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.
I got a bit fed up of Medium. There’s something about the format that encourages long articles structured in a particular way. I found it very limiting and realised it was stopping me from writing anything at all. It also started to feel very click-baity to get people to pay the monthly subscription and I wasn’t finding anything worth reading. So I’ve moved everything back to WordPress.
In case you’re thinking of doing the same, I found that the best way of migrating all my posts was to open a free account on WordPress.com and use their Medium importer. I then exported everything from there in WordPress format (actually in two goes because the maximum file size is 2Mb) and then used the WordPress importer on my own installation of WordPress here. Took me a while to work out but I think everything has moved successfully.
Bad Blood is a fantastic book and an amazing journalistic feat. The drama is still playing out as I write this with the main characters facing criminal charges and likely to stand trial this year. Like Enron: the Smartest Guys in the Room it’s a brilliant set of lessons about how a company can be rotten but the system of investors and regulators forget to trust their sense of smell. And like the Enron book (in that case Bethany McLean who wrote an article in Fortune magazine posing a simple question — how, exactly, does Enron make its money?), John Carreyrou helped uncover the scandal — he’s part of the story, which makes it an even better tale.
It’s particularly interesting to me because in one version of the story Theranos could have been an amazing tech for good impact investment. It made me wonder how we would have reacted at BGV — would we have spotted the fake?
Theranos was founded in 2003 by 19-year-old college dropout Elizabeth Holmes. Her dream was to revolutionise medical diagnostics by creating a simple, cost effective way for people to get their blood tested from a tiny sample. If she had achieved that, it would indeed have had a huge positive impact on the world. The trouble is that it’s a very hard thing to do.
Holmes was joined at the helm of the company by Sunny Balwani, who made some money in the first dot-com boom and was also her boyfriend. Bad Blood is littered with examples of them making terrible mistakes and hiding information from people (including that they were a couple). Their paranoia was extraordinary — to the extent of fitting bullet proof glass in Holmes’ office and having people trailed when they left the company. What they were covering up for was that the technology they promised didn’t work.
In the business it’s known as ‘fake it til you make it’ and all tech startups do it to a degree. You often have to convince investors that what you’re going to do will be revolutionary before you’ve actually built it (after all you need their money to build the thing). One famous example is the video that the Dropbox founders created to judge whether or not it was worth building the software in the first place. But raising peoples’ hopes of better document synching is one thing — raising the hope of quick, painless diagnosis of diseases is another. Richard Waters is great on the subject in this FT piece.
All the signs were there with Theranos. But hindsight is a wonderful thing and there were many investors, customers and journalists who were duped. Holmes and Balwani got plenty of things wrong but it was the system that allowed them to gamble with peoples’ lives that was really rotten — and it still is.
It’s a strange story when Rupert Murdoch comes out of it pretty well. Despite losing the whole $120 million he’d invested he refused Holmes’ attempts to spike the story at the Wall Street Journal which he owned.
One aspect of the story makes me think we wouldn’t have fallen for it at BGV is that most of the investors seem to have made their decisions based on who else was involved. A classic case of groupthink. We’re always the first investor so don’t have the ‘luxury’ of seeing who else is investing. We also don’t invest very much to start off with so we get to work with teams (usually in very close proximity) before we decide to invest larger amounts. I’d like to think we would have worked out that the Emperor wore no clothes in this case. And finally we’re very sceptical of ventures that insist on secrecy — we think there’s an important link between true tech for good and openness and transparency.
2018 was the year of tech for bad. An annus horribilis for the reputation of the big tech companies and mistrust of the technology industry. I fear there’s more of that to come this year with new revelations and scandals.
But on a more positive note, we’ll see tech for good continue to grow in 2019. At BGV we meet more and more founders wanting to solve the world’s most pressing social and environmental problems and that’s why I’m still optimistic. If there is a market correction (aka a crash), tech for good companies will be the ones that prevail. The motivation of the founders and teams is just so strong.
Here are a few areas that could be interesting this year.
More fintech for good
Now that the hype cycle of blockchain has started to pop, we’ll actually see some useful and beneficial applications of distributed ledgers. I have to admit we usually groaned when teams tried to shoehorn blockchain into their applications to BGV in the past, but I’m more interested now it’s less sexy.
The plastic problem is much worse than people thought and pressure on companies to replace plastic in their packaging and products is intense. Our own Panda Packaging is part of that charge.
Agritech will grow
Agriculture is responsible for about a quarter of greenhouse gas emissions and lots of old techniques for increasing output seem to be coming to the end of the road. We’ll see more meatless foods being created (animal production is accounts for 70% of agricultural land use) and completely different ways of growing crops. BGV company LettusGrow is doing great work on this and Farmerama is a fantastic way to learn about new approaches to farming.
WorkerTech starts to work
WorkerTech really seems to be growing in profile now. As precarious work (sometimes caused by technological change) has grown so have the effects on income security, health and mental health. We’re seeing more and more good ideas for ventures to use tech to help tackle this. Organise, LabourXchange and WorkerBird are just three.
More chief ethics officers
While ‘what’ you do is important in tech for good, ‘how’ you do it is just as vital. Big tech companies are starting to do this by hiring new people to set policy and interrogate the way that products and services are created but it’s important for startups as well. New frameworks to help are beginning to emerge.
Funding options diversify
While the way we tackle social problems and start businesses has changed rapidly over the past decade, traditional forms have finance haven’t (think bank loans, grant making and even venture capital). I’ve got a feeling there will be greater diversity of funding models for tech for good in the future. Take a look at the Indie.vc model for one early sign of new approaches.
2018 was the year impact investing started to reach a much wider audience in the investment world. It went from the occasional mention in the media in previous years to a torrent of speeches, events, announcements and even billboard advertising campaigns, particularly from big financial services companies. It all kicked off when Larry Fink (CEO of Blackrock, the world’s biggest asset manager) used his annual letter in January to say that in the future they would take social purpose into account in the companies they invest in.
Less policy, more practice
This might be overly optimistic, but I think 2019 could be the year that the words and policies begin to translate into practice. I’d like to see some of the financial services giants start to make real investments and be able to say how much capital they’ve put to work to make the world a better place. It needs to be more than impact wash though and live up to the definition:
“Impact investments are investments made with the intention to generate positive, measurable social and environmental impact alongside a financial return.”
Charities get their houses in order
I hope that more big charities and foundations get behind the idea of 100% impact investment portfolios for their endowments. It’s shocking to me that we often ignore the impact of what a charity does with the money in its endowment but looks at every detail of the money that it gives away. It just doesn’t make sense. It’s possible that many large charities are doing more damage with their money by investing it in oil, tobacco, arms, gambling and so on than they are doing good with the money they get back from those investments (which may well be negative this year as well!). I hope they change before we see more scandals. There are some great networks like the SIIG for charities and foundations who want to learn more and I hope we see those continue to thrive.
BCorps continue to grow
I also think the BCorps movement will continue to grow in 2019. It’s just common sense. The framework the B Impact Assessment gives is excellent and the community of business that have certified gets better and better. I think in 2019 we’ll continue to see BCorps getting investment and be acquired by larger companies, which will attract more good companies to the community.
Unfortunately, I think the impact investing sector is now getting to a scale where there will be a big scandal at some point. My guess is that it will come from the world of very rich people dabbling in impact investing through vehicles they’ve set up themselves. The attitude has been wrong there for a while. Will it be a Bad Blood style unwinding of the story of a large impact venture or fund? I’m not sure. I should stress that I have no inside information — this is just a hunch. It will be interesting to see how the sector responds to intense scrutiny.
Don’t forget who this is for
2019 will almost certainly be a year when the world needs impact investing more than ever. If Brexit happens it will disproportionately hurt people who are already hurting. Climate change seems to be even worse than we thought and will affect poorer people more severely. We absolutely need to ramp up impact investing to tackle inequality and try to halt the damage we’re doing to the environment as soon as we possibly can.
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.
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.
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.
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.
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.
Believe it or not, I was a teenage heavy metal fan. Growing up in the Midlands I had the albums, the posters and the t-shirts, but never the long hair and tight trousers — I don’t think I could have pulled those off. It’s weird looking back and realising that all the music was on cassette and vinyl. It makes me feel very old.
Anyway, one of my favourite bands was Iron Maiden and I’ve just finished lead singer Bruce Dickinson’s autobiography ‘What does this button do?’ which is a lot of fun. I’ve been listening to the audiobook (which Bruce narrates himself) on long drives and on the bus and tube when I’ve had a chance. There have been many moments when I’ve struggled not to laugh out loud and I think my fellow passengers have wondered what was going on.
Alongside the Spinal Tap style antics that I think every band of the era went through, the thing that comes through is the incredible work ethic in the band and constant experimentation. The characters are just fantastic, co-manager Rod Smallwood comes out of the book very well and sounds like a bit of a legend. Metal is a peculiarly British thing. Its origins are in the Midlands in the 60s and 70s but it went on to influence the whole British music scene and had a huge effect on the US as well. This radio documentary is ace if you ever want to know more.
While there’s a lot about the band in there, most of the book is about the things Dickinson has done outside music. He’s kept himself busy to say the least. He’s been a world class fencer and created a best selling beer for example but his real passion is flying. He started out flying small single propellor planes and over time became a qualified airline captain. Most recently flying the band and all their gear around the world on tour in a Boeing 747. There are long passages about why he loves it as well as a few terrifying near misses.
Dickinson makes an unusual decision for an autobiography to not even mention any relationships or kids. There’s an afterword that explains why but you do notice it. It’s almost a work memoir rather than a life memoir. I’ve seen other reviews that criticise the book for that — saying it feels like he’s hiding the real him — and I do agree. Nevertheless it’s a fantastic book and well worth a read — not just for teenage metal fans.
As I write this it’s unclear whether the current British Government will survive. Amidst the chaos, spare a thought for the civil servants who have to keep the show on the road. They’re incredibly important.
For a description of why their expertise matters, read Michael Lewis’s new book The Fifth Risk. It’s terrifying. There’s no other word for it. It examines what’s been happening in the transition from the Obama to Trump administrations.
Lewis interviews people who worked in three of the most ‘boring’ and misunderstood government departments — Energy, Agriculture and Commerce. Actually those departments are responsible for nuclear safety, the US food supply and predicting the weather — including tornados. Without their expertise and knowledge, the US would be an extremely dangerous place.
You could sum up his conclusion on the machinery of government as ‘I think you’ll find it’s more complicated than that’. It takes dedicated, intelligent, experienced people to make things work. The implications of the complete failure of Trump’s people to understand this are scary but perhaps the worst is the nuclear threat. That’s where the title of the book comes from. The first four risks rattled off by the person who used to run nuclear safety are fairly obvious — a dirty bomb, a broken arrow and so on. But the fifth risk is ‘project management’. There is no evidence that the Trump team understands that and good people further down the organisation are leaving in their droves.
Fortunately, we have far fewer political appointments in the UK so the majority of the machinery of Government remains when you have a change of political leadership. I know ‘experts’ are out of favour at the moment, but I for one am very glad they exist.
It’s struck me for a while that there are similarities between really good investors and great investigative journalists. The most obvious similarity is that they both ask good questions but I think there’s more to it than that.
As a journalist you have to uncover a story that nobody else has told. You have to zig when others zag, not just to be contrarian but because you believe in the importance of the story even though nobody else might at the time. I’ve lost count of the number of movies where journalists have to convince their editors that the story they’re working on is worth pursuing (why is it that editors always come in for stick?). Journalism is often a fairly lonely business in the early days of a story. You might get a big team working on a story once it has grown but when you’re finding out about it for the first time, it’s one or two people.
There’s also their role in uncovering information. Both professions rely on hard facts and those facts might not seem hard when you first come across them. In the case of journalism, it might be that somebody is trying to hide facts from you. In startup investing, it’s often that even the founders are struggling to spot the hard facts themselves. It takes pattern recognition to notice when things are really important and when things are inconsequential.
Then there’s the importance of telling the story in both professions. For journalists that’s obvious — if you can’t tell the story well you’re not going to get very far. But as an investor, the process you go through is one of helping founders to tell their own story to customers, other investors and the outside world. I think this is even more important for impact investments where the story of the positive social or environmental effect that the company’s product or service has should be an integral part of its value.
There’s a similarity in the temperament of great journalists and great investors that I’ve noticed as well. Both are hooverers of information — they read huge amounts and are constantly are looking for the next story/venture. They know that many of their investigations will come to nothing but all of them are good lessons.
“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.