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COOKING UP A STORM From an inauspicious start flogging recipes at a Shoreditch antiques market, Timo Boldt has grown Gousto into a thriving recipe-kit startup with personalisation at its core

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Building the recipe-box business tickling the nation’s tastebuds



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30 54 issue 41 january 17

REGULARS 09 10 15 82

From the editor Upfront The big idea The crunch

columns 17 Jacqueline Gold 27 Mark Pearson 29 Alice Bentinck




indicators paint a picture of the future in these turbulent times?

supporting female entrepreneurship

Collecting clues Can economic

Backing women Meet the trailblazers



A wave of new proptech startups is disrupting the property market

Innovative Israel Uncovering what’s

We need to talk about chatbots

making the country’s startups a smash

Potential marketing star or PR disaster in the making?




a passion for reducing food waste into a sustainable startup

fitness technologies save Britain from its obesity crisis?

shares in your startup with the blessing of your investors

Going all in Ilana Taub is turning

fighting Fit Will the slew of new

The end of estate agents

AHow problem shared to authorise new JANUARY 2017 ELITEBUSINESSMAGAZINE.CO.UK

Contents.indd 2


09/01/2017 17:28

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FROM THE EDITOR EDITORIAL Josh Russell – Editor Maria Barr – Web Editor Eric Johansson – Feature Writer DESIGN/PRODUCTION Leona Connor – Head Designer Jenny Allen – Junior Designer Dan Lecount – Web Development Manager SALES Gemma Campion – Sales Manager MARKETING David Thomas – Group Marketing Manager CIRCULATION Paul Kirby – Circulation & Data Manager ACCOUNTS Sally Stoker – Finance Manager Colin Munday – Management Accountant ADMINISTRATION Laura Hyde – Administrator DIRECTOR Scott English – Managing Director Circulation/subscription UK £18, Europe £38, Rest of World £60 Elite Business Magazine is published four times a year by CE Media Solutions Limited, 4th Floor, Victoria House, Victoria Road, Chelmsford, CM1 1JR 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 Limited cannot be held responsible for such variation.

Recipe for success Perhaps the factor I admire most about entrepreneurs is that they remain imperturbable, even in the face of long odds. This is something that seems to unite all founders, whether they sit at the helm of a plucky one-man-band or a scaleup with 200 employees and offices on multiple continents. Leaf through these pages and you’ll find plenty of evidence of this. Whether it’s intrepid founders remaining fearless in the face of negative economic indicators, Israeli entrepreneurs exhibiting considerable chutzpah to create world-beating cybersecurity solutions or sustainable startups sticking to their ethical guns,

entrepreneurs are never shy of showing their true mettle. Take this month’s cover star Timo Boldt: when building the recipekit startup Gousto, he showed his gumption time and time again, whether that was walking away from a deal on Dragons’ Den or studying for an executive MBA whilst running his business full-time. Thanks to this fearlessness, Gousto has seen its revenue grow 240% over the last three years. Fortune clearly favours the brave.

Josh Russell - Editor


Emilie Sandy Super snapper Sandy is back with us this issue, this time capturing photos of our cover star Gousto’s Timo Boldt.

Jacqueline Gold The Ann Summers chief executive is no pushover but she believes to make it in business you can be both assertive and respectful.

Alice Bentinck Bentinck is looking ahead to an AI-powered landscape and asking what skills we’ll need to start nurturing for Industry 4.0.

Mark Pearson This avid supporter of early-stage tech startups believes entrepreneurs should be picky when choosing their funder.


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09/01/2017 19:05

DOING THE ROUNDS The investment rounds that rocked the startup community last quarter


$70m Series C The online marketplace for engineering talent has now acquired over $100m worth of investment. With that kind of money in the bank, this recruitment startup is ready to turn up the heat.


£30m Series C The digital portfoliomanagement startup successfully secured one of the highest rounds for a British fintech startup since Brexit.

Up, up and away From introducing dash buttons that bring an order to your door with a simple push to launching grocery shops without checkouts, Amazon is certainly no stranger to turning the traditional shopping experience on its head. And now the online retail platform has reached another milestone by completing its first commercial drone delivery in the UK. This aerial accomplishment was conducted in Cambridge within 13 minutes of the order being placed. It was part of a trial to test the new delivery system, dubbed Amazon Air, which aims to land at the doors of customers within 30 minutes of them ordering products weighing up to 2.7kg. Amazon aspires to do more


$30m Series A With the startup’s first huge funding round, it now aims to use the money to make machine learning faster, easier and smarter.


£21m Series C Having closed its latest round, this fintech startup offering SMEs loans has raised a total of £46m. Good news for all startups, in other words.

Great expectations British SMEs are expecting bigger revenues in 2017


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drone deliveries for its customers in the upcoming months. Given that other companies have launched similar schemes in recent months, the answer to whether it’s Amazon or a competitor that first makes drones part of a shopper’s regular experience is still up in the air.

Despite the fears of a financial downturn due to the Brexit vote, it seems as if UK SMEs are feeling positive about the future. Having surveyed over 1,000 SMEs across the country in the fourth quarter, Capital Economics, the financial forecasting firm, revealed that small businesses on average expect to grow their revenue by 1.8% and their staff by 0.8% in 2017. That’s up from their third-quarter predictions when those figures were at 1.5% and 0.7% respectively. Additionally, 28% of SMEs expect their business conditions to improve, 54% expected them to remain the same and 18% thought they’d worsen. Let’s keep our fingers crossed for a happy new year.


09/01/2017 17:21

UPFRONT Hacking terror frightens businesses

Coming up January 12 Introbiz Networking Event at the Vale Resort Hensol Park, Hensol, CF72 8JY

Cybersecurity insurance claims up in 2016 Ask Marissa Mayer, CEO at Yahoo, about the need for strong firewalls and she may respond in less than kind words. However, the tech giant isn’t the only company to have suffered at the hands of hackers recently. CFC Underwriting, an insurance firm, has revealed that the claims on its cybersecurity policies rose by 78% in 2016 compared to 2015. By mid-December, the company had already handled over 400 claims on breaches. Some 31% of claims were linked to data theft, followed by the 22% that were related to theft of

Literary Corner

either liquid currency or funds from banks. The third most common type of breach was connected to the use of ransomware, constituting 16% of insurance claims. And this is no small problem. British businesses lost over £1bn to cybercrime, according to ActionFraud, the national cybercrime reporting centre. With breaches on the rise, here’s hoping Britain’s cybersecurity firms can hack the pace.

by Klaus Schwab

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The Fourth Industrial Revolution The future hasn’t arrived yet but it’s certainly under construction. From voice-activated smart-home assistants to designer babies born without genetic propensities for certain diseases, it’s clear that the times they are a-changing. The Fourth Industrial Revolution is a bid made by the founder and executive chairman of the World Economic Forum to make sense of what these leaps in innovation really mean for startups, societies and citizens. While the prose occasionally reads like a dry science report, Schwab paints a future that sometimes seems like an episode of the dystopian TV show Black Mirror. Already technology has

January 18 Champagne breakfast in Trafalgar Square Connections at Trafalgar Square, 8 Northumberland Avenue, London, WC2N 5BY

enabled the military to fight wars 1,000 miles away with drones, hackers to take control of your smart home using the internet of things and could potentially enable terrorists to design biochemical weapons of massdestruction in the future. So it’s easy to understand why Schwab urges world leaders to ensure these scientific triumphs are used responsibly. If done properly, he argues that technological achievements can herald the coming of true global society and raise the standard of living for everyone. A must-read for any entrepreneur remotely interested in what’s to come.

January 26 UK Spectrum Policy Forum Plenary Meeting techUK, 10 St Bride St, London, EC4A 4AD March 16 Fintech:CODE Novotel London West, 1 Shortlands, London, W6 8DR March 10 - 12 Startup Weekend University of Derby, Kedleston Road, Derby, DE22 1GB A full event listing is available on our website: events


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For many SMEs, crowdfunding is one of the few realistic and viable ways to acquire capital. My hope is that the industry will be allowed to continue without any major alterations. One of the concerns the FCA has is that many investors don’t fully understand the risks of crowdfunding, so perhaps platforms could be forced to make risk warnings more prevalent. But in my mind, they’re already very clear. Most crowdfunding users only invest small amounts and the more serious investors fully understand the risks. Jean Salha, CEO, Teneno

Cracking down on crowdfunding Does the peer-to-peer lending market need to be more heavily regulated or should what’s been a valuable investment pipeline for many businesses be left well alone? After spending six months looking at the state of crowdfunding in Britain, The Financial Conduct Authority (FCA) has some concerns about how easy it is to assess the risks of investing on a platform and the presence of misleading financial promotions. The regulators have put forward several new rules for discussion in the next few months. But given how many British businesses have started life or grown thanks to crowdfunding, what does the startup community make of the prospect of a shakeup?

Far from being a crackdown on crowdfunding, it’s clear that as the sector matures the FCA wants to see crowdfunding thrive – but within a more effective regulatory framework. After all, crowdfunding has facilitated billions of pounds of investment and created thousands of jobs. I also agree with the UK Crowd Funding Association’s position that the FCA needs to acknowledge that Britain’s crowdfunding industry is already well-regulated. In some cases, the current regulation exceeds EU requirements and is more stringent than for other forms of direct investment. Luke Lang, co-founder, Crowdcube


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The FCA’s proposed crackdown is the inevitable effect of the rapid growth crowdfunding has had in the last few years. But I actually think it could protect the industry in the long term, which is in the interest of the startup community. You have to remember that crowdfunding is still in its infancy and early investors have yet to find out whether their crowdfunded portfolio will pay off or not. Without regulation, there’s a chance crowdfunding could get a bad name and fall out of favour. Michael Howe, founding partner, Campus Capital

The FCA’s moves to bring equity crowdfunding and peer-to-peer lending more in line with mainstream regulation are to be welcomed. While light touch supervision was sensible during the very early stages of these industries, these platforms are now soliciting billions of pounds in investment. Problems that need to be resolved include frequent conflicts of interest and the opacity of product details for debtbased peer-to-peer offerings. But it is encouraging to see the FCA acting now to prevent any future problems that could damage the industry. Adam Tavener, chairman, Alternative Business Funding


09/01/2017 17:22

UPFRONT For your aural pleasure Facebook launches a new audio product for podcast lovers

The taxman is knocking on the door UK businesses owe £1.8bn in late corporation tax Cashflow is often cited as one of the major concerns for startups and SMEs. It can only take a few late payments or delayed orders to turn bank balances red and it seems that some cash-strapped businesses have been struggling to pay their corporation tax lately. According to Funding Options, the

Thanks in part to blockbuster hits like Sarah Koenig’s Serial, podcasting has well and truly entered the mainstream. And Facebook plans to capitalise on the popularity of the spoken word by announcing Live Audio: a feature that will allow media owners to share audio content with Facebook users. Live Audio is being soft-launched and for now only a select group of publishers – including the BBC and Harper Collins – will be able to use it. But the move does point to the fact that even in a world seemingly dominated by the power of the visual, Facebook believes that simply listening can be just as engaging.

What’s the word?

“Good morning, Mark” Jarvis, the AI voiced by Morgan Freeman, greets his creator Mark Zuckerberg

“The government will no longer seek to reach a fiscal surplus in this Parliament”

online business finance supermarket, the value of late corporation tax payments increased by 15% in 2016. The news comes as HMRC is cracking down on late payments – sometimes even employing debt collectors – which means some small businesses unable to access short-term overdrafts could struggle if the UK economy worsens. We’re guessing many SMEs will be hoping Theresa May makes good on her promise to reduce corporation tax sooner rather than later.

Chancellor of the Exchequer Philip Hammond provided a reality check in his autumn statement

“I take responsibility for ballsing up” Chef Michel Roux Jr was apologetic for paying kitchen staff at Le Gavroche less than the minimum wage, promising to boost salaries and cut working hours Find us on Twitter @elitebizmag


Successful crowdfunding campaigns that have closed in the last quarter

Innis & Gunn








4.6`% equity

9.37% equity

11.11% equity

17.89% equity

After smashing its initial £1m target in 72 hours, brewery brand Innis & Gunn extended its Crowdcube campaign, attracting 2012 investors. The Scottish brand has ambitions to expand into England.

HealthUnlocked, which claims to be the third-largest health website in the UK, attracted 157 investors for its venture into crowdfunding on Crowdcube and plans to funnel the money into beefing up its team.

Tech startup Veeqo’s crowdfunding campaign on Seedrs saw the company surpass its initial target, attracting over 200 investors. The capital injection will be funneled into software development and talent.

Global lingerie and nightwear brand Bluebella raised over £1m on Crowdcube from over 600 investors, double its initial target. The latest funding round will go towards an even bigger online marketing push.


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09/01/2017 17:22

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22/12/2016 11:26 12/12/2016 11:54



Smart saving

This fintech startup is betting that AI can help get young people saving. Could they be onto something? BY MARIA BARR


aced with graduate debt, a competitive job market and sky-high house prices, it’s no surprise that many millennials are prioritising short-term gratification over saving for their long-term future. And even those who want to save often end up just scraping by and, according to analysis by Facebook, millennials are 1.6 times more likely than older generations to have no investments at all. Given that generation YOLO also happen to be digital natives – people who grew up with the internet and are more open to adopting new technology – it’s no surprise that many fintech startups have rushed in to offer solutions. One of the most promising is Plum: a personal savings assistant in the form of an AI-enabled chatbot on

Facebook. The bot analyses people’s current accounts and relies on machine learning to get to know their spending habits. For instance, if you’ve got a daily soy latte habit, it will soon find out. It will then calculate a small and safe amount of money people can save, which is then transferred to their Plum savings account. People can chat with it via Facebook Messenger at any time if they want to withdraw money or put aside a different amount, so they’re always in the driving seat. Founded by Alex Michael and Victor Trokoudes, Plum says its goal is to plug the UK’s £350bn savings black hole by helping young people establish a manageable, realistic savings habit. Explaining the concept, Trokoudes said: “Plum’s intelligence sidesteps our pre-programmed human tendencies, ensuring our future selves are looked out for.” Given that Plum received a significant legup in October when it raised $500k in a Seed round led by 500 Startups’ microfund, we’re betting that this is one AI startup we’ll be hearing a lot more of this year.


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Jacqueline gold ceo, ann summers

On being assertive

Jacqueline Gold has learned how to stand her ground and build her confidence, her way


’ve not always been assertive. I was only 21 when I started my career and didn’t have the confidence that comes with age. I remember showing up for a TV interview rocking my power suit – shoulder pads and all – with my hair pinned to the top of my head and glasses perched on the bridge of my nose authoritatively. It was my approximation of what a strong businesswoman looked like but when my friend told me later on she thought I looked just like a politician, I realised I needed to start being myself and drawing on my inner courage. Throughout my career, I’ve encountered many situations where I’ve needed to stand my ground. For instance, when the Dublin Corporation was trying to bully me into not opening a store in the Irish capital or the countless boardroom meetings in the early days where women were in a minority. On one particularly fraught occasion, an executive turned round to me and said ‘your quietness

is unnerving’. It was a strange comment but I took it as a compliment. I’d found a way to put my views across and command the room without having to bang my chest or thump my fists on the table. There have been countless meetings and panel debates where people – including women – have been domineering rather than supportive. Too many women believe they have to emulate men to hold their own in the workplace. But if you disagree with somebody – even if they’re the most powerful person in the room – you shouldn’t be afraid to say so. Be brave. In my boardroom, I want people to – respectfully – disagree with each other so there’s a variety of opinions. Something that’s helped me has been emailing myself a list of all the things I’ve achieved, from the minuscule to the significant. Whenever I thought I might come across a tricky situation or person, I’d pull it out and remind myself of what I’ve achieved. It’s also important to step back and take the emotion out of the equation if things are getting heated. Emotion can be stifling. When I hear of people saying that it’s OK to cry in the office, my first thought is ‘you must be working in the wrong environment if your job is making you cry’. As a leader, I make sure that bad behaviour Too many is never tolerated and while women believe there’s always healthy debate, they have to we never act aggressively with emulate men each other. to hold their Of course these days I rarely own in the come across situations where workplace people try to shout me down – I’ve earned my stripes and bullies generally pick on people who seem more vulnerable. If this happens to you, rise above it, stay true to yourself and remember just how amazing you are. JANUARY 2017 ELITEBUSINESSMAGAZINE.CO.UK

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09/01/2017 17:45

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WHENEVER YOU DISCUSS ISRAEL’S entrepreneurial ecosystem, there’s one phrase that crops up time and time again: the startup nation. First coined by authors Dan Senor and Saul Singer in their book of the same name, not only is this an apposite description of a nation in which, according to government figures, tech accounts for a third of GDP but it also demonstrates just how much entrepreneurialism has become part of the national identity. “There’s a joke in Israel that 30 years ago every Jewish mother’s dream was that their son or daughter would become a lawyer or a doctor,” says Nir Zohar, president and COO of Wix, the cloud-based web-development platform. “Today mums want for their kids to become entrepreneurs.” Given that Israel is something of a startup itself, it’s hardly a surprise that the country has embraced entrepreneurship in this way. After all, it has spent the last 70 years creating something from nothing – often in the face of incredible odds. “In the old days, we were often faced with challenges that were completely asymmetrical,” says Jon Medved, investor, serial entrepreneur and founder and CEO of OurCrowd, the equity crowdfunding platform built for accredited VC investors. “We didn’t have the money, the numbers, the weapons and we had to make that work.” Naturally the enormity of these kinds of challenges has led Israeli entrepreneurs to be far less risk-averse than their contemporaries in startup hubs elsewhere in the world. “In a country like ours, which still faces existential dangers and where people want to completely wipe us off the map, starting a company doesn’t seem like a big deal,” says Medved. “What’s the worst thing that can happen? You fail.”



Is r a el

Certainly this seems to have had a marked input on the character of the kind of founders the country produces. “Israeli entrepreneurs aren’t afraid to tackle things that seem to be impossible,” says Yovav Meydad, vice president of products and marketing at Moovit, the public-transport app and mapping service. “They’re the embodiment of chutzpah.” Without a doubt, the Yiddish word for selfconfidence or audacity epitomises many of the characteristics deemed desirable in an entrepreneur and it’s something many Israeli founders exhibit in spades. “They’re bold, they’re not afraid to say something and they’re not shy,” he says. “Even when I see very successful entrepreneurs from other countries, their behaviour shares very similar characteristics with that of Israelis.” But while temperament is vital in creating a thriving startup hub, it isn’t the only factor: ensuring your startup can find raw technical talent is also key. Despite Israel having a strong education system, it can still be difficult for the country’s startups to source the skills they require. “Access to talent is always tough, especially in a vibrant ecosystem that is [competing] continuously,” says Yift Oron, CEO of LeumiTech, the high-tech finance arm of Bank Leumi, the Israeli bank. And this is set to become an even more intensely contested battleground: with increasing numbers of new businesses founded each year and tech giants like Google and Facebook flocking to cities like Tel Aviv, skilled engineers are in high demand. “There are multiple entities trying to gather the best talent: startups, large local companies, as well as 22

[multinational corporations],” she says. Fortunately Israel has an ace up its sleeve when it comes to training the next generation with these kinds of technical skills: national service. “There’s a very deep and profound relationship between what goes on in the Israeli army and our success in the startup world,” Medved says. Given founders from Israeli startups like Outbrain, Waze, Wix and Check Point all served in Unit 8200, the Israeli Intelligence Corps unit responsible for signal intelligence and code decryption, military service clearly proves an invaluable crucible for imparting technical skills. Additionally, in light of the fact that 10% of conscripts go on to serve as officers for at least five years, many young Israelis also pick up invaluable strategic skills during their national service. “They learn how to be mission driven because in the army lives depend on every decision they make,” he says. “It’s not just an academic exercise.” And considering the sheer number of founders that have passed through the Israeli security services, it’s hardly surprising that the country is proving a dab hand at cybersecurity. “Today 400 of the 1,400 cybersecurity startups in the world are Israeli,” says Medved. But Israel is far from being a one-

trick pony. Not only is the country producing startups in disciplines as diverse as consumer, IoT, fintech and drones but it has also built a rep for tackling the big problems, whether that’s machine learning, robotics, digital health or virtual reality. “These are things that require deep and fundamental technology breakthroughs and that’s moving into our home-court advantage,” he says. An appetite for the innovations Israelis are creating has seen significant quantities of investment pour into the country. According to a report by the IVC Research Center, the research organisation dedicated to analysing Israel’s tech industry, Israeli startups raised $2.8bn of investment in the first half of 2016 alone – a 33% increase from the $2.1bn raised during the same period in 2015. “It’s become easy for professional investors to raise money from the US to build $100m to $300m funds,” says Ronni Zehavi, CEO of hibob, the HR and benefits platform. This means that while Israel was once subject to the same funding gap seen in many entrepreneurial ecosystems, there is now ample capital available throughout a startup’s lifecycle. “You can easily find investors to invest in your startup throughout the seed, A, B and C rounds,” he says.


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09/01/2017 18:50


In a country like ours, which still faces existential dangers, starting a company doesn’t seem like a big deal Jon Medved, OurCrowd

But Israeli startups aren’t just attracting interest from investors: the nation’s businesses are also proving particularly enticing for those looking to buy. The IVC-Meitar Israeli HighTech Exits report revealed that Israel saw $8.8bn in M&A activity in 2016 – which included the whopping $4.4bn acquisition of Playtika in July. Not only do these deals see huge amounts of capital making its way back into the Israeli economy but they also provide a massive source of inspiration for entrepreneurs just starting out on their journey. “They make a huge contribution,” says Zohar. “Thinking ‘I want to be the next Waze and sell my company for $1.1bn to Google’ definitely pushes people to keep on trying.” However, while multi-billion dollar exits undoubtedly enrich the ecosystem, Zohar maintains that too many startups taking the first deal that lands on the table can prevent the growth of more home-grown unicorns. “My belief is that if more companies don’t sell or exit at the startup stage, over time they generate more knowledge and expertise,” he says. “That then creates a spillover effect that’s crucial for the growth of the local tech economy.” Fortunately Israel has seen increasing numbers of startups

that are in it for the long haul: while IPOs have fallen from their $9.8bn peak in 2014, plenty of Israeli businesses like Mobileye and Wix have plumped for an IPO and continued growth rather than an early exit. “It’s supplying another alternative: entrepreneurs are starting to dream of building a billion-dollar company rather than building to an exit,” he says. Regardless of whether they focus on growing at home or look to sell overseas, one thing is certain: Israeli startups are increasingly bringing their services to the world. “In the future, we’re only going to become more and more global,” says Medved. “We’ve gotten away from an obsession with the US: Europe and Asia are now a big part of what we do.” Not only have Israeli startups been seeing vast amounts of interest from Chinese firms and funds – according to the IVC Research Center, Chinese investment in the country’s high-tech hit £500m in 2015 – but Israeli startups are increasingly looking at opportunities throughout the developing world. “Many startups in Silicon Valley look at solving problems for the rich,” says Medved. “Increasingly you’re seeing Israel tackling the problems of the other five billion people on the planet.”

Employing more than 1,400 people across four continents, few are better placed than Wix to illustrate how home-grown Israeli innovators are now taking the world by storm. Founded by brothers Avishai and Nadav Abrahami and their friend Giora Kaplan in 2006, Wix was actually born out of the frustration of trying to build a website for an existing startup they were working on. “The internet had been widely used for more than a decade and yet you still needed a professional in order to put the key building blocks of a website together,” says Nir Zohar, the company’s president and COO. Realising that many others must have shared their pain, they set about creating a drag-and-drop website development tool that would be useful for consumers, startups and corporates alike. “They wanted something easy and simple to use but that also had enough depth and complexity to it in order to create something that looks beautiful and amazing,” Zohar says. The entrepreneurs’ efforts were vindicated almost immediately and the startup saw significant uptake right from the off. “It took us almost exactly one year to get to our first million users, from the summer of 2008 to the summer of 2009,” Zohar says. “Nowadays we’re adding more than 1.5 million a month.” In light of this impressive global growth, it’s not surprising that Wix decided to pursue an IPO rather than settling for an early exit: in 2013 it floated on the NASDAQ, raising $127m. And given that it’s still growing 40% year-on-year, this was without a doubt the right choice. “We are seeing amazing growth and that’s just the tip of the iceberg for us,” he says.


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Mark Pearson co-founder, Fuel Ventures

Choosing an investor wisely

When it comes to finding an investor, it’s not just about the money The most successful investments rely on forming the right relationships, so figuring out what kind of investor you want in your corner is one of the most important decisions for the future success of your startup. All too often, the person with the money is the person in the driving seat. But if you’re seeking financial backing you should absolutely question whether they’re the right fit for your business.

Hands on, hands off It’s often said that when you take someone’s money, you’re also inviting them to share their opinion. At the beginning of the investment process, you should ask yourself if you want an investor who never calls and lets you get on with things. You should also consider what support they’ll give you, the kind of connections they’ll bring and their level of expertise in your industry. Knowing exactly what support you want can save a lot of trouble further down the road. Make sure that any agreement sets out clear parameters and expectations too. Can they plug any skills gaps? Take a hard look at your business model and your own capabilities. What gaps could an investor fill in terms of skills and knowledge? Finding a partner to plug those gaps can be just as important as the money they bring – especially if the reasons you’re being held back as a business aren’t purely financial. It may be obvious but be sure to look for an investor with a proven track record as well as a strong understanding of your industry and business model.

I’m fairly hands-on in that I’m not the type of investor who hands over the money and then disappears. And while I don’t get involved on a day-to-day level, I feel it’s important they know they have support. That said, not all investors are the same and every entrepreneur or team will want something different from their backers. These are some of the things entrepreneurs should consider when talking to investors.

Objectivity Entrepreneurs can often become emotionally invested in their businesses, which can make it hard to make objective decisions. Having an investor who acts as a confidante but can also step outside of the business to make those decisions is important. Being able to see a different point of view when analysing an idea or a problem can make all the difference when it comes to pushing your business forward and becoming a success. JANUARY 2017 ELITEBUSINESSMAGAZINE.CO.UK

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09/01/2017 10:51

Alice Bentinck co-founder, Entrepreneur First

What’s next for the AI revolution?

With AI set to cause massive disruption across many sectors, what skills will the workforce of the future require?


ilms have long made us aware of the potential of AI but many of these far-fetched ideas are now becoming a reality. In fact, 2016 may be the year we look back on in decades to come and declare was the time when AI went mainstream. And this suggestion has been supported by the increasing investment pouring into the space this year, with global heavyweights like Twitter buying British startups like Magic Pony Technology. AI is not so much sweeping across our world as seeping into it. A combination

causing mass disruption. The truth is, we’re already seeing it in play as agile businesses begin to use AI as an opportunity for growth, creating as many jobs as it is destroying. of enormous computing power and Businesses need to start looking at the latest deep-learning techniques how they can retrain drivers and are promising to give us better medical office assistants to become data diagnoses, better products, better diets analysts, trip optimisers and work in and better lives. Soon it might even be other professional roles we don’t yet able to give us new Elvis songs. know we need. Looking at the bigger picture, this Shaping the workforce of the future means a radical overhaul in our Earlier this month, Mark Carney, education system to build a future governor of the Bank of England, workforce fit for purpose. Today, warned that up to 15 million British jobs we are still creating employees to be could be replaced by robots – and he’s professionals based on the retention right. Just as the industrial revolution of large and broad volumes of changed the face of manufacturing, AI knowledge. Yet computers already will do the same to the service industry, have that capability. They can do it better, quicker and more efficiently than people. But what AI can’t do yet is create, empathise, imagine and cooperate, to name just a few. These most basic of human skills will be the last bastion looking out against automation and ones around which we will look to build the workforce of tomorrow. Making the most of the age of machines The drive to automate will be strongly facilitated by what we want machines to do versus what we want humans to do. Most observers agree that AI is a dual use technology, capable of both great good and great harm and it’s this dichotomy that we must wrestle with – and hopefully overcome. Either way, AI remains the greatest scientific challenge of our times and helping it reach its potential will require the sharing of ideas across countries, companies, labs and academia. Despite the astonishing advances made so far, we’re a long way from having machines that are as intelligent as humans – or even rats. So far, we’ve seen only 1% of what AI can do. January 2017 ELITEBUSINESSMAGAZINE.CO.UK

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How a pair of friends turned a passion for sustainability into a profitable snack company that does things its own way




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he UK produces 15 million tonnes of food waste each year according to Love Food Hate Waste, the awareness-generating campaign. And a lot of this comes from discarded food thrown away by supermarkets, wholesalers or farmers because it’s not pretty enough, not straight enough or simply just because there’s a glut. This bothered Ilana Taub and Michael Minch-Dixon, who were working in corporate jobs at the time and had always been interested in sustainability. But instead of merely getting miffed, they decided to do something about it by founding Snact: a line of snacks made from surplus ingredients that would otherwise be chucked out. “We wanted to contribute to a tastier, greener and fairer food system and create a business that did things differently, from the way we sourced our ingredients to what we paid our suppliers,” says Taub. After stumbling across an old recipe shared by food historian Monica Askay for a ‘fruit of food waste is leather’, Taub realised that squishing and produced by the UK each year then dehydrating the fruit would offer the ideal solution for making tasty treats out of unattractive produce. “The added benefit was that it didn’t matter how bruised or sad the fruit looked to begin with, it all came out looking uniform,” says Taub. The entrepreneurs adapted Askay’s recipe and contacted wholesale traders around London to ask them to set aside fruit that was on the brink of being tossed out. They also swapped the peculiar-sounding fruit leather moniker for the more appetising ‘fruit jerky’, which they started to sell at local markets and events.

But while the co-founders were passionate about sustainability, they lacked experience in food manufacturing on an industrial scale and had never run a business. “We didn’t even know what terms we needed to Google because we had no point of reference,” says Taub. And things didn’t always go according to plan in the early days. “I remember the first time we rented a professional kitchen from a vegan bakery to do a massive batch,” Taub recalls. “The oven wasn’t set up right and everything came out burned. It was a disaster; we had to throw the whole batch away and were up until 4am making a new one.” So rather than jumping in with both feet, they decided to keep their day jobs and go part-time so they could swot up. With an internal motto of ‘give a shit and get shit done’ spurring them on, for a year the duo grew Snact organically until they finally decided they needed an injection of funds to leap to the next phase. Snact’s maiden crowdfunding campaign – which would be the first of three successful fundraising rounds – smashed its target and raised £13,516. The investment went towards securing a manufacturer, developing a packaging solution and doing some initial marketing and brand building activity. More than that though, it created a community of Snactivists: people who share the company’s mission, engage with the brand on social media and even throw on a Snact T-shirt to work at events. “People have been with us since the start, donating as little as £10 and upwards,” says Taub. JANUARY 2017 ELITEBUSINESSMAGAZINE.CO.UK

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“Crowdfunding’s been an effective way to start a community.” And its community has come to form an ecosystem with other businesses and organisations with a sustainable mission. Snact is part of the Food Surplus Entrepreneurs Network and regularly connects with other food startups in and around London. All of this helped build momentum and, in 2015, Taub and Minch-Dixon looked at each other and had an ‘I got this’ moment. “We’d learned enough about food manufacturing and we felt that if we kept doing it on the side, it wasn’t going to go anywhere,” says Taub. “So we went all in.” It was time to take the training wheels off and throw themselves into the venture full-time. Given that we’re living in an era when authenticity is the hottest currency for brands, many businesses have an ethical glaze applied on top. But Snact’s model has been created around its founders’ core beliefs from the outset. “We never make bold claims or pretend our snacks are the healthiest thing you’ll eat; we just share the facts about our methods and how much waste we prevent,” says Taub. “People respond to that.” Whether it’s paying event staff the living wage or ensuring its snacks are free from preservatives or added sugar, Snact ensures this ethos runs through all its operations. “We don’t want to be preachy but we do hope to show other entrepreneurs that you can make a profit while being responsible,” she adds. But sometimes being a good guy has meant making tough calls. Taub and Minch-Dixon chose not to appear on Dragons’ Den because they didn’t want a major investor calling the shots and they also pulled out of a competition sponsored by Shell, the oil and gas company, in the very early days. “I didn’t want Snact to be associated with a company that was responsible for so many bad things,” Taub explains. And this isn’t the only area in which Snact is tearing up the rulebook: the way it manages the supply chain isn’t exactly conventional either. While buying surplus fruit is cheaper, supply patterns are much less predictable: a farmer might have 2,000 tonnes of unwanted apples one year but none the next. It would be easier – and cheaper – to buy ingredients from a single supplier and process the fruit overseas but it’s 32

important to the founders that they minimise the environmental footprint of their products. “Clocking up air miles for the sake of a wider margin just wasn’t an option,” says Taub. But at the end of the day, Snact isn’t a social enterprise; it’s a profit-generating company with a social mission built into it. “We have to be financially sustainable,” says Taub. “If we don’t make money from what we sell, we won’t last long.” Business, as they’ve discovered, is often about compromise and Snact’s founders are becoming more comfortable with the idea of becoming a big player. “At the start, we were a bit wary of the larger supermarkets, especially since a lot of people associate them with a lot of negative aspects of the food system,” she adds. “But we


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realised that if we want to reach people and change the food system, we had to work with big business.” And so these days you can order Snact’s products through retailers like Ocado, the online supermarket, which got the startup’s seal of approval because of the way it supports smallscale suppliers. Taub also sees Snact’s sustainable credentials as its biggest selling point. “While you get many juice and coffee brands who pay attention to provenance, there aren’t many snack companies doing that,” she notes. “If we get it right, we could grow quite a bit – though we’ll never grow at the pace of a tech startup, of course.” The entrepreneur also believes the business is scalable and envisions being able to replicate the model in other parts of the country or even Europe and the US, with local Snactivists sourcing produce from nearby suppliers while using branding and recipes from Snact’s head office. The range doesn’t need to be limited to fruit either: Taub is currently working with a food technologist to develop snacks made from surplus grain and veggies too. “There’s so much food waste around the world that we’ve barely even made a dent yet, so there’s a lot of room to grow,” she says. Snact may have timed it perfectly too. “People have become a lot more aware about food waste and consumers want healthier snacks,” Taub says. For their part, supermarkets have introduced ranges celebrating real fruit with real curves and Tesco has just launched a crowdfunding platform dedicated to food startups. As people demand more transparency from food brands, Snact’s straightforward approach is likely to go down very well indeed. But with two rounds of investment under their belts, plus a crowdfunding round and healthy sales, how would Taub cope with graduating from scrappy startup to being a global food business? “I’m not sure, I’ve never been the head of a big company, although I’d like to think we’ll always stay true to our initial values,” she says. “We’ve got a lot of the pieces of the puzzle in place already; it’s about getting the timing right to make our next move.” 34


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E co n om i c i nd i c ators


conomic indicators be damned,” says Jon Medved, founder of OurCrowd, the equity crowdfunding platform built for accredited VC investors. “If startups have half a brain, they don’t make decisions entirely based on what a pundit thinks.” You can’t blame the man. Most entrepreneurs are used to a barrage of economic indicators landing on their desks each day, many of which appear conflicting or aren’t quite what they seem. Take consumer confidence – the marker many startups look to when making strategic decisions because it indicates how willing people are to spend. When strong post-Brexit vote consumer confidence figures came in – supported by positive retail footfall stats – it seemed that people were cautiously optimistic that things wouldn’t be so bad after all. But despite the rosy headlines, consumers are starting to get a bit more jittery now that the job market is showing signs of weakness. Perhaps the initial positivity was down to the fact that bad news takes longer to sink in for consumers or it may have been the case that people were simply splashing out on fans to cope with the summer heatwave.

Collecting clues BY maria barr

Should startups make decisions based on ever-fluctuating economic indicators – or is it time we replaced the traditional metrics with a set more in keeping with the new global economy? JANUARY 2017 ELITEBUSINESSMAGAZINE.CO.UK

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Ec o no mi c i nd i c ato r s

Unemployment statistics can be equally perplexing. While some might cheer at the recent fall in unemployment, employment also dropped – most likely because fewer people were actually seeking jobs because they’ve retired, for example. So there’s clearly a danger of misreading the signs. To begin to take anything meaningful away from the headlines, startups need to follow a trail of clues in the form of indicators like unemployment, retail sales or inflation to see the bigger picture, rather than cherry picking a few in isolation. “There is a preoccupation with the latest GDP statistics but they can be quite volatile,” says Andrew Sentance, senior economic adviser at PwC, the professionalservices network. “Startups should be worried about consumer confidence.” While the metric is imperfect, Sentance feels it’s still a useful indicator because so many other factors – like people’s purchasing power and their levels of employment – feed into it. Which is perhaps why we’re only now starting to see consumers reacting to the recent economic instability. “What’s been driving consumer confidence is low inflation, which won’t last,” Sentance warns. Startups trying to figure out what’s really going on are also augmenting macro indicators with the swathes of data they’re privy to. UNiDAYS, the global company that offers price-conscious students discounts on popular brands, combines its own data on consumer buying patterns with exchangerate data and consumer-confidence figures to make strategic decisions. For instance, when a shift in the exchange rate between the pound and the Australian dollar made British imports more expensive, the company changed tack by promoting Aussie retailers instead – and enjoyed a surge in sales as a result. “It’s important to listen to the signals and adapt to

Startups should be worried about confidence Andrew Sentance, PricewaterhouseCoopers


shifting economic conditions; you can’t blindly follow the same strategy,” says Josh Rathour, the company’s CEO and founder. “If we’d ignored what the indicators were telling us in Australia, we would have become irrelevant,” he adds. It’s also important to keep an eye on what’s happening externally to make sure you don’t run into cashflow problems. “When orders get delayed because of a sense of risk, whether it’s real or perceived, it makes small businesses vulnerable to cashflow problems,” says Sentance. “We won’t actually see the effects of Brexit until the 2020s but in the interim it’s the uncertainty and confidence blows that are the biggest risk to small businesses because it delays orders so a business has fewer funds available to them.” But startups that have an early warning of potential problems are able to provide themselves with a little cushioning, whether it’s by freezing recruitment or accessing credit. But while processing the data, there’s a danger of becoming too myopic by focusing purely on trends at home. “It’s not all doom and gloom around the world and


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E co n om i c i nd i c ators

Entrepreneurs don’t accept the odds: we believe in miracles and magic Jon Medved, OurCrowd

startups can buck any short-term issues in the UK market by looking globally,” says Rathour. Since the Brexit vote, for instance, the entrepreneur has seen UNiDAYS’ partners invest more in opportunities across the pond in the US. Now that made-in-Britain clothes are slightly cheaper thanks to the lower pound, they’re witnessing even more demand. Meanwhile, Medved believes that startups tend to have a global customer base anyway so they’re not catastrophically affected by the fluctuations in domestic economic data. Perhaps that’s why so many appear to be feeling upbeat. According to the recent Aldermore SME Future Attitudes report, 82% of SMEs are optimistic about their business

performance in 2017 and a large percentage expect their revenue to grow. There’s also the fact that in a world where Brexit and Trump have left many pundits red-faced, some skepticism of expert opinion is setting in. “‘The word ‘pundit’ is almost a synonym for clueless so I’m not sure I’d want to believe what a pundit has to say,” says Medved. “Nobody can really tell you what’s going to happen in the overall economy.” But Sentance still believes caution is in order. “It’s important that startups don’t get caught up in any sort of euphoria or make overly optimistic assumptions,” he says. “You’ve got to be conservative.” So when the director general of the British Chambers of

Commerce warns of “a bumpy road ahead” and slower GDP growth, it may be worth startups heeding his warning and applying that pinch of salt to the rim of a tequila shot instead. However while some indicators are of value, startups are rarely put off by doomsayers and it’s for this reason that Medved describes himself as “mildly bullish” about Britain’s future. “Entrepreneurs don’t accept the odds: we believe in miracles and magic,” he says. “You don’t start a business because you read from a pundit that GDP growth is going to go up. We couldn’t care less.” Instead, Medved believes most startups are concerned with a mixture of sector-specific indicators and long-term metatrends, which he says look “maybe ten times further ahead than economic forecasts”. So is it perhaps time we added a few extra indicators in there, like innovation indexes? “If you look at the innovation cycle, we’re in the midst of a huge boom and, with technology like big data, the cloud and the internet of things, every industry has been or is about to be disrupted,” says Medved. “If you look at that stuff, how are you anything but bullish?” JANUARY 2017 ELITEBUSINESSMAGAZINE.CO.UK

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Home away from Home In launch Inglove home Swap, Debbie wosskow haSbecome one of the uKSharIng economy’ S brIghte St Succe SS StorIeS, go Ing from wInnIngyoung enterpr ISe at 15 toIvIng recean obe from the Queen

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Home away from Home In launch Inglove home Swap, Debbie wosskow haSbecome one of the uKSharIng economy’ S brIghte St Succe SS StorIeS, go Ing from wInnIngyoung enterpr ISe at 15 toIvIng recean obe from the Queen

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Taste of things to come Bringing his trademark enthusiasm to the table, Timo Boldt is revolutionising the way consumers cook with Gousto WORDS BY JOSH RUSSELL

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Perhaps the ingredients in Timo Boldt’s cupboard that pack the most punch are his passion and culinary skills. And both of these proved invaluable when he was first courting board members for Gousto, the recipe-kit startup now taking the UK by storm. “I cooked meals for them, tried to be really charming and literally never gave up,” he says. For example, while his attempts to woo Ian West, former CEO of SkyTV and non-executive director at Naked Wines, TalkTalk and Pact Coffee initially fell on deaf ears, with time Boldt’s enthusiasm whet his appetite. “He came back and said ‘you’re clearly really persistent and want to work hard to make this succeed: I’ll invest in you as a person.’” Without a doubt, Boldt picked up much of this relish for cooking and commerce from his godmother and her husband. “They’re serial food entrepreneurs,” he says. “I was massively inspired by their lifestyle and passion.” During his final years of high school, Boldt moved from his home country of Germany to stay with the couple in California’s Napa Valley. Before long he was following their lead and taking cookery classes, something that helped his godparents see the enormous potential the young entrepreneur had. “They would always come to me saying: ‘Timo, you have no kids or mortgage – why aren’t you following your passion for food?’” he says. Despite this, after graduating with a degree in international business administration, Boldt wanted to get his teeth into something slightly more meaty. “The flavour of the month back then was investment banking,” he says. While he admits he didn’t know much about the industry at the time, he applied for several roles and was snapped up by Rothschild & Co, spending a short time in its New York office before being relocated to 44


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Germany and eventually London. During his time working for the banking behemoth, Boldt quickly found himself developing a broad suite of skills ranging from financial modelling and analysis to understanding business drivers, as well as building an invaluable network of contacts. “The chairman of Rothschild has since invested in Gousto and many of the people I met there have worked for the company at some point,” he says. One contact he formed there would prove even more instrumental than all the others: his future co-founder James Carter. “We literally sat next to each other in the first training class,” he says. Realising they had similar interests, the duo ended up taking cooking classes and hosting dinner parties together and this formed the basis of a friendship that lasts to this day. “He exited the business last year but we’re still close and attended each other’s weddings,” he says. By 2010, Boldt had begun to get itchy feet and while working at Rothschild had taught him a great deal, he was hungry for a new challenge. “Investment banking is interesting in that the first year you have a tremendous learning curve but then at some point that begins to tail off,” he says. “I felt like if I moved from the advisory side to the investment side, I could accelerate my learning again.” Joining Petrus Advisers, a new hedge fund spun off from Goldman Sachs, as its first associate, Boldt found himself in his first truly entrepreneurial role. And it’s safe to say this is something he took to with his trademark enthusiasm, gradually working his way up to become vice-president. “We opened two other offices, scaled rapidly and I eventually had a massive opportunity to lead the London office,” he says. “It was hugely exciting.” However, this tiny taste of entrepreneurialism still didn’t sate his desire to follow in his godparents’ footsteps and he began to think about how he could build a business of his own. “I actually took a bit more time and thought really hard about what motivates me,” he says. “I decided I wanted to solve tough problems, do some good in the world and have fun doing it.” And as Boldt researched opportunities in the food sector, he began to realise that, in an age where consumers feel more time poor than ever, our entire approach to home cooking is back to front. “For the last fifty years, you’ve had to look up the recipe, write a shopping list, go to the store, pick up the ingredients and measure them out,” he says. “That’s a lot of work.”

Not only that but given research conducted by Ocado in 2015 found that the average Brit knows how to cook just nine meals from scratch, many budding Blumenthals or fledgling Fearnley-Whittingstalls were clearly finding themselves stuck in a rut. “If you look at how many people watch Master Chef and spend money on food magazines, it’s obvious that there’s a huge demand for inspiration but many recipes require you to find all kinds of weird spices,” Boldt says. In his eyes the solution was clear: interesting and innovative recipe kits with ingredients packaged in the exact quantities required that are sent direct to consumers’ homes. But while his long-term goal was to enable consumers to order boxes online, Gousto’s initial offering was considerably lower tech: the entrepreneurs started out flogging prepackaged kits from a stall in Shoreditch. “I couldn’t even get a license for the proper food market at Borough Market,” says Boldt. “So we had this weird stall at an antiques market on Brick Lane selling recipe kits with really odd branding.” Shifting these first few kits provided the new startup with some invaluable feedback and they started encouraging friends and colleagues to try them out. Before long, the city was abuzz with talk of Gousto’s recipe boxes. “The concept was novel and people got excited about it so there was a lot of word of mouth,” he says. “That helped tremendously.”

I decided I wanted to solve tough problems, do some good in the world and have fun doing it JANUARY 2017 ELITEBUSINESSMAGAZINE.CO.UK

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But as demand started to ramp up for Gousto’s services, it became the clear the startup was in desperate need of an injection of fresh capital. Keen to explore every available avenue, the entrepreneurs even applied to be on Dragons’ Den and were thrilled when Gousto was selected to appear on the show. “Being on camera for the first time was really nerve wracking but it was an amazing experience,” says Boldt. Despite serious interest from Peter Jones, by the time Gousto appeared on the show it had been offered a very attractive term sheet from a group of angels and the entrepreneurs’ unwillingness to jeopardise this ultimately saw the dragon walk away. Looking back, Boldt has very few qualms about this decision. “In general, I’m a hugely optimistic person so I don’t have many regrets in life,” he says. “We just didn’t have the right chemistry and ultimately there was a better offer on the table.” Certainly sticking with the angel deal seems like it was the smart move: Gousto went on to secure £500,000 from the network, which proved invaluable in helping the startup build out its offering. “We used the angel investment wisely,” Boldt says. “We upped the product quality, which helped tremendously with growth and customer loyalty.” Before long other investors were clamouring to back the startup: Gousto secured a $2m seed round led by MMC Ventures in late 2013, while a series A led by Unilever brought another $8.3m into the business in September 2014 and a series B raised another £9m in December 2015. And soon rapidly accessing capital became the least of the startup’s worries: the biggest risk to the business now was becoming the victim of its own success. “It can be very chaotic: you have to build the organisation, put together teams and make sure that the boxes get out the door,” says Boldt. “So the challenge is how you really inject organisational design and a scalable structure into your startup.” Eager to learn the skills required to put these firm foundations in place, Boldt began to study for an executive MBA in his free time – although, like many entrepreneurs, he didn’t have a lot to

Back when we started, no one in the world did recipe boxes 46

spare. “It was very painful,” he says. “I had to do a lot of the reading at 5am or 6am.” Despite the hard work involved, there wasn’t a trace of doubt in Boldt’s mind that it was worth all the effort. “It helped me grow up tremendously, get perspective and – most importantly – learn from the people in the class who had far more management experience,” he says. One of the most important things Boldt learnt during this time was the importance of having the right talent in place – something that he admits can be difficult in such a competitive market. “Google, Amazon, Facebook, the big banks, other startups – everyone is competing for exactly the same people,” he says. “My tech guys receive headhunter calls on a weekly basis, which doesn’t make it easy to retain them.” Fortunately, Gousto has a special ingredient that gives it an edge over its rivals in Silicon Roundabout. “Building an insurance platform or banking product is boring,” he says. “Our teams get to eat our food all day, they get to see the fruits of their labour and that’s much more exciting.”


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This is one of the reasons that Boldt has previously been very vocal in his support of gender equality. “Even from a purely selfish point of view, if you’re not tapping into all of the talent that’s available, that’s obviously a huge issue,” he says. In an attempt to tackle any hurdles that might prevent women from advancing at Gousto, Boldt has transformed his leadership team to include more female role models. Meanwhile he’s also attempting to tackle unconscious biases in the hiring process by weeding out keywords in job descriptions that tend to discourage women from applying. “It’s an ongoing process: we have not completely figured this out,” he says. “I’ve got a huge opportunity but on the other hand a tremendous obligation to make this better.” And talent isn’t the only area Gousto is finding itself having to compete: since it was founded, rivals operating very similar models like Berlin’s Hello Fresh and New York’s Blue Apron have burst onto the scene. However, Boldt seems remarkably unperturbed by the new kits on the block. “Back when we started, no one in the world did recipe boxes,” he explains. “When you’re starting out you’re always looking for validation of the model so I was actually delighted to see other people jump on the bandwagon.” And there are good reasons why Boldt is so unruffled by the competition. Not only does Gousto come in at a lower price point than its rivals and with a much shorter lead time but it also allows consumers to pick the foods that really tickle their tastebuds. “We already offer by far the most choice,” he says. “Ours is the only platform where you’re able to select which recipes you receive.” But customers don’t just get to pick which provisions end up on their plates: they are actively involved in the development of new dinners. “On a weekly basis, we get recipe happiness reports highlighting what people currently like and what the latest food 48

The people that truly standout, make it happen and become successful

are the ones that deeply care about what they’re doing

trends are in that area of the UK,” Boldt says. Using this real-time data, Gousto’s team of gourmets can see which meals fizzle and which sizzle, enabling them to tweak and fine tune recipes to ensure every bite hits home. “Innovation comes in three parts: ideation, selection and execution,” says Boldt. “Effectively we outsource both the ideation and selection stages to the customer.” Without a doubt, this has proven to be a recipe for success. Gousto’s customer-focused approach has seen it top many publications’ lists as the UK’s best recipe delivery service and has helped net Boldt plaudits and gongs galore, including Young Entrepreneur of the Year at the Great British Entrepreneur Awards. Moreover, the startup’s growth has exploded: Gousto’s annual revenue has risen 240% over the last three years, it raised a whopping £10m in November and it now has over 200 employees. “So the business has absolutely transformed over the last couple of years,” says Boldt. And in the entrepreneur’s eyes, this is just the beginning. “We intend to relentlessly work on the proposition and the product, listening extremely carefully to the customer to make this a mass-market proposition,” he says. In light of his enthusiasm for bringing UK consumers delicious and innovative recipes, it’s hardly surprising that Boldt believes passion is key for anyone looking to disrupt a staid industry. “At the end of the day, there’s only one thing that’s guaranteed when building a startup: it’s going to be hard work,” says Boldt. In light of this, any time an aspiring entrepreneur approaches him and asks whether they should commit to their new business concept, he has just one piece of advice. “The people that truly stand out, make it happen and become successful are the ones that deeply care about what they’re doing,” he concludes. “So love what you do, be absolutely passionate about your business and create a product you truly believe in.”


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We need Marketers may be dreaming of chatbots but what are the risks of being an early adopter – and how smart is the technology right now? At a recent chatbot meetup in london, delegates scribbled notes furiously as they heard about a Robbie Williams chatbot that cracks jokes and entertains customers. And for the first time, the number of marketers far outweighed the developers in the room. There’s a lot of buzz around chatbots at the moment – a survey by Oracle found that 80% of respondents were already using or were planning to use them by 2020. But is now the time to invest? And are chatbots really smart enough to be welcomed into the inner circle of your marketing team? Of course chatbots have been bobbing about since the internet’s early years, as anyone who remembers the AOL Instant Messenger chatbot SmarterChild will know. And given that we’re living in the age of nostalgia-drenched revivals, it seems natural that they’d make a comeback. But since they’ve evolved into many forms, defining what exactly a chatbot is can be somewhat tricky. Whether they communicate through an automated text message, Facebook Messenger or Amazon Echo, modern-day chatbots essentially deliver services via a chat interface. They’re usually powered by artificial intelligence but not always. And they can respond to either voice or text commands. The trouble with such a


BY maria barr

loose definition, however, is that it makes the term prone to overuse. “Marketers have a tendency to latch onto a word and hammer it out until people are sick of it,” says Lawrence Weber, managing partner at Karmarama, the communications agency. “There’s a danger of pigeonholing some of these technologies.” What’s perhaps getting marketers most excited is the potential chatbots offer for deeper engagement and more personalisation. “Some chatbots are behaving like very personalised search engines but with a more human touch and I believe that’s where they’ll go,” says Michael Olaye, chief technology officer at DARE, the digital agency. Many of the leading tech companies are even going that extra step and providing services that act as your very own Jeeves: making bookings, suggesting what to buy your brother for his birthday or reminding you to pick up



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to talk your dry cleaning. Mark Zuckerberg has even developed a Facebook Messenger bot-ler for himself that helps him round the house, from popping on a round of toast to controlling the lights. One arena where brands want to boost engagement is social media. But time-pressed social-media managers can struggle to keep up and, according to Sprout Social, the social-media management tool, 90% of messages get ignored while it can take as long as 10 hours to respond to the other 10%. It’s tempting to see chatbots as an alternative. In January 2016, Chris Messina, a developer who’s known for having invented the hashtag, excitedly predicted in a blog that “2016 will be the year of conversational commerce” and we would all find talking to brands via chatbots totally normal by the year end. Whilst his vision might have been premature, several

brands have launched chatbots that are able to hold a basic conversation, share suggestions for products and even entertain. Last year Channel 4 created a Facebook Messenger chatbot to promote the TV programme Humans while Odeon came out with a chatbot that gives people tailored film recommendations. Doing this with people rather than AI for all of Odeon’s customers would have been pretty much impossible, both logistically and financially. Beyond just the discovery or engagement stages of the journey, chatbots can be just as effective at closing the deal and maintaining a rapport after a sale. Facebook Messenger allows transactions to take place within chats and Olaye believes they have a role to play after a sale or event too. “If you look at loyalty programmes, chatbots could help brands execute them by sharing relevant rewards,” he says. “There’s so much potential for brands to use the technology to establish lasting relationships.” But if chatbots are going to really connect with consumers, it’s important that they convey the right personality so the experience isn’t jarring. “Because you’re removing the usual interface and buttons, the copywriter has a huge role to play when it comes to creating the script that’s behind the chatbot,” says Weber. “We need to fundamentally rethink user experience and your copy team needs to work closely with your developers.”


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C h at b ots

A lot of bots claim to have a certain personality but they can’t always deliver

Juraj Pal, Sure

But even with a great script, chatbots are not always sophisticated enough to pick up on the nuances of the English language. Many chatbots are painfully slow and have trouble answering certain questions. Juraj Pal, cofounder of Sure, a bot that makes food and drink suggestions, programs bots so they can mimic natural language patterns and tailors the tone of the bot to mirror the way millennials speak by using emojis, GIFs and certain phrases or sentence structures. “While chatbots with in-built natural language processing is the dream, for now the power of your copywriting and storytelling is what makes the difference,” he says. “A lot of bots claim to have a certain personality but they can’t always stay in character when they encounter certain phrases.” Pal is referring to the now infamous incidents where people have deliberately tried to game bots into making gaffes in an effort to test the boundaries of the technology. The most notorious example is Microsoft’s Tay chatbot, which was designed to learn from the tweets it received but was manipulated into spouting conspiracy theories and praising dictators. In light of this, it’s important for humans to be on hand to set things back on course when consumers


attempt to derail the AI. “Early adopters like to try to break tech but developers are constantly learning and adding elements to overcome this,” says Pal. And given the public’s penchant for trying to get AI to behave naughtily, Olaye advises marketers to avoid deploying them in particularly sensitive situations. “Chatbots aren’t foolproof so I wouldn’t recommend a brand uses them when people are already starting out dissatisfied and an issue needs to be diffused,” he says. So until chatbots become smarter, brands should be aware of their limitations and set expectations for consumers. “I’ve been pleased to see that most brands have learned from previous tech where they over-promised,” Weber notes. “Chatbots are most effective for two things: conveying useful information or creating frivolous and silly entertainment to delight and surprise.” Weber believes marketers need to think long and hard about what a chatbot can do that an existing platform can’t – or run the risk of overwhelming the customer. There’s another dimension to chatbots that marketers must consider: their responsibility when it comes to data. While there are clear policies around how brands use cookies to paint a picture of their customer, with a bot they’re asking people a range of intimate questions about their preferences and location. Brands need to be mindful that they’re doing their due diligence when it comes to telling people how they collect, store and use data or the public will soon grow wary of opening up to bots. “While millennials are comfortable using chatbots and sharing data, if you misuse their data it can damage your brand pretty quickly,” warns Olaye. “As chatbots become smarter and start to talk to each other, marketers need to consider the ethics.” Data capture opportunity gone wrong or meaningful engagement tool: it’s up to marketers to decide how chatbots will be used.


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FROM T-SHIRTS MONITORING how hard you push yourself to apps that supply you with seemingly endless streams of workouts, it certainly is an exciting time for anyone with twin passions for fitness and tech. “Just in the past year, scores of technological innovations have been introduced that wouldn’t even have been thought of a decade ago,” says Richard Cooper, head of digital at AXA PPP Healthcare, the health insurance company. Indeed, while Leonardo Da Vinci may have first envisioned step counters as something that could be used by the military in the 15th century, today millions of people use fitness tech on a daily basis. “We have tech merging with health, sport and lifestyle products,” says Steve Ward, executive director at ukactive, the non-profit organisation devoted to promoting active lifestyles. “It’s a really interesting space to be in.” And interest in these gizmos and gadgets only seems to be growing. The wearable-tech market alone is expected to be worth $12.4bn by 2022, according to MarketsandMarkets, the research company. Given the rise of this new tech and Team GB’s accomplishments during the Olympics, it seems almost paradoxical that the UK is fast becoming the fat man of Europe. Researchers from Imperial College London expect that 38% of Brits will be obese by 2025 and those love handles don’t come cheap. In fact, the NHS has to splash out £5.1bn each year to treat obesity-related health condition like diabetes, cancer and cardiovascular conditions. “They’re bankrupting the NHS and making healthcare unaffordable,” says Ward.





Fi t ness t ec h no lo gy


nd the culprit behind the increasing number of muffin tops on the UK’s streets isn’t hard to find: people aren’t as physically active as they used to be. “Up until the middle of the 20th century, poor people were essentially paid to do fitness because of their manual jobs,” says Carol Propper, professor of economics at Imperial College Business School and professor of economics of public policy at Bristol University. The automation of industries and the digitalisation of business have both contributed to creating a situation where fewer people need to exert themselves physically to get their paycheques. This may mean a better working environment but the side-effect has been that more people are living sedentary lifestyles. According to ukactive, 12.8 million UK residents do less than 30 minutes of exercise each week. “It’s become easier and easier to design exercise out of our lives,” says Ward. “So people do very little.” Even though the fast pace of the technological evolution may have contributed to the impending obesity crises, he’s adamant that tech can also be part of the cure. That’s why ukactive teamed up with AXA PPP Healthcare and Tech City UK, the governmentbacked organisation supporting tech startups, in October to launch ActiveLabs, the UK’s first accelerator dedicated to finding and supporting Britain’s future fitness unicorns. “We aim to be the global launch pad of businesses encouraging physical activities,” says Ward. Already, ukactive works with over 4,000 partner organisations, many of which are health and fitness companies. “And we’re really excited about the chance to merge the history and success of the industry with innovators who can 56

W e h av e t ech merging w i t h he a lt h, sport and lifestyle products It’s a r e a l ly in t er e s t ing spa ce t o be in Steve Ward, ucactive and ActiveLabs

take full advantage of the exciting environment we’re working in.” The accelerator announced its first batch of 12 hopeful health and fitness disruptors in November. Ranging from a startup describing itself as the “Fitbit for strength training” to a platform that will help employers gamify their offices to make their employees more active, ActiveLab’s first class is poised to transform the future of fitness tech. However, they’d be well advised to target fitness aficionados with relatively deep pockets as fatblasting products and services don’t come cheap. While a gym membership can cost about £30 per month, fitness tech can make an even greater dent in your budget. A Fitbit can cost about £100, a

MyZone heart-monitor belt costs £129.99 and Athos’ smart running leggings cost £279. “If you’re only paid £10 an hour then you won’t have any money to spend on these devices,” says Propper. This may also help explain why the early adopters of fitness tech are part of a group referred to as fitsters. As the name suggests, this is a sub-branch of the hipster culture, meaning young affluent people who are on top of the latest trends and totally in tune with Apple’s product catalogue. The only difference is that fitsters take their health extremely seriously, which is why they are also the people who first jumped on the fitness tech bandwagon. But not everyone fits into this demographic: startups in this sector


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Fit n ess te c hnology

aren’t reaching the more sedentary layers of the British population partly because these groups often don’t have resources to spare on fitness. “The cost of fitness is not just that it may be expensive but it’s also about the cost of the time you’re forgoing as well,” Propper says. “Going home, changing into your running gear and then going for a run is much more difficult for people who shuffle between lowpaying jobs and picking up their children from school. You can carve out extra money but not extra time.” That being said, Andy Bowness, founder and CEO of Bodireel, the personal-trainer app, still believes fitness tech can help people who are less well-off than fitsters become healthy without it costing an arm and a leg. “Tech can be used to get high-quality information to the end user very cheaply,” says Bowness. “Instead of paying £50 for an hour with a healthcare professional, you can get quality help much cheaper through your smartphone.” Given that 12.8 million Brits don’t exercise, it’s safe to say that startups stand to gain a lot by converting even a small proportion of that group into costumers. “If you can win over people who wouldn’t ordinarily use the product then

that would obviously increase your revenue,” says Bowness. And once startups have gotten fitness tech into the hands of consumers, there are several ways in which it could help whip Britain back into shape. Firstly, it could educate people to make better choices. “It’s clear from the health literature that less-educated people have less of the knowledge and the skills they need to make good long-term decisions,” says Propper. Apps and devices that help people make better dietary choices and demonstrate how to exercise properly could therefore alleviate the strain obesity places on the NHS. Secondly, fitness tech could motivate people to do some type of physical activity in whatever time they manage to carve out for themselves. And every little helps. “The biggest gains in health can be found in activating someone who does absolutely nothing,” says Ward. “If you can find ways through coaching, support, gamification or gentle nudges that makes people more physically active, that would be a significant win.” For instance, last summer saw about 65 million people hitting the streets in order to catch Pikachus and Bulbasaurs thanks to Pokémon Go. “This

mums on the move Baby2Body Melinda Nicci first had the idea for Baby2Body, the fitness app, when she was pregnant with her first child. Having always been a bit of fitness nut, it was only natural for her to pursue ways to stay healthy throughout her pregnancy. However, she was shocked by the mixed and inconsistent answers she got. “Some people even told me to avoid exercise altogether,” she says. When looking into the matter Nicci realised that there was a huge gap in the market for pregnant women and new mothers who wanted to stay fit. Not one to miss out on an opportunity, she quickly set up her first business to help these female fitness fans. After finishing a master’s degree in sport psychology and doing a quick stint at Philips focusing on consumer healthcare and wearable technology, she decided to take Baby2Body into the digital age and launched the business as an app in the beginning of 2015. “Now, Baby2Body is a woman’s complete daily guide to a healthy pregnancy and a happy motherhood – addressing her wellbeing, fitness, nutrition and beauty needs,” says Nicci. After joining Velocity Health, the UK’s first preventative healthcare accelerator programme, last year, the startup has raised $850,000 in an earlystage round and is now reaching over half a million women around the world. With this support, Baby2Body is primed to help new mothers feel comfortable in their skin.


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09/01/2017 18:53

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Fit n ess te c hnology

instead of paying £50 for an hour with a healthcare professional, you can get quality help much cheaper through your smartphone

Andy Bowness, Bodireel

augmented reality app is probably the biggest success of activating people in recent years,” says Ward. And it did so without the aspiring trainers of digital Japanese monsters having to invest in expensive gym memberships or wearable tech. In fact, chances are that new enterprises actually have better chances of enthralling this group than corporate giants do. “Startups have a unique flexibility that larger companies don’t have, allowing them to respond faster and meet user needs more completely,” says Melinda Nicci, founder and CEO of Baby2Body, the health app for pregnant and postnatal women. “For example, startups can create cost-effective fitness resources and leverage meaningful incentives

for exercise, which is the perfect combination when enouraging nonactive and less affluent populations to get into fitness.” For instance, startups have plenty of opportunities to slim down the British population whilst bulking up their wallets by piggybacking on the efforts of big business. With more corporate institutions launching wellness schemes to protect their employees’ health and productivity, new businesses can offer their services to help the more notorious couch potatoes up from the sofa and onto the treadmill. “This can be a great monetisation stream for startups in this space,” says Nicci. As an example, Bodireel has teamed up with brands that sell companies health insurance. “We

reach out to the businesses that have used that insurance and offer to do a health check for each employee,” says Bowness. This allows the startup to connect with people who wouldn’t otherwise have heard about the app or be inclined to exercise. And this is not the only reason founders of fitness-tech startups have reason to be optimistic about the future growth of their business. In 2015, three million activity trackers were sold in the UK alone, according to Mintel, the retailanalysis company. With one in seven Brits owning a fitness tracker – not to mention other pieces of fitness tech – you have to ask if the fitsters’ enthusiasm for these products won’t start permeating through to other demographics who otherwise wouldn’t purchase these new innovations. “These sales cannot stand for that audience alone,” says Cooper. “As technology becomes more integrated into everyday lifestyles, it’s inevitable that more people will begin to take notice.” Despite the scale of the market and the sales of wearables, fitnesstech startups certainly have their jobs cut out for them when it comes to solving Britain’s obesity crisis. “Whilst fitness technologies may not be the sole answer to encouraging people to do more exercise, they can help boost interest in those thinking about a healthier lifestyle,” concludes Cooper. Fitness tech clearly isn’t the silver bullet to help solve the problem of Britain’s expanding waistlines but it can certainly act as a starting pistol. JANUARY 2017 ELITEBUSINESSMAGAZINE.CO.UK

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Fe ma le e ntre p re ne urs


Women Female-led startups are often more successful than the ones men run but women are only leading a proportion of new enterprises. A slew of new initiatives now aim to boost the number of female entrepreneurs

BY Eric Johansson


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Fem a l e ent r epr eneu rs

The UK is undoubtedly seen as a leader when it comes to startups, with London frequently being named the European capital of innovation. But while Blighty may be a trailblazer in tech, the country still lags behind when it comes to gender equality amongst startups.


hree out of five new enterprises are led by men, according to research from Forward Partners, the VC firm. Fortunately this may be about to change. A number of new initiatives are tackling the structural problems preventing women from realising their entrepreneurial potential by offering them support, opportunities to raise money and chances to network with the movers and shakers of the UK startup scene. And these initiatives haven’t come a moment too soon. According to research from YouGov and Facebook, there are 2.5 million women in Britain who would like


to launch their own businesses. The study also calculated that if the women waiting in the wings were enabled to realise their ideas, this would add £10.1bn to the UK economy by 2020. While 25% of the 2,232 women polled weren’t confident enough to get their dreams off the ground, the main obstacle holding budding female entrepreneurs back was a lack of role models, with 72% being unable to identify a single female business leader running an enterprise like the ones they wanted to set up. “You can’t be what you can’t see,” says Lu Li, founder and CEO of Blooming Founders, the network that champions female entrepreneurs and freelancers. That’s why a lot of these new initiatives ensure that they can not only point out female role models but also offer aspiring entrepreneurs the chance to connect and learn from them either via workshops or meet-andgreets, an opportunity that wasn’t around a few years ago. “Obviously, there were networking groups out there before but up until recently they were very traditional, stiff and old-fashioned,” says Li. “The women you met there had probably been running their businesses for 20 or 30 years and that’s not what you want when you’re talking about startups.” While male entrepreneurs have long enjoyed the ability to

rub shoulders with relevant role models and peers, the absence of similar support for women has meant that many potential female founders have been put off trying to launch a company. “It’s really challenging when you don’t have the knowledge, the connections, the experience or the people who can offer the support that you need,” Li says. Creating communities is therefore pivotal for the initiatives aiming to invigorate female entrepreneurship in the UK. However these enterprises don’t just offer women the chance to source vital insights from likeminded individuals but they can also prove beneficial in regards to funding. And that’s essential to successfully boost the gender equality of the startup scene, as 34% of women in the YouGov and Facebook survey said that difficulties raising capital were holding them back from launching and scaling a new business. This can be partly attributed to the fact that the VC ecosystem – just like the startup landscape – is not exactly gender equal. “Diversity is a really big problem among investors,” says Joel Hughes, UK design, technology and hardware manager at Indiegogo, the crowdsourcing platform. “Most of them are men with similar backgrounds and therefore tend to be less receptive to female entrepreneurs and their projects.” However, it would be erroneous to assume that this is down to any conscious discrimination on the part of VCs. “It’s due to unconscious bias,” says Karen Cahn, founder and CEO at VProud Labs, the video company, and iFundWomen, the crowdsourcing platform for female entrepreneurs. “When a tribe of white guys controls all the money, they


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Fem a l e ent r epr eneu rs

unconsciously tend to favour and fund people that look like them.” Crowdsourcing has often been hailed as a solution to investor bias. However, Cahn quickly shatters that illusion. “It’s a myth that you only need to put up a really cool video and these magical crowdfunding elves will simply give you money,” she says. “The reality is that it all comes down to the creators’ tribes.” The people investing in a campaign are usually people who’re acquainted with the entrepreneurs’ families and friends, including professionals on the startup scene. Again, it’s not who you are but who you know. Given the benefits creating networks can have for female entrepreneurs’ chances to successfully launch and scale their business, it’s rather obvious why initiatives aiming to support women have put creating communities front and centre. But while they have successfully begun to invigorate female founders, these enterprises still struggle to be taken seriously. “People think that I’m running a non-profit or a charity,” says Li. “People don’t seem to associate giving support for female

entrepreneurs with it being a business opportunity.” The fact that these initiatives are profit-making machines is important because it demonstrates that investing in female entrepreneurship is simply good business. “The way you make a difference is through business growth and that really means having a positive and testable bottom line,” says Anna Jones, CEO of Hearst Magazines, the publisher, and cofounder of Allbright, the funding and support platform for female-led businesses. In other words, in order

When a tribe of white guys controls all the money, they unconsciously tend to fund people that look like them Karen Cahn, iFundWomen


to encourage VCs and entrepreneurs alike to bet on female-led startups, these new initiatives must prove that investors aren’t just making deposits into their karma accounts but their banks as well. “That’s what this is about, not handing out money to charity,” adds Jones. And it shouldn’t be a hard sell for investors: according to Kleinwort Benson, the private banking and wealth-management firm, only 11% of female-led startups fail compared to 17% of male-led ones. Now, thanks to initiatives highlighting the success of women in business, this fact is finally starting to sink in. This was something that became apparent for Jones when she was using her own network of investors and business leaders to support Allbright. “There are just as many men as women who are recognising what a great investment this is,” says Jones. “And most of them are saying yes because it’s something that they’d thought of doing themselves.” Does this mean that 2017 will finally be the year the UK’s startup scene become equal? Probably not. “But these initiatives mean that more female-led startups will get funding so that maybe in a decade or two we won’t need them anymore,” says Li. “We’re part of a movement that gets stuff done and creates practical case studies that show what an incredibly under-tapped resource women are in terms of skill and experience.” In light of this, it’s hardly surprising that the women behind these initiatives have a positive outlook for the future. “This is going to be an unusually positive moment for the UK and for being a female entrepreneur,” concludes Jones. “We’ve only just started.”


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NO ONE SEEMS TO LIKE estate and lettings agents very much. Only 25% of the public trusts the profession, according to a survey from Ipsos MORI, the research company. In fact, estate agency was labeled the second least trustworthy profession after politicians, who were trusted by just 21% of the population. So you may not be surprised to hear that not only have a number of startups dedicated themselves to transforming the property market but they’re doing so by challenging the very existence of intermediaries between sellers and buyers. “There’s certainly a desire to remove the middleman,” says Rupert Hunt, CEO and founder of SpareRoom, the houseshare platform. And it seems as if this yearning to turn the sector on its head hasn’t arrived a moment too soon. While the past few years have seen fintech, adtech and fitness tech startups utilising new hardware and software solutions to disrupt their respective sectors, the property market has ambled behind. But the industry’s unwillingness to swap old familiar business methods for new and unproven ones isn’t that hard to understand. “Traditionally, you didn’t need to do a lot to do well in the market,” says Dominic Wilson, general manager at Pi Labs, the VC and accelerator specialising in proptech startups. Not fixing something that ain’t broken is certainly a good way to save money when you’re talking about washing machines but in the property market it can be argued that this attitude has led to a slightly skewed sense of priority. “It was never anybody’s job to focus on the customer,” claims Gemma Young, co-founder and CEO of Settled, the online property platform, who used to work at an estate agency herself. Yet the market has recently been forced to change to keep up. “Industry performance is very different now from what it used to be,” says Wilson. And all it took was the rise of new technologies and for the world economy to tumble off a cliff. When the recession hit the markets in 2008, it caused property prices to skyrocket and a

knock-on effect was that the average age of first-time house buyers jumped from 28 to 30, according to the Halifax First Time Buyer Review from 2016. Adding to the price of properties themselves, buyers and tenants also have to consider the time and money invested in getting mortgages, whether that’s putting themselves through background checks or paying deposits. “This means that a lot of people are looking to innovate to reduce these costs,” says Wilson. Indeed, plenty of small and agile businesses are stepping up to the plate by utilising new hardware and software solutions: the so-called proptech startups. While this isn’t the first wave of tech companies aiming to transform the market – with property platforms like Zoopla and Rightmove having shifted the focus from high-street estate agents to websites – if you ask many second-generation proptech entrepreneurs, they’d say these businesses didn’t change the sector because they were still using old-school agents. “It was fundamentally the same process,” says Calum Brannan, founder and CEO of No Agent, the property-lettings startup. That being said, this first wave still played a pivotal role in bringing on the advent of proptech. “They are actually one of the biggest reasons as to why we’re seeing innovation now,” says Matt Robinson, founder and CEO of Nested, the property platform. This is because online listings increased the amount of data available to today’s proptech startups and also contributed by changing consumer behaviours. “We’re at the point now that people are happy to sell their house online,” says Robinson. “People would have found that extremely troubling ten years ago.” Following the upheavals of the recession and changing consumer attitudes, proptech entrepreneurs are poised to take advantage of the evolving market. Brannan is one of them. “I wanted to give it the Ubertreatment,” he says. In much the same way the famous ride-hailing startup connects



Pr o p t ec h

drivers and passengers directly, Brannan is now aiming to remove the middleman from the process of purchasing a home. “That means people can use technology to find a property, apply for it, do the credit and reference check, report all the repairs via an online system and have all the billing management done through a central platform,” he says. And No Agent isn’t the only new enterprise aiming to cut out third parties. In fact, a lot of the new proptech startups are based on the idea of directly connecting sellers and buyers or landlords and tenants, allowing them to have an open

It doesn’t make sense having someone in a pinstripe suit just opening a door Gemma Young, Settled


discussion without an agent hovering over them, looking to boost their bottom line. “That changes the whole market,” says Young. “It’s such an emotional journey and you want to have a direct relationship with the person who you’re going to sell your most valuable asset. It doesn’t make sense having someone in a pinstripe suit acting as the intermediary.” But what about having the letting agent show you around in your potential new abode? Tech could help be used to do that too. In fact, No Agent, along with companies like Keypla and PropertyScape, is using VR and 360-degree videos to give customers a chance to view a place before signing a rental agreement – sometimes even before the buildings are erected. “But I don’t think that it is going to be as relevant when you buy a house,” continues Brannan. “It’s a purchase that people don’t do very often so they’re probably not going to be very willing to just make a decision from VR.” However, even if you ask the people at the forefront of the property market revolution, not all of them are convinced that the middlemen will disappear entirely. “Many estate agents are wonderful and I’m sure there’ll be customers who’d like a bit a little bit of handholding,” says Young. Brannan agrees and explains that even though No Agent aims to let software do 100% of the jobs usually associated with agents, believes the startup’s customers still want someone to pick up the phone if they have any questions. “And that’s where our challenge lies: trying to reduce that human contact,” he says. Given that the business is still very much in its infancy, it may seem impossible to predict the future but some proptech entrepreneurs are already quite bullish about the impact they may have. “People are realising that there is an alternative,” concludes Young. “My prediction is that proptech will get to a point where it overtakes the traditional sector.”


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Au t h o r i s i ng sh a r es

A problem shared Navigating the legal landscape around authorising and issuing new shares can be tricky. Fortunately we have some advice to help you find your feet BY JOSH RUSSELL



ithout a doubt, being able to offer up equity in their business provides fast-growth startups the rocket fuel they need to scale. But no company has an unlimited number of shares at their disposal. This means that from time to time when entrepreneurs want to hook new investors they will need to authorise new ones. And from a legal perspective, there are a few things entrepreneurs need to consider when topping up their share pool. While many founders may feel that they have a right to the shares of the company they’ve founded by default, in reality things aren’t quite this straightforward. “If entrepreneurs are issued shares right at the very beginning, then they need to remember to pay for them,” says Andy Moseby, corporate partner at Kemp Little, the technology and digital-media law firm. “This catches a few founders out.” Fortunately, entrepreneurs need only set a nominal share value for the fledgling company, meaning the total amount they have to invest may only be in the order of hundreds of pounds. And their contribution need not even be in cash. “They could get their shares by transferring some intellectual property, providing some services or contributing something else of value to the company,” he says.


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Aut hori si ng sh a res

You can authorise a large number of shares to be issued, which would take into account future rounds Andy Moseby, Kemp Little

Before too long, it’s likely a startup will be looking to inject some additional capital into the business. But trading equity isn’t as simple as the founders selling a bunch of their own shares to a new investor. “When shares are transferred, then the money gets paid to the person who held them,” says Moseby. “Actually what founders want to do is get money into the company.” Inevitably, this will require the creation of new shares and the dilution of the startup’s existing share pool. “If the founders hold, say, 100 shares, what typically happens is that you’d subdivide those shares into a large number, such as one million shares, but instead of them having a nominal value of £1, they’re worth £0.0001 a share,” he says. However, this is easier said than done. Given that increasing the number of shares in a startup dilutes the value of existing shareholders’ equity, startups will need to secure approval beforehand. Perhaps the easiest way to do this is by enshrining the right to authorise a certain amount of new stock. “The constitutional documents can be changed when you set up the company to give the directors authority to allot shares up to a certain amount,” says Moseby. But if this isn’t outlined in a startup’s articles, it will need to seek direct permission by way of a resolution of shareholders. “Fortunately a startup only needs 50% shareholder consent to give its directors the authority to allot new shares,” he says. For a fast-growing startup looking to raise rapidly and bring on key talent, this can still be quite a time-consuming process, which is why it’s worth thinking about the future and leaving yourself some runway. “You can authorise a large number of shares to be issued, which would take into account not only the ones that are going to be issued this round but also future rounds,” Moseby says. Despite this, as a startup scales, diluting its share pool just to ensure it has some spare equity in its back pocket may not go down that well with institutional investors. “They will probably want to make sure that you can only issue the amount they’ve approved because they’ll want to make sure they have some kind of control over their dilution,” he says. Once a startup’s directors have the authority to do so, actually issuing the shares themselves is comparatively straightforward: all that’s required

is a board meeting where the directors formally announce how many shares have been issued and to whom. “All that then needs to happen is that person’s details get written up in the company books,” says Moseby. “That’s the point where they’re officially deemed to have been issued the shares.” Despite this, it’s still standard practice to give investors and talent evidence that their shares have been issued – although this doesn’t necessarily need to be done using paper and snail mail. “You should issue them a share certificate but there isn’t any reason why you can’t do so electronically,” he says. Just because a startup is officially deemed to have issued the shares doesn’t mean there aren’t a few last Is to dot and Ts to cross. “Firstly, you have to fill out the SH01 form telling Companies House that you’ve issued a number of shares,” Moseby says. Additionally, startups will need to outline who their shareholders are and how many shares each holds in their yearly confirmation statement, the spiritual successor to the annual return. Finally, they will also need to maintain a PSC register, not only listing all of the parties that own 25% or more of the business but also any parties that own 25% or more of its corporate shareholders. “It’s about making it clear to Companies House who actually exerts a significant influence over the company and that ownership is not hidden by offshore companies or trusts,” he says. Keeping on top of this kind of paperwork is vital, even when entrepreneurs feel they’re being pulled in many directions at once. “We’re realists: having time and money to grow the business at the outset is probably the most important thing for founders, rather than looking at the legal niceties,” says Moseby. But making sure the company has kept accurate books will save a lot of time in the long run: Moseby just spent a year helping a client apply to the courts to get their books amended. “It’s far better to have these things sorted right from the very off,” he says. JANUARY 2017 ELITEBUSINESSMAGAZINE.CO.UK

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A dv ert i s i ng f e at u r e

Navigating funding

site for one-to-one meetings within the Investment Clinic. If you’re looking for an Angel rather than institutional investment and want to get highly valuable feedback or even win funding, the Pitching Challenge gives you the chance to showcase your idea or business to selected private investors. Companies you could meet include Angel Investment Network, Coral Reef, Crowd For Angels, Earlsfield Capital, EDGE Investments, Envestors, Beringea, Granted Consultancy, London Business Angels, NatWest, Asset Advantage, Oxford Capital, ScaleUp, Startup Funding Club, Cambridge Capital, Oxford Early Investments and NOR Capital. Speakers such as Matt Adey of the British Business Bank will introduce you to a range of funding solutions while Jenny Tooth of UKBAA, Tim Hames, of BVCA and Tim Mills of AngelCoFund will explain how you can secure equity funding. If you’re looking for inspiration, Julien Callede, founder of, David Murray-Hundley, widely known as The Grumpy Entrepreneur and Mark Wright, winner of The Apprentice TV programme, will be talking about their entrepreneurial journeys and sharing advice on how to find best funders for your business while entrepreneurs like Chelsey Baker, business mentor, and Mike Greene, who featured in Channel 4’s Secret Millionaire programme, will share their tips on pitching for funding and planning for success. So, if you are an entrepreneur, and want to learn about the best funding options for your business, meet industry experts, receive bespoke advice from top investors and get noticed by a range of funders then join us on February 23 for the Business Funding Show 2017 and visit for more information.

How the Business Funding Show is helping entrepreneurs make sense of the plethora of funding paths available to them and brush shoulders with top investors


ccording to the Office of National Statistics, over 600,000 companies were incorporated in 2015 but over 240,000 of those will close down within the first three years. There are many reasons for this, but cashflow problems tend to be a recurring theme. Successful investor, entrepreneur, and Channel 4 Secret Millionaire Mike Green hit the nail on the head when he said “It’s not a lack of sales, but rather lack of cashflow [that’s] killing a business.” But SMEs are the backbone of this country’s economy. According to the Federation of Small Business SMEs accounted for 99% of all private sector businesses at the start of 2016, employing 15.7 million people. Supporting these businesses means making sure that they get the funding they need. This is why London hosted Britain – and Europe’s – first ever Business Funding Show (BFS), exclusively aimed at SMEs. Originally planned as an annual event where businesses can find their best funding solutions, it quickly turned into a series of events that introduced entrepreneurs to top funders, helping them to find out more about various funding avenues. Hosting 20 events in its first year, BFS managed to bring together over 3,500 SMEs and over 150 lenders and investors, allowing entrepreneurs to obtain an independent point of view to help them make funding and growth plans strategically. Speakers and exhibitors represented have included the British Business Bank, NatWest, Angels Den, UK Business Angels Association, Experian, the Intellectual Property Office, Crowdcube, 74

SyndicateRoom, Ratesetter and Funding Knight. Among the featured speakers were top entrepreneurs like Richard Reed, co-founder of Innocent Drinks, Lord Bilimoria, founder of Cobra Beer, and David Buttress, chief executive of Just Eat. Adam Tavener, TBC at Clifton Asset Management, was pleased with help he received at the show. “Trying to choose between 95 funders without such a resource would be a daunting task for even an experienced professional, which is why in the future most SMEs will acquire the financial support they need through these types of platforms,” he said. “It just makes sense.” Meanwhile, James Sproule, TBC at IoD, believes there’s never been a better time to access finance. “Interest rates continue to sit at historic low, the UK has one of the deepest markets for alternative finance in the world and the government has taken steps to link up those who have been turned down for bank finance with alternative finance platforms,” he says. Echoing their enthusiasm, Andrew K, owner of TBC, praised the event’s “inspirational speakers, who communicate their honest reflection about the reality of the investment puzzle”. Also praising the quality of the speakers was Lisa N, entrepreneur (TBC): “I was impressed by the broad range of speakers tackling topics from different perspectives,” she enthused. This year, the show will be an ideal opportunity for someone looking to meet lenders and investors, who will introduce participants to a range of funding options. Top VCs will be on


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Join UK and Europe’s only Exhibition exclusive to Business Funding To meet top Lenders & Investors and learn from Industry Experts

9.00am to 9.00pm | 23rd February 2017 | East Wintergarden | Canary Wharf | London

Tickets available at This is your chance to: Connect with the Leading finance-providers! Pitch your business to Angel Investors Get advice from Venture Capitalists (VCs) & Private Equity firms Engage with top Bankers and Alternative Funders

Exhibit to get noticed by High Net Worth Individuals Meet representatives of leading Crowdfunding Platforms Choose your best funding solution amongst many options Learn the secrets of successful entrepreneurs

Featured Speakers & Companies:

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THE CRUNCH The stats that matter – and some that don’t


of VCs think governments are unprepared for the rise of the machines


of VCs believe AI will destroy millions of jobs



times more Americans renounced their citizenship after Trump’s victory than when Obama won in 2008

$532m was invested in UK fintech in the third quarter of 2016


£100,000 how much an hour of IT outages can cost SMEs

was invested in Chinese fintech in the third quarter of 2016


of entrepreneurs say networking is vital to success


was invested in US fintech in the third quarter of 2016

3,633 1.1% £40bn 90% UK businesses went bankrupt in the third quarter of 2016

per year is lost by the UK economy due to a lack of sleep


of companies use open source software

more companies entered into insolvency in the third quarter in 2016 compared to the same period in 2015

$1bn was paid out by YouTube to the music industry from advertising in 2016

Sources: RAND Europe, The Insolvency Service, Economist Intelligence Unit, Innovate Finance, Rackspace, Hitachi, Redcentric, Reuters, YouTube, Bambridge Accountants, The Slush Report, Elite Business.

is how much Philip Hammond pledged the government would annually invest in tech innovation


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Elite Business Magazine Jan 2017  

COOKING UP A STORM: From an inauspicious start flogging recipes at a Shoreditch antiques market, Timo Boldt has grown Gousto into a thriving...

Elite Business Magazine Jan 2017  

COOKING UP A STORM: From an inauspicious start flogging recipes at a Shoreditch antiques market, Timo Boldt has grown Gousto into a thriving...