Bad Blood


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.

What will be interesting in tech for good in 2019?

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.

Plastic alternatives

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.

What impact investors can learn from journalists

Image by C.A.D.Schjelderup from Wikimedia Commons. Some rights reserved.

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.

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.

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.

The best Five Books on anything


I stumbled across Five Books this morning. It’s a fantastic archive of interviews with people who recommend the best five books on their chosen subject. It ranges from Diane Coyle talking about the best economics books of 2016, through to Tyler Cowen on the best books about information theory or Jeremy Mynott on the best books about birdwatching. Whether or not you agree with their picks, it’s a real treasure trove with over a thousand topics covered so far.

It got me thinking about what my five books would be. I think I’d choose ‘values and invention’ as my topic at the moment (with a bias towards understanding how we can create the most positive social change from digital technologies) and my five would be:

  • The Lunar Men by Jenny Uglow is the story of the pioneers of the industrial revolution who met on the full moon each month in Birmingham in the 1760s to swap ideas and invent the modern world.
  • Where Good Ideas Come From by Steven Johnson is the best explanation of how we think innovation happens. Spoiler alert: it’s not the way that governments and big companies think it does.
  • What the Dormouse Said by John Markoff explains why Silicon Valley is a pretty confused place ethically. The mixture of military money and 60s counter-culture made for some strange ideas.
  • The Making of the Atomic Bomb by Richard Rhodes is the ultimate history of how the brightest and best scientists and engineers of a generation found their skills put to work on something that almost none of them thought was a good idea in the end.
  • Microserfs by Douglas Coupland is an ordinary (and very funny) tale of what it’s like to work for a technology company when nobody really asks why you’re doing what you’re doing.

Labor in the twenty-first century


I’m in America so in honour of my hosts I’ll skip the ‘u’ in labour for this post. Yesterday was Labor Day here which — because I had the day off — got me thinking about what work and labor mean today.

The nature of work and the way it’s organised are two of the biggest issues we face in the twenty-first century. Both are hugely intertwined with technology because very few jobs have been untouched by the information age and we’re now really starting to see changes in the way that work is organised, particularly because of the ubiquity of mobile phones.

This throws up some big questions about the negative impacts we’re seeing like conditions for workers in the gig economy, the debate about automation and the inequality created by tech companies themselves.

The gig economy companies know that they’re in the front line of the upcoming wave of regulation of tech companies that will almost certainly come. If that’s done well (big ‘if’ there) and we avoid monopolistic behaviour amongst the platforms I think things could improve.

Gavin Kelly has done a great corrective job on media hyperbole on how many jobs will disappear because of automation. It’s a risk of course but I agree with Gavin that it won’t happen as dramatically as some reports have said. There’s a big opportunity for automation to create better jobs if it’s done well.

Inequality is a much more difficult issue with no simple answer. I was struck by this graph which is an example of correlation rather than causation but striking nonetheless.


Fred Wilson has written about Union 2.0 and that’s an area I’m really interested in. At the moment though I’m not convinced that existing large unions are where the change is going to come from. They seem to feel they have a lot to lose and are unwilling to take big risks with new services. Ideally new unions should provide services for workers that have network effects.

I’m still to be convinced that UBI is an answer to rising inequality. I get the appeal of it but, as soon as you get into the detail, unintended consequences abound. I think the experiments in Oakland, Finland and Canada are great but I’m not sure they’ll give answers that are particularly transferrable.

At BGV we’ve been searching for and funding startups in ‘workertech’ for almost a year now and have found all kinds of interesting ideas. It’s been really great working with the Resolution Trust who care so much about the issue and have access to amazing data, particularly on the economics of modern work. It’s made me an optimist that things will change for the better as I’ve met so many people who want to make a difference in this arena but there’s still so much more to be done.

The genius of Parkrun

Photo some rights reserved by Darren Foreman.

We’ve been told we need to exercise more for years now, but finally it seems to be sinking in. While the stats for the proportion of people who are overweight or obese are still awful and the number of people who get little to no regular exercise are nothing to be proud about, there are more and more organisations catering to growing demand for physical activity.

Alongside teams we’ve worked with at BGV like GoodGym, Run an Empire and The Hard Yard, my favourite example is Parkrun. It’s been going since 2004 but has really started ramping up in the last few years and now operates in 15 countries with over a hundred thousand people all running a timed 5km on a Saturday morning just for fun.

To begin with we collated all results on paper and the finish tokens were washers from the local hardware store! But eventually we ramped up the technology, and so the parkrun registration and barcode result system was born.

It is a genius system — so simple but effective, which could be said of the design of the organisation as a whole. It’s completely reliant on volunteers and every Parkrun around the world has the same basic pattern. This leads to Parkrun tourism with people racing to see how many different runs they can do. I’ve got my eye on the busiest Parkrun in the world which is in North Beach in Durban, South Africa where they had over 2,000 runners last weekend.

I love going along to my local event in Mile End Park in London. There were over 400 people there this weekend and I don’t think that was just because the IAAF World Athletics Championships were taking place round the corner. There’s plenty of room to grow and I think we’ll see more and more organisations catering for the demand from people to get more active.

Tech for Good LPs

A different kind of LP…

It makes me really angry to see bad behaviour in the tech industry. Over the past year, there’s been seemingly unending stream of sexism, sexual harassment, bullying, and alleged fraud. Each time a new story comes out I want to scream — tech has so much potential but it will go to waste if people like this are allowed to shape the future of the industry.

One of the only good things to come out of the last couple of months is that a few investors in venture capital funds (normally known as Limited Partners or LPs) have spoken out in a way that I haven’t seen before. I was really heartened to see Mitch Kapor and Freada Kapor Klein take a stand — they did so with Uber (a direct investment) and then they did the same with 500 Startups (where they were LPs). It was the first time I think I’ve seen such a public, progressive, activist move from an LP — I think that’s a great sign and I wish more investors would do it. In general LPs don’t say anything about their investments, even to the extent of not really admitting where their money is invested, but venture capital is where the seeds of culture and behaviour are sown and LPs could have a huge influence.

We’re very lucky at Bethnal Green Ventures that all our LPs (Big Society Capital, Nesta and Nominet Trust) have invested in us because they want to see technology used for a positive social purpose and done so to the highest ethical standards. We’ve written it into our governing documents and they take a keen interest in all the decisions we make. We love having LPs who are there to keep us on our toes in terms of our mission and who will let us know very quickly if they feel we’re not living up to their expectations. Of course they’re ambitious for us financially as well.

I think this kind of tech for good LP should be the norm not the exception. Only that way will we change the tech industry down the line and break the biases and bad behaviour we’ve seen in the tech industry of late.