BGV 2019 Impact Report

We’ve just published our annual impact and learning report for 2019. Some highlights include:

  • The portfolio achieved significant financial growth and scale of impact. Combined, our portfolio companies saw a 54% increase in revenues to £29.5m, and doubled their number of users to 12m. 
  • We made our highest number of follow-on investments in 2019 and supported our ventures in raising finance from both impact-focused and traditional firms. BGV ventures raised a further £16 million in 2019, bringing the total amount of additional investment raised by our portfolio to over £80m. 
  • In our team, 68.8% of employees identify as female (more than double the London VC industry average) and 31.3% of our team are from ethnic minority backgrounds.
  • BGV companies also exceed the UK tech sector average with regards to gender diversity. 46.5% of portfolio company employees identify as female, compared to the industry average of 19%. 
  • This year we aligned our impact methodology and portfolio reporting with the Impact Management Project (IMP), placing us in C6 of the Impact Management Matrix. 49% of our portfolio actively assess potential unintended consequences arising from their products, and  75% of those have developed ways to mitigate them. 

The report is based on data up to 31st December 2019 which seems like a long time ago now. But while things have changed radically because of coronavirus, they also haven’t changed at all. The social and environmental problems we’ve been trying to address are if anything more important and more evident. The megatrends that BGV is based on still stand:

  • More and more talented people will want to build products, services and companies to solve important social and environmental challenges.
  • More and more investors will want to put their money to work in line with their values.

GoodGym during coronavirus

The GoodGym team has done amazing things over the last few weeks. I’m chair of trustees at the charity and it’s been fantastic to see them quickly adapt their activities to meet the challenge of operating to support vulnerable people during the coronavirus outbreak.

Instead of the usual group runs and coach visits, runners have been helping people who are self-isolating with shopping and other tasks through missions. This is mainly being done in partnership with the British Red Cross who are identifying tasks but other frontline organisations can now also make requests. We’ve also had a group of volunteers sign up to help with the logistical co-ordination which is only possible because of the hard work that went into the technology to make it all work.

As a small charity we don’t have much in the way of reserves and it seems that we’re unlikely to get much from government schemes that are more geared towards companies at the moment.

If you’d like to make a donation to GoodGym you can do so here via Paypal (Gift Aid is added and there are no fees) or if you’d like to make a larger donation please drop me a line and I can put you in touch with the team.

Healthcare and tech for good startups

The FT has a piece today about how tech for good startups are working with the NHS during the coronavirus pandemic. There are a bunch of BGV portfolio companies mentioned as well as a few quotes from me. It’s been amazing to watch the DrDoctor story play out:

“DrDoctor automates appointment bookings, cancellations and referrals for more than 30 NHS hospitals across 20 trusts. Within hours, the team had started building digital tools that would allow hospitals to broadcast in large volumes about changed and cancelled clinics as all non-essential appointments were put on hold. At the same time, they started working on a series of remote consultation tools to allow people to reach their doctors by video or phone.  Three days later, the broadcasting function had been used to reach 150,000 patients. A week later, the remote consultation tools were rolled out to hospitals. “

It’s been a phenomenal period of innovation for healthcare. Hats off also to all those people who’ve been pushing this agenda for years. Frontline staff deserve all the support and love they’re getting of course, but it’s times like these that the technical plumbing gets really tested and if it weren’t for all the voices making the NHS more open to innovation it would have been much harder to adapt at such speed.

Some good stuff from 2018

In many ways it’s been a horrible year. The slow car crash of British politics, the gradual uncovering of how badly the tech sector has misjudged ethics and privacy concerns, the growing evidence that climate change is worse than we thought and the ongoing disaster in the White House have made for a year of depressing news. I hope all those things get better in 2019, but as it’s New Year’s Eve I thought I’d go through a few personal good things from 2018.

Food and drink

My favourite meal was in a small neighbourhood noodle and dumpling place in Hong Kong. I’d had a cold that I couldn’t shake off for a couple of weeks and their soupier version of dan dan noodles cured me.

Books

I read 30 books this year, not quite a book a week yet but not too bad. They ranged from the future of food to the history of grime music, taking in scandal in Silicon Valley and ultra running along the way. I think my favourite five were:

If I had to choose one, I’d say Nervous States. It’s bleak about the causes of Brexit and Trump but it’s the most sophisticated analysis I’ve read — and the fact that we’re starting to understand what’s happened a little better gives me hope that we can eventually sort things out.

Films

I don’t feel like I’ve watched anywhere near as many films this year. One that sticks in the mind though is my friend Tim Wardle’s Three Identical Strangers — an amazing story, brilliantly told. The other isn’t really a film — it’s a Netflix recording of a comedy show… sort of. Nanette defies all categorisation but is fantastic.

Travel

I’ve been to Italy, France, the Netherlands, Finland, Portugal the USA, China, Hong Kong and Singapore in 2018. I feel incredibly lucky to get to travel with work and agree with Michael Skapinker’s piece about business travel — it’s a privilege not a chore. The stand out experiences weren’t business though, they were backpacking around China by train and particularly visiting Chengdu and Xi’an — incredible food and the Terracotta Warriors are staggering.

Gadgets

My favourite gadget of the year has been my Garmin Forerunner 235 watch. It’s genuinely got me doing more exercise and paired up with Strava and Run an Empire, makes running a lot more fun.

Drinking problems (and some solutions)

Image by Samir Weres. Some rights reserved.

“It’s unpleasantly like being drunk.” 
 “What’s so unpleasant about being drunk?” 
 “You ask a glass of water.”

― Douglas Adams, The Hitchhikers Guide to the Galaxy

I’ve been thinking a lot about our relationship with alcohol recently. This article in the Economist about alcohol misuse in America particularly peaked my interest.

Between 2006 and 2010, an average of 106,765 Americans died each year from alcohol-related causes such as liver disease, alcohol poisoning and drunk driving — more than twice the number of overdoses from all drugs and more than triple the number of opioid overdoses in 2015.

The trend, particularly among women, minorities and the elderly in America is getting worse.

That’s not good because the health implications of alcohol are, as the article implies, very bad. David Nutt is one of the most interesting scientists in the field and in this programme for the BBC he talks about how alcohol would fare in the current testing regime for drugs were it to be tested for the first time today. His conclusion is that by current standards we would recommend something like one glass of wine a year.

The social implications of alcohol are no less problematic. The total tax take from alcohol is about £11 billion but the costs of policing Friday and Saturday night drinking hotspots is billions alone, not counting the impact of crime on citizens.

At the moment Brits drink more than Americans, but the trend on this side of the Atlantic is in the opposite direction. Each year we’re drinking less.

BGV portfolio company Club Soda’s Mindful Drinking Festivals and have tapped into this brilliantly. There are a whole host of new drinks companies springing up and the established brands are also creating new product lines that cater to people who would rather remember their evenings. It’s interesting to watch the large drinks companies realise they have a problem.

I do drink but I’m also acutely aware that alcohol is a habit and the amount I drink is socially influenced, particularly when it comes to work events. I totted it up and I go to nearly a hundred work-related evening events a year and alcohol is the norm. Although it was a bit awkward for us (as Nesta is one of our investors), I did like Laura from Club Soda’s public return of their New Radical Award. Nesta aren’t the only culprits of this but she’s absolutely right.

While we always make sure there are non-alcoholic alternatives at BGV evening events, we do still assume that some people will want alcohol. Perhaps we shouldn’t. This piece by Bethany Crystal at USV got me thinking — it sounds like a worthwhile challenge to create clear-headed evening events.

Should we say hello to aliens?


It’s an interesting, and possibly civilisation-ending, question. Should we go out of our way to let other alien civilisations know that we’re here, or try to remain very, very quiet? It’s an example in Steven Johnson’s excellent new book Farsighted — an expansive sweep of all the techniques that are available today to help us make better decisions.

The alien question builds on an article he wrote for the New York Times Magazine last year. It was about the projects that are searching for extraterrestrial life and those broadcasting messages in the hope of something hearing us. Over the last few years some scientists have become more excited about the potential for us hearing from other civilisations as we’ve found more and more planets in the ‘Goldilocks zone’ orbiting other stars in such a way that they are similar enough to Earth to support life.

But what if the response of aliens is to see us as a threat and immediately annihilate us? Colonialism would suggest that when people come and say hello, it’s not always good for the indigenous population. Of course, we can’t know exactly what will happen but one of the arguments in Farsighted is that fiction is one of the best ways of understanding and training for decision making.


There’s an amazing novel that does just that. I don’t think I’ve ever had such a mind bending experience through science fiction as The Three Body Problem trilogy by Cixin Liu. It’s about what happens when an alien civilization knows about us. The second book in particular is really disturbing. The Dark Forest in the title is the idea that in a universe of many millions of civilisations, it might not be a good idea for us to show where we are. The third book — Death’s End — takes it all to its logical conclusion.

The Three Body Problem completely stopped me in my tracks. I read all three books last year. It’s an immense achievement — there’s nothing quite like it. It was also the first science fiction book I’d read by a Chinese author but I’ve read a few others since and enjoyed them all. I’ve got no doubt it will become a classic and be read for centuries. If we last that long.

Is tech for good reaching the mainstream?


It’s ten years since we began running Social Innovation Camps, the precursor to Bethnal Green Ventures. We created them because we wanted to help people use their technology skills to have a positive social and environmental impact. Our eventual aim was to help tech for good become mainstream.

So how far have we come? Are we any closer to making tech for good the norm? Well, yes and no.

Industry events are a pretty good way of judging the temperature of the tech sector and I’ve been to a lot recently. My impression is that interest in tech for good has definitely risen up the agenda at the big tech events like Slush, Web Summit, SXSW and VivaTech.

I remember a BGV portfolio company founder telling me about their visit to Web Summit in Dublin four years ago. It was a pretty depressing experience. They were dismissed as ‘charity’ and there was even an out-and-out argument with the founder of an ‘adult’ dating app in another exhibition booth who was firmly in the ‘business of business is business’ camp. I don’t think his business is in business these days.

Thankfully those arguments are much less common these days. Tech for good startups and positive discussions about social and environmental impact are commonplace now. I’d say we’re at the ‘promising support act’ stage, usually on panels away from the main stage. The people who come along to the talks are those already in the tech for good sector as well as those who are finding out about it for the first time. Each time I get a note afterwards from somebody saying ‘I wish they’d do more of this stuff’ or ‘how do I get involved?’.

At Web Summit this week there were whole areas given up to social impact and a day of ‘planet tech’ talks which was very good. As I mentioned yesterday, the tech for good startups I met in office hours showed great potential.

Then you can look at what the big companies are doing. It’s great to see companies like Facebook and Google starting to support the profit-with-purpose side of tech for good. Both run programmes for tech for good startups in London. The Campus Residency for Google and LDN_LAB ‘Deep Tech for Good’ for Facebook. We’re involved in both.

Investors are starting to join the movement too. I’d say it’s mainly limited to new investors starting firms rather than existing ones changing strategy. A few of the mainstream VCs have made occasional investments in impact companies. But it’s only when a big successful VC decides to become an impact investor that we’ll have won that battle.

Sometimes I get asked what percentage of startups are ‘tech for good’ and I don’t have a good answer to that I’m afraid. All I know is that there are more than there were. My definition of a tech for good venture is one where it’s the explicit intention of the founders to have a positive impact. So being ‘medtech’ or ‘edtech’ doesn’t necessarily put you in the tech for good boat. You can create a startup in those sectors that reinforces existing problems or inequality — and isn’t ‘for good’ at all.

So there are many positives but tech for good isn’t mainstream yet. I’d give us 6/10. It’s a good start.

Stop hating, start helping

Image by hipxxhearts, some rights reserved.

If there’s one thing guaranteed to make me angry, it’s investors hating on startups. I’ve been at Web Summit in Lisbon this week and I’ve heard quite a lot of it. Usually it’s investors talking to other investors, make a negative comment about a particular idea or rolling their eyes about a founder or a pitch they’ve heard before.

Usually they do it in private but it’s also become more common in public. I’ve noticed a rise in investors posting moans about founders disguised as ‘advice’ — but really they’re just being disrespectful to the people who make the tech industry anything at all.

Not all investors are alike of course. There was a dinner for VCs on Monday night in a spectacular venue in Lisbon and I got chatting with an investor from a firm that I respect. We commented on how privileged our position is. We get to see the firehose of positivity of founders as well as exposed to the future before most people and we get to play a small role in helping the best firms make it. It’s no surprise to me that everybody wants to start a fund. Investing is a huge amount of fun and even though it’s not a very reliable way to make money, it’s a unique opportunity to have an impact. And the chances are that you’ll learn a lot too.

I met with ten startups for Web Summit office hours this morning — they were all trying to do brilliant things. The founders were passionate about education, healthcare or improving the environment. I wasn’t the right person to help all of them, but I hope I was supportive and positive right back at them even if I couldn’t help directly.

We should never forget the whole tech for good sector (and tech sector more widely) is completely reliant on founders. They give up a huge amount with often very little reward. They take the biggest risks. They feel the heartache of failure most acutely. I think it’s our responsibility to be positive and supportive.

Less snark, more generosity. That’s what I’m hoping for.

Be more Don

Don is about 65, has an (almost) full head of hair and wears a silver grey suit and monogrammed shirt. His ring finger is swollen from the workout it gets from the weight of his gold ring. His old mechanical watch looks out of place next to his black plastic Fitbit on his wrist.

Don is not in this picture — it’s from an NHS Confederation conference in 2010. Some rights reserved.

Don is the guy who works the room at a conference, quietly and effectively making new friends. He does everything by the book and it works — the book being Dale Carnegie’s ‘How to make friends and influence people’.

Don is a nice guy. He’s learned his charisma and conference personality over many years. He approaches me confidently but not arrogantly. He holds my eye without being creepy. He introduces himself with a joke that sets me at ease. He tells me a little bit about himself — he’s from San Francisco, he runs a small investment fund. He asks about me and finds the things that link us professionally. He offers me an informational gift (there’s this cool company he came across that does something I might be interested in). He tells me he’s a great fan of London and lists off all the football stadiums he’s visited (Tottenham is his favourite team — he pronounces it with three syllables rather than two). I don’t have a business card but I write my contact details on a scrap of paper. He adds extra notes about what I do and how he might be able to help. As he does so I see the giant collection of cards of other friends he’s made.

I’m not a natural networker at events. While it feels like I’ve been fundraising for almost all my professional life, I’ve only intermittently enjoyed going along to conferences and trying to make new connections. I guess I’ve been burned a few times by the people who are almost territorial about particular events being their world. Then there are those who go to events with a mission and if you’re not on their list they’ll be dismissive at best and rude at worst. It’s also hard to butt into a group and introduce yourself. There’s always that existential risk of rejection. It’s like a teenage angst.

But over the years I’ve loosened up. I’ve learned that there are lots of people at conferences a bit like me. If you open up your body language, smile and say hello to the first person you make eye contact with, very little can go wrong. I still find big events stressful but I recognise that people like Don make those big events easier for people like me. Over the years I’d like to be more like Don.

(Don is not a real person, by the way)

Technology, networks and increasing returns

W. Brian Arthur (image from Wikimedia)

One of the people whose thinking has had the greatest impact on me is W. Brian Arthur, the complexity theorist and economist who did much of the original work on the economics of networks. Brian was very involved in the Santa Fe Institute in New Mexico which for a while held a kind of mythical place in my mind — I read as much as I possibly could that came out of there as I realised that the work they had done was exactly what I was interested in. That led me to really try and understand the maths and techniques of network theory which has been an important part of lots of things I’ve worked on.

There’s a great podcast in the A16Z series at the moment of a conversation between Brian Arthur and Sonal Chokshi and Marc Andreessen from A16Z about what those papers he wrote in the 80s and 90s can teach us about the way that technology has developed and what it means for investment. Arthur argues that investing in technology companies is different from investing in other companies because of the interaction they have with network effects and the law of increasing returns (as opposed to diminishing returns in most markets). There are all kinds of reasons why particular tech firms end up dominating markets (Arthur’s shorthand for the combination of these is ‘luck’), but he argues that the overall phenomenon is inevitable and inescapable. Markets either become effective monopolies or they become commoditised — there’s very little middle ground in the medium to long term. Coincidentally this is why I think technology is so vital to impact investing. If impact investing were only to focus on markets that become commoditised, it would struggle to have a positive impact at scale and miss all the opportunities that new technologies present.

The podcast is well worth a listen and confirms my view of Brian Arthur as one of the most pertinent thinkers for the world we live in.