words, it’s all to play for. manufacturers to produce our product at scale,” says Hearn of Huel’s early Supporting these startups is an evolving ecosystem days. “Even though Huel is a fairly simple product geared towards driving food innovation from farm to with only a handful of ingredients, it took nearly a year. fork. In 2016, the government launched the UK Food Thankfully we had the funds but for a smaller startup Innovation Network to help food producers and there with a bright idea, they’d probably run out of money are a number of food incubators and accelerators like long before that.”

Cinnamon Bridge, The Food Foundry and Kitchenette.

Among the startups that are bold enough to YFood has been hosting monthly foodtech meetups manufacture a new food product from scratch, many for several years now and also organises London Food are being spurred on by the challenges in our food Tech Week, while the FoodTalk Awards was recently supply chain. The UK throws away £13bn worth of launched to recognise the sector’s most innovative ideas. food each year, according to the Waste and Resources As for investment, many startups have found success Action Programme – despite the fact that food prices with crowdfunding initiatives and Crowdfooding, a are skyrocketing and many people are grappling crowdfunding platform for food and drink ventures, with food insecurity. Everyone wants to eat well but 60

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there are some serious concerns about how to achieve this as the global population swells. So serious is the situation that Eric Schmidt, executive director of Alphabet, Google’s parent company, believes that developing new plant-based protein sources is a more important tech trend than autonomous cars or virtual reality. As a result, several startups with a strong sustainability mission have emerged that are tackling food waste or finding alternative sources of protein. “We started our business on the back of the fact that by 2050, there will be nine billion people on the planet to feed but major problems in the food production system,” says Neil Whippey, co-founder of Eat Grub, the startup that’s produced a high-protein energy bar out of insect powder. In its attempt to address the problems of food insecurity, the company is trying to win the West over to the idea of insects as a snack.

But the likes of Eat Grub and Huel are hardly high-tech examples, as their founders are quick to point out. Both Whippey and Hearn believe that there’s nothing revolutionary about turning food into powder or eating insects: they’re just using modern science and inventive techniques to combine ingredients in a way that’s appetising. In fact, Britain’s food is still pretty lowtech – though this could change. “The techies haven’t understood the opportunities of partnering up with the foodies yet,” says Alessio Dantino, co-founder of Crowdfooding. “Before we see companies totally re-imagining the way food is produced and building it up to a global scale, we need to get the techies excited about sorting out some of the biggest issues affecting our food system. They need to see the gaps that technology can fill.”

Clearly there are opportunities for tech and food to collide more in the future but it’s still very early days for foodtech as a recognised sector. And this means investment so far has tended to come from crowdfunding campaigns. This is partly because many of the startups looking for support are consumerfacing: everyone eats and can get excited about a new food product – especially if it has ecocredentials. But it’s also because VCs have been slow to consider food as a potential investment area. “There is no mature foodtech ecosystem yet, so there are not as many VCs specialising in it,” says Dantino. “That’s why entrepreneurs tend to look to crowdfunding when it comes to raising funds and validating their concept.”

Foodtech isn’t going to be flying under the radar of VCs for long though. When El Hadery started organising meetups for the sector’s players around five years ago, she went knocking on the doors of investors but it was Alessio Dantino, Crowdfooding “so far off their radar it was unreal”. These days, they come to her and she speaks to two or three investors a day.

The techies haven’t understood the opportunities of partnering up with the foodies yet

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F oodte c h

One VC who’s excited about foodtech’s potential is Christopher Persson, general partner at RECAPEX, the company that helps digital companies scale and that funded Winnow. “As humans, billions of us eat several times a day and there’s an enormous amount of overproduction and wastage,” Persson says. “If a startup can use technology to produce more food more efficiently, there will be opportunities for investment around that.” However, he does acknowledge that many VCs have restrictions when it comes to building their portfolio and the type of company they can invest in.

And given that foodtech is in its infancy when compared to the likes of fintech, it may currently fall outside their remit. What’s more, entrepreneurs may not be asking for enough to make it worthwhile for VCs. “There are many exciting ideas but they’re not always on the right scale,” Persson adds. “VCs are probably waiting for the really big ideas that require a large investment.”

But while high-tech food might be whetting the appetites of investors, will the general public be able to stomach it? According to a study

by British Social Attitudes, 69% of people say it matters to them that their food hasn’t gone through a lot of processing. And whether it’s genetically modified beef or those Thanet Earth tomatoes, there’s a

tendency among the media as well as consumers to label ingredients that have benefitted from technology as ‘Frankenfood’. The horse-meat scandal didn’t do much to boost trust in food producers either. For Huel’s Hearn though, the public’s assertion that they want to eat food in its natural state doesn’t necessarily correspond with what they’re buying. “The term foodtech might be off-putting for some people because they may assume that technology means it’s not natural,” he says. “But at the same time, people are still eating a lot of processed food: go into any supermarket and the fruit and veg section is usually one of the smaller ones. They’re largely eating processed crisps, sandwiches and chocolate bars.” So it may be that consumers are willing to accept processed food, as long as they can understand and trust it.

Thankfully, technology might just have thrown up a solution that could overcome these trust issues.

Proponents of blockchain say it could reliably trace the history of ingredients using a decentralised ledger system that’s highly difficult to alter once an entry has been made. People will be able to see exactly who’s been involved in the production of their meals, from the farmer who planted the seed to the people who processed, stored and sold the end product. This is one of the areas that’s most exciting for YFood’s El Hadery.

“Food-delivery entrepreneurs spotted a massive gap in the market years ago and that’s starting to happen in other areas,” she says. “Entrepreneurs are pushing the boundaries of what’s possible to make food more accessible and make the entire system more transparent. People are switched on about what they eat now and they want to know the journey their food’s taken before it’s reached their table.”

French lawyer, politician and gastronome Jean Anthelme Brillat-Savarin famously said “tell me what you eat and I shall tell you what you are”. And judging by the innovation taking place throughout the food production system, it might not be long until what’s on our plate more accurately reflects the way we’re embracing technology in every other part of our lives.

If a startup can use technology to produce more food more efficiently, there will be opportunities for investment around that Christopher Persson, RECAPEX

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Co m pa ny c ulture

Crafting a culture A business is the sum of its parts. But Ensuring those parts are embracing the same values and forming a positive culture is more art than science BY maria barr

A

company’s culture can be hard to define. It can entail anything from how people speak to their colleagues and how conflict is dealt with to how late people stay in the office and how much collaboration versus competition there is. But it’s also interlinked with what the company stands for. For many entrepreneurs, it’s important that they’re able to look at their company as it grows and know that it’s reflective of their personality and mission. But to what extent can you engineer your culture – and can you hire your way out of a toxic one?

Whether it’s Facebook bringing the world closer together or Airbnb helping people belong anywhere, some of the world’s most successful startups have a strong sense of what they stand for and it’s important that their employees feel the same. This is particularly true for startups with a strong social purpose like OLIO, the app that connects people who either want to receive or give away surplus food. “Aligning with

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our values is mission critical for us and it’s the first thing we recruit for,” says Tessa Cook, the company’s cofounder. “If somebody didn’t care about sustainability, that would be a problem.”

And as well as expecting staff to believe in what the company believes in, some startups are paying attention to personality types too. “The Bumble employee has a certain je ne sais quoi: an energy and a lust for life,” says Louise Troen, director of global marketing and communications at Bumble, the dating app where women make the first move. “Everyone is creative, passionate and so supportive of each other. There’s no mathematical formula at play but having hired people who had the required skill set but didn’t have the right personality type, we know what we’re looking for.” Bumble isn’t afraid to be forthright about who they’re looking for either. “So many companies are worried about being accused of discriminating against people based on personality but the truth is that there are some people who just wouldn’t feel as comfortable in our environment,” Troen adds.

To screen candidates for culture, startups have a range of options. At Bumble, Troen likens the process to going on a date. “Knowing you’ve found the right person for the job is very much like that feeling you get when you meet someone on a date and you just know whether they’re a good fit or not,” she says. “Of course we don’t base everything on personality but we do hire instinctively: people should have a magic about them when they walk into the room.” At OLIO, meanwhile, Cook has a favourite litmus test to help her assess people. “When someone’s really passionate, we find that they can’t help but share some sort of personal anecdote about why they care about food waste,” she reveals. Conversely, all potential employees of Gousto, the recipe-kit startup, sit through a separate, face-to-face culture interview with people from a range of teams. But for Richard Watts, director of People Make it Work, the change-management consultancy, interviews should be accompanied by simulations of situations they might encounter. He also advocates asking evidence-based questions so people don’t just tell you what you want to hear. It sounds time-consuming but he explains it’s worth the effort. “It’s easy to hire fast when you’re under pressure but these are the people who you’re building a business with, so take your time,” he says.

Culture doesn’t form magically though – however cleverly you hire. It usually stems from the company’s founders and their leadership team.

People should have a magic about them when they walk into the room Louise Troen, Bumble

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“I’ve built the business from the ground up, which means I’ve played a huge role in determining Gousto’s culture,” says Timo Boldt, the startup’s founder.

“Creating a respectful and open culture has always been important to me and I rely heavily on my team to preserve and enhance what makes us unique.” While the company’s employees don’t need to be foodies, they do need to show an ability to think very big and be curious – traits Boldt demonstrates himself.

So it stands to reason that when a company culture becomes muddied, change has to come from the top down.

“If you just paper over the cracks you won’t see fundamental change,” says Watts. “But when you get rid of the expensive jet or change the leadership team, these sorts of totemic shifts change the story and therefore the behaviour of people in the company.”

Uber, the ride-hailing app, is certainly hoping that its recent changes will help shift the direction of its story, which has been unrelentingly negative in recent months. Not only has it hired Bozoma Saint John as its chief brand officer but founder Travis Kalanick finally resigned in the face of investor pressure – though he’ll still stay on the company’s board.

However, as a startup grows its head count, steering the culture in the right direction can start to become a challenge – even when the leadership is strong. “In this day and age, it’s unforgivable for organisations to not describe what they care about and what their mission is,” says Watts.

Rather than allowing their culture to be something intangible, companies are enshrining them more formally. Netflix has even published an online guide to its culture that’s over 4,000 words that details its “people over process” philosophy and the kind of behaviour its employees should demonstrate.

The benefit of being clear about what it’s like to work at your startup is that people who agree with your approach will be naturally drawn to you. Bumble and OLIO, for example, find that most 68

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If you just paper over the cracks you won’t see fundamental change Richard Watts, People Make it Work

of their candidates apply after coming across the brand at events or on social media and connecting with its principles.

But the danger of hiring for culture and having a strong sense of the type of person you’re looking for is that you could end up with a homogenous workforce. When an entrepreneur starts to grow the business and – often reluctantly – lets go of certain tasks, the tendency can be to fill the office with people in their own likeness. But this bias, even if it’s unconscious and well-intentioned, isn’t exactly a recipe for diversity. “Founders should be thinking about which disciplines they’re less good at and then looking for people who are loads better in those areas,” Watts concludes.

“Startups thrive when they have a range of opinions so they should seek out people who are the diametrical opposite of those they already have. When you start getting groupthink, you’re in dangerous territory.”

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Deat h & t ec h

All that makes us human continues A new wave of startups is helping us plan for the end of our lives, mourn those we’ve lost and form a more positive relationship with death

BY JOSH RUSSELL

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eath might not be the first sector one thinks of when discussing dynamic and disruptive startups. “Even some of my friends who are very successful entrepreneurs, when I tell them about the death industry they just look at me like I’m crazy,” says Ian Strang, founder and CEO of Funeralbooker, the comparison site for funeral services. “It’s just a place some people don’t want to go.” However, given that market analysts IBISworld peg the UK funeral sector as being worth £1.7bn annually, it’s hardly surprising that the industry is drawing increasing interest from intrepid innovators who realise it’s ripe for disruption. “In the same way that down the tube lines, each stop becomes gentrified one after another, they naturally think: ‘we’ve done everything to do with our social lives, now we’ve done healthcare: the next step is death’,” he says.

“It’s the inevitable end of the line, the last place to get gentrified by the digital revolution.”

But it isn’t just that death is the new Peckham, a trendy borough on the upswing that’s attracting the attention of crowds of tech-obsessives and cold-brew-swilling creatives. In fact, the increasing number of startups providing services around death and mourning may be symptomatic of a much deeper cultural shift. “People are recognising that it is part of the human experience to contend with mortality and experience loss,” says Suelin Chen, co-founder and CEO of Cake, the platform for establishing and sharing your end-of-life preferences. “There is increasingly a desire in the general public to wrestle with this topic, think about it and reflect on it.” And in an age where those most likely to be affected by death are becoming increasingly tech-savvy, it is perhaps inevitable that consumers are starting to seek out apps and services that help them prepare for and make sense of their own mortality. “It touches everybody,” she says.

“Tech natives are now getting to the ages where they’re really starting to think about death and now even older people can be very tech fluent.”

According to research by Dying Matters, the coalition set up by the National Council for Palliative Care, only 35% of people have a will and just 5% have set out their preferences for end-oflife care. In light of this, it was perhaps inevitable that planning would be one of the key areas that has seen an influx of startups eager to help people prepare for their own passing. “The current way people plan is really hard and painful: technology can make it easier,” Chen says. Not only can innovations like Cake’s guide users through the many difficult end-of-life decisions they may need

to make – whether that’s how they would like to be cared for or the planning of their funeral – but it has the added benefit of making it easy for users to convey their wishes to their loved ones, no matter how far away they may be. “Given that a lot of us are not geographically co-located with the people we care about, technology offers a great way to communicate your wishes,” says Chen.

However, technology doesn’t just stand to make things easier those of us planning for the future: it can also give those grieving some much needed clarity when attempting to make funeral arrangements. “There was research that came out from the Office of Fair Trading that said 92% of people buy from the first funeral director they visit,” says Strang. “They’re in a bereaved state and don’t feel able to negotiate.” By offering grieving relatives the chance to directly compare the prices and plans of funeral directors, Funeralbooker allows them to make sure they’re getting the right deal for them.

But, in Strang’s eyes, there are plenty of other ways that startups could help simplify funeral planning to take pressure off those mourning. “There’s a definite opportunity there for technology providers to provide funeral directors with better tools, whether that’s improved ways of informing the family or crowdfunding the funeral,” he says.

Unfortunately, mourning doesn’t simply end with the funeral and it can take a long while for people to process their grief. But, even here, there is an opportunity for startups to make things easier for the bereaved and help them heal. “When you’re in JULY 2017 ELITEBUSINESSMAGAZINE.CO.UK

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that situation, you’re certainly not alone: there are many people who are experiencing similar things,” says Chen. “Technology can help people connect to others who are grieving, be inspired by their stories and be more public about their own bereavement.”

And startups aren’t just facilitating conversations between those left behind. As more and more of our lives and identities play out online, an enduring record of who we are and the things we’ve experienced are being created and this is allowing tech brands like Facebook to offer public memorials to act as a digital focal point for people’s grief. “Traditionally you had stone grave markers because they lasted a really long time but now traces of us on the internet are what is going to persist long after we’ve passed,” she says.

But with such a wealth of data available and the kind of technologies produced by startups evolving at a remarkable rate, it seems unlikely this will be the only advance in the way we remember the dead – as the story of Eugenia

so fundamental to who we are as humans to the control of software. “It’s very human and potentially evolutionary to have a squeamishness around death,” says Chen. “That’s pretty natural.”

While there does seem to be an eagerness among the general public to embrace the role technology can play in helping us plan for and process death, she urges startups not to think they can rush in with a wrecking ball and start demolishing too many of the taboos and traditions that surround death. “You have to walk a fine line in terms of tone and sensitivity,” she says. “Companies have a responsibility to be tactful and to be mindful of the emotional challenges of this space.”

However, that’s not to say that startups operating in this sector can only ever approach the subject with total sombreness and solemnity.

Funeralbooker knows this better than anyone: for April Fool’s Day this year, the startup ran a spoof ad for the CremMate, a portable cremator designed for home cremations. “It got a huge amount of traction: it got 20,000 views in a day and was covered by the Telegraph,” says Strang. “They did call it the darkest April Fools of the year but they covered and enjoyed it.” And while some within the company were a little jittery about poking fun around the subject of death, the founder correctly anticipated that the public wouldn’t mind the tongue-in-cheek ad.

And ultimately this is one of the key benefits of introducing a touch of tech into people’s relationships with death. “Technology can destigmatise the conversation and reposition our relationship with death,” says Chen. By putting apps and services into the palm of their hands, startups in the sector are helping people regain some control over one of life’s greatest unknowns and turn something traditionally seen as a time for sadness into something much more positive. “There’s a long tradition in many cultures of relating to death and mortality as a positive motivating factor and that can be really powerful,” she says. “Technology is already helping to cultivate a deep appreciation for the time that we have and having that kind of mindset will definitely benefit everybody.”

There’s a definite opportunity there for technology providers to provide funeral directors with better tools Ian Strang, Funeralbooker

Kuyda, co-founder and and CEO of Luka, the AI startup, demonstrates. When her close friend and fellow entrepreneur Roman Mazurenko was killed in a traffic collision, she and her team of engineers fed old text messages into a neural network to produce an AI that could convincingly reproduce his speech patterns and enable those mourning him to speak to him once again. While perhaps the first thing that will strike many about this is the uncanny resemblance it bears to an episode of science-fiction anthology series Black Mirror, the most fascinating part of Kuyda’s experiment was how many of those interacting with the bot seemed to benefit from having some way of expressing and externalising their grief.

Not everyone may be as comfortable with technology coming to play such a significant role in the mourning process and some consumers might feel uncomfortable about ceding something 72

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09/01/2017 15:23

Dr o ne l aw s

Not above the law

BY Eric Johansson

74

Drones have opened up an abundance of opportunities for startups. But entrepreneurs better familiarise themselves with the law or risk seeing their profits crash to the ground

F

rom mapping radioactivity to helping farmers keep track of their crops, the startup sector has found numerous uses for drones over the last few years. And given that new enterprises and established companies alike are trialling unmanned deliveries, we better get used to drones whooshing about above us.

But before budding business owners launch high-flying companies, they better familiarise themselves with British aviation laws because breaking them could have severe consequences.

“You could be subject to investigations, fines and prison sentences,” says Jonathan Nicholson, assistant director of communications at the Civil Aviation Authority (CAA), the statutory corporation overseeing and regulating civil aviation in the UK. “If you’ve endangered an aircraft, you could ultimately go to prison for five years.” Additionally, there’s also a risk that insurance companies won’t pay up if you’ve caused an accident while flying unlawfully.

Given the risks attached to flying drones, it’s hardly surprising that the first thing any entrepreneur using drones in their business needs is training. “Commercial users – as in anyone knowingly making money out of their drones – need to be commercially approved,” says Nicholson. To acquire a license, operators must go through a course at one of the CAA-approved

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assessment organisations. Usually this means familiarising yourself with the law and having both your practical and theoretical knowledge tested. “But we do see some people who try to offer their services to companies without having gone through the course,” he says. “That is illegal and puts both parties at risk in terms of insurance and liability.”

And the training is important, as the Aviation Navigation Order, the legislation regulating all air traffic above these shores, isn’t always that easy to follow. “It’s written by lawyers and isn’t something the average person on the street would look at and understand,” says Nicholson.

Recognising the need to clarify the legislation prompted the CAA to put together The Drone Code, an easy to follow guide for civilian drone pilots. And the document was sorely needed.

“We saw a lot of incidents where pilots reported how drones came too close to their aircrafts,” says Nicholson. “We want people to fly safely but at the same time we don’t want the amazing things drones can do to be prevented just because some people fly badly.” Following the code will protect yourself, your business and others from serious harm.

Whether or not you’re flying an unmanned aerial vehicle (UAV) for recreational reasons or in an attempt to turn a profit, the drone must always be in your line of sight. While the CAA recommends that a drone is not further away than 400 feet from the pilot, this is not a hard and fast rule. “If you’re flying an absolutely huge drone you can obviously see it from further away than if you are flying a tiny one,” says Nicholson. “And it also depends on things like the weather and how good your eyesight is.” That being said, it’s not enough to simply see the UAV. “It’s no good to say ‘I think that speck in the distance is my drone,’” he says. “You have to be close enough to have depth and height perception so you can avoid other things that may appear in the air.”

The rule that the pilot must always see the aircraft is also the main obstacle to overcome for companies

looking to launch full-scale aerial deliveries.

“At the moment there is nothing approved that enables drones to see everything around them and automatically avoid them,” says Nicholson.

So while companies like Amazon and Domino’s Pizza are experimenting with using the tech, these trials are heavily regulated and depend on the corporations’ ability to prove that they can conduct them without risking the safety of others. In other words, people won’t be able to order New Yorker pizzas or smart speakers any time soon. “The solutions are being developed and are probably not a million miles away but nothing has been approved just yet,” Nicholson says.

However, keeping a clear line of sight between yourself and the drone isn’t the only rule entrepreneurs must be aware of. The law also explicitly points out that no drone is allowed to drop an animal or anything else, not even if it is attached to a parachute. Asked whether or not there are a lot of unmanned vehicles making it rain cats and dogs, Nicholson laughs and replies in the negative. “You’re not allowed to drop anything,” he says. “It’s purely a safety thing.”

Finally, there are areas that drone pilots should avoid unless they have special permission. “Some areas of airspace are shut down to even the smallest drones,” says Nicholson.

For starters, drones aren’t allowed to fly closer than 50 metres to crowds or 150 metres to individual people and properties. And you must also steer clear of places like prisons, nuclear sites and airfields unless you’ve got special permission from the owner of the establishment.

The UK is hardly the only country to take this seriously: three people were arrested back in 2014 for having flown their drones over a French nuclear power plan.

Given the severe sanctions unlawful activities can incur, familiarising oneself with the law should be the first step before launching a drone company if you want its profits to soar.

If you’ve endangered an aircraft you could ultimately go to prison for five years Jonathan Nicholson, the Civil Aviation Authority

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10/07/2017 18:07

B U SI NESS S U PPO RT S ECTI ON

Warehousing fulfilment & Distribution At our modern purpose built warehousing facility in Sussex we offer highly flexible warehouse services to provide a cheaper storage solution for your business.

Find out more about our services:

01903 736300 info@rtpage.co.uk www.rtpage.co.uk

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BUS IN ESS SUP P ORT SE C TI ON

No wifi? No problem.

(The perks of sharing access to the cloud with your accountant)

Cloud accounting software is driving the future of business; its facilitating the streamlining of operations, enabling the sharing data in real-time and creating accessible business insights.

powered by software, delivered by people

hello@myconfidant.co.uk

We build and maintain websites and online stores and help brands with their digital marketing needs

We create websites that are engaging, simple to navigate and have SEO (search engine optimisation) as a cornerstone of the build. We design a variety of websites from simple brochure website to full blown eCommerce solutions and large dynamic websites built on CMS platforms.

0124 567 3690 | hello@webwax.co.uk

www.webwax.co.uk

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Web Design Ecommerce Email Marketing Google Adwords Web Hosting Social Media

10/07/2017 18:07

Luxury lifestyle meets adventure Created for the discerning and sophisticated individual, Verve combines luxury travel & lifestyle experiences that include driving Supercars/GTs across Europe.

Upcoming rallies: • 9 - 17 Sep 2017 • European Adventure in 6 countries (9D / 8N) • 2018 routes to be released soon. Register for updates.

“

Verve Rally is the closest you’ll get to living your dream

”

Elite Business Special - All new rally registrations that mention Elite Business to receive a Verve Rally Champagne Hamper.

Go to ververally.com or call us on 0203 808 8488. * Supercar/GT hire packages also available.

EliteBusiness0717.indd 1

03/07/2017 09:21

BUS IN ESS S UPPO RT SE C TI ON

Complete credit management, securing trade for SMEs EW

N

Introducing Single Invoice Insurance

reinventing trade credit protection for SMEs Real-time cashflow forecasting and risk analysis Free credit reports on your customers

Single invoice to whole turnover protection

Automated late payment chasing and debt collection Too often small businesses are left at the back of the queue and vulnerable to bad debt. Single invoice insurance breaks down the barriers of traditional trade credit insurance. There are no credit limits, long term commitments or fixed fees.

Simple pay as you trade protection to give you piece of mind.

To find out more about complete credit management, visit nimbla.com today.

Nimbla is a trading name of TradeCrediTech Limited which is an appointed representative of Ambant Underwriting Services Limited (for general insurance intermediary business), a company authorised and regulated by the Financial Conduct Authority under firm reference number 597301 to carry on insurance mediation activities. TradeCrediTech Limited is registered in England and Wales company number 10211946. Registered office at Aldgate Tower, 2 Leman Street, London, E1 8FA

Annual Subscription

£250.00 plus VAT

vatman tech online VAT services vatman tech is a convenient new solution for the accounting profession.

Our ethos is technical excellence and compliance and we can provide the best quality VAT advice and support on a cost effective digital basis.

In addition, we can deal with any VAT issues you may have ranging from general consultancy through to complex international or land and property projects or disputes with HMRC including assessments, penalties and appeals (fixed fee quotations).

We also provide a range of VAT training courses, e-guides and software.

Contact Martin Kaney on 0131-306-0075 or at mkaney@x-vat.com for more details.

www.x-vat.com

A 12 month vatman tech subscription includes*: • unlimited email queries • unlimited telephone queries • VAT Advice • Technical Support • VAT Updates • VAT Alerts * T&Cs apply - see website for more details.

The stats that matter – and some that don’t

76% of UK CEOs believe cyber risks to be a significant threat in 2017

$77bn is how much the world’s 22 fintech unicorns are worth

£800

is how much your medical record is worth on the dark web

67% of UK businesses have spent money on their cybersecurity in the last 12 months

27% 55% 16.5% 13% of employees at VC firms are women

of employees have been asked to clean their place of work

of workers are unhappy due to the condition of workplace toilets

of decision makers at VC firms are women

47% 74%

of employees snack at work and don’t tell their partners

6% 13 10 is how much some of Britain’s biggest brands were devalued by because of Brexit

82

working hours per employee are lost to cleaning each year

years since the iPhone was launched

of employees indulge in secret snacking each week

Sources: Association of Plumbing & Heating Contractors Reveals, Brand Finance, CB Insights, Diversity VC, Furniture123.co.uk, IronmongeryDirect, Keeper Security, rebootonline.com, PwC.

THE CRUNCH

ELITEBUSINESSMAGAZINE.CO.UK JULY 2017

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10/07/2017 19:15

BE A GREAT BIG BRAND STRAWBERRY

GET PICKED 10% OFF

YOUR FIRST PRINT & DESIGN ORDER | CODE: CESUMMER17

VISIT: SAVEONMYPRINTING.COM

We’re all in business to attract attention and get picked.

Right? The trick is making sure it’s us that customers want to pick. And that’s where branding comes in.

Printing.com FP strawberry.indd 1

10/07/2017 15:36

A business credit score is more than just a number Unlock your financial potential with Experian credit insights

Find out your business credit score, and the scores of your customers and suppliers, helping you to: • Gain easier access to finance and secure preferential credit terms with suppliers • Remain competitive in a tender process and boost your chances of winning new business • Qualify customers, suppliers and contractors, by assessing their credit score Start understanding the scores that affect your business by credit checking any business today!

Start your free* trial! www.experian.co.uk/checkabusiness * For your own business report, a monthly fee applies after the 30 day free trial.

You may cancel during the free trial without charge.

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10/07/2017 17:59