Welcome to the second series of Small Business Snippets, the podcast from SmallBusiness.co.uk.
Anna Jordan meets Timo Boldt, founder and CEO of recipe box service, Gousto. In this episode they talk ethics, personal data and the importance of managing yourself before you manage others.
Have a listen to it in the media player below.
You can also catch our episodes with:
- Entrepreneur and The Apprentice 2018 candidate, Jackie Fast
- Investor and former Dragon, Piers Linney
- Investment fund manager, Nicola Horlick
- Supermodel turned entrepreneur, Caprice
We’ve got podcast episodes from the first series looking at:
- How one business owner’s mental breakdown caused her to see trolls from her past
- How one entrepreneur hired a videographer to track their every move and build their business brand
- How funding a business led one entrepreneur to stress-related alopecia
- One entrepreneur’s first professional public speaking engagement
- Adapting to UK life and learning English before starting a business
- Securing seed funding
- Finding the perfect head of customer care
- Reaching a £1 million annual rate of return
- Boosting client numbers from 30 to 850
- Starting a brand new business from scratch
To find out more about Small Business Snippets, you can download the trailer.
Want to read the Timo Boldt’s podcast interview instead?
Hello and welcome to Small Business Snippets, the podcast from SmallBusiness.co.uk. I’m your host, Anna Jordan.
Today we have Timo Boldt, founder and CEO of recipe box service, Gousto.
He launched the firm in 2012 and it has been growing exponentially year on year. Earlier this year they raised £18 million collectively from health influencer Joe Wicks, Unilever Ventures, Hargreave Hale, BGF Ventures, MMC Ventures and Angel CoFund. In July, they raised a further £30 million to develop their artificial intelligence technology, bringing total raised to £100 million.
Boldt is also on the digital advisory board for Unilever.
Anna: Hello, Timo.
Timo: Nice to meet you.
Anna: Yeah, and you. How are you doing?
Timo: Very good, excellent.
Timo: What would you like to talk about?
First, I’d like to talk a little bit about the artificial intelligence side. I understand it is a substantial part of the business. There’s also a real emphasis on tech, so much so that you have a separate Twitter account for @GoustoTech. I was wondering – do you see yourself as a tech company as much as a recipe box service?
Timo: We see ourselves as a data company that happens to trade in food. We have always been on this huge, huge mission to be the most loved way to eat dinner and we can only really do that by harnessing the power of technology, transforming the way that UK families eat, plan, shop. So, technology is kind of the enabler.
AI for the past six, seven years has played a crucial role. And the idea is that when you open the app, you should see a completely personalised menu. I should see a different menu. We should only see what we really love to eat. I think that’s the power of AI integrated into the app and that’s providing real differentiation.
From a personal data perspective, how are the pages personalised? What data tends to be taken to personalise these pages?
Timo: The section is literally called ‘Just for You’. You open the menu and it has a selection of recipes on it that only you should see, no one else should see. You can still browse the entire catalogue of the menu, but you don’t have to.
What we do is pretty simple – we look through your history, we look at what you ordered before and we try to make a recommendation. We also try to look at similar customers, so pattern recognition and then trying to predict what else they might want and then offering that to you.
And those algorithms are the exact two types of algorithms Netflix is using.
How did you find the transition when GDPR came in?
Timo: Look, I mean, I think GDPR has caused a lot of increase in process. Directionally, I think it’s quite good for the customer. We definitely had to up our game in terms of process and understanding the legislation. I don’t think that it’s has impacted, at all, our ability to surface better menus and better value for the customer. We welcome it, it’s fine.
I’d like to move on to Dragon’s Den. You appeared on the programme in 2013, but unfortunately you were turned down by the Dragons. You were contacted by an investor shortly afterwards offering you a substantial sum. How did that fit into the expectations you had from the programme when you signed up to go on?
Timo: Yeah – as a young entrepreneur, I think you have to try absolutely everything to get attention and raise money. I hand-delivered 100+ boxes to journalists. One of the opportunities that emerged was Dragon’s Den. I had an enormously fun time going onto the show.
I actually got two offers on the show – one they didn’t show and the other one we rejected. Duncan Bannatyne became a customer after the show which is almost better than getting money.
And as you said we had a great offer from a group of angel investors. They’re amazing people – they’ve all spent their lives in the food industry. They added not only capital but lots of knowledge, helping us in the early days to set up the supply chain. You know, talking to farmers, making sure we source the best quality food. I think it was a big catalyst for us. We didn’t take the Dragons’ money, but it was an amazing opportunity and we had lots of fun.
Ethics play a big part in the business. It’d be interesting to know how you maintain those ethics throughout the supply chain.
Timo: We’ve always been on this mission to make the planet better off with every single meal we sell. In the early days, when I launched Gousto, I really wanted to find a way of taking the 40pc of food that’s wasted our system out of the equation, both in the supply chain and at customer level. By setting up Gousto we’ve really managed to take out food waste and that’s been a phenomenal part since day one. And it makes great business sense because you don’t waste food.
We are also extremely focused on plastic, on packaging. This year alone, we’re pledging to reduce plastic by 50pc and the team is on track. We’ve always had this massive ethos, or sustainability focus. Now that we’re larger, we employ people who really go deep into the supply chain to understand farmers’ credentials, animal welfare and so on. It’s very close to my heart.
I’m interested in finding out more about the food waste side. If you’ve got a certain demand for one of the meals on the menu. If you had leftovers – say you have potatoes, for example – you have a certain demand and have some left over, what happens to that?
Timo: What the clever guys are doing is that they are literally helping to come up with menus that reduce food waste to zero. One, there’s a huge focus on food forecasting, making sure we only buy what we really need.
‘There’s a huge focus on food forecasting, making sure we only buy what we really need’
But then secondly, we can really play with the menu, so that we can make sure that we only use the food all the time when it’s fresh and tasting the best.
You talked a little bit about sustainability before – and it makes up a large part of the brand’s image. As we’ve mentioned before, you’ve got Unilever as an investor and you’re also a member of the digital advisory board.
Unilever hasn’t always had the best reputation when it comes to sustainability. For example, it was named one of the most prominent plastic polluters in the Philippines [research from Global Alliance for Incinerator Alternatives] earlier this year.
When you were presented with the opportunity to partner with them, both on an investment level and on their board, what was going through your mind? Did you worry that it might affect Gousto’s company image?
Timo: Almost no FMCG (Fast-Moving Consumer Goods) company in the world has done as much as Unilever has done for sustainability. They are so driven by the topic of sustainability. Paul Polman, the former CEO, is leading the agenda and the charge globally. I really admire what they’ve done.
Are they perfect? No. Do I work for them? No. Do they ask me what they should do about sustainability? No. I think they are a force for good. They’re not perfect.
I think when I joined the Digital Advisory Board, I saw an opportunity to impact and influence and raise the agenda even further. But I’m not working for them in any way – I’m an advisor, I’m unpaid and I think we have to work with large business to really drive change.
It’s amazing if Gousto can change the world. But ultimately, we need Tesco, Amazon, Sainsbury’s and Unilever to have impact at scale.
Tell me more about your role on the Digital Advisory Board. What kind of things do you do in that role?
Timo: It’s an amazing board, they’ve got super-experienced CEOs from large companies. Unilever is spending £10bn on marketing per year and the big challenge is yesterday they got beaten up by Tesco, tomorrow they probably get beaten up by Amazon and Ali Baba. Everything is moving online.
And it gets even harder for them – their brands are getting cannibalised, competition is on price all of a sudden, the Chinese market is growing rapidly. It’s all e-commerce, it’s no longer in the shop.
I’m in a very humble capacity trying the educate the board around direct-to-consumer capabilities, our sustainability mission, that 100pc of Gousto’s revenues are online, how you build data science into your business model, how you hire tech people at scale.
I’m playing the tech advisory role, wearing my start-up hat.
In the past you’ve talked about the importance of growing yourself as a CEO within your business. What do you mean by that?
Timo: I’m a massive believer in the power of learning and being curious. I’ve done an Executive MBA, so at weekends I’d go to Cambridge to upskill myself. I’m becoming a certified coach right now, so I’m on a one-year coaching diploma course in the evenings and on the weekend.
I also joined other scale-up wards, so I massively believe in this philosophy that everyone should aspire to be the best version of themselves. For me, the question is: how can I be the best CEO possible?
Seven years ago, I didn’t manage anyone, today we manage 500 people. Tomorrow, we’ll manage 1,200 people. I need to constantly upskill myself, leading by example, then role-modelling to the organisation that you’ve got to invest in yourself and you’ve got to take time off to think about your own development. I think that’s super important as the work is changing so fast. Plus it’s a lot of fun.
I think it’s hard for business owners, particularly small business owners, to really take the time for themselves. How would you suggest alleviating the guilt that they feel a lot of the time and leaving some of the work to the people that they’ve employed?
Timo: Yeah, I totally think that’s true. Lots of people feel like they have no time. I mean ultimately, if you want to be brutal, busyness is some form of laziness. We’re all way too busy, but as a leader you have to get yourself out of the minutiae and the day-to-day. I think you’ve got an enormous responsibility to lead by example and help people understand how important self-development is – reflection, reflection practice – so I think it matters, but it is really hard.
Once a quarter, I try going off-site to only focus on my own development. And I probably spend 50pc answering my phone and another 20pc responding to emails so I’m not perfect. I’m trying really hard, but it is challenging.
If you have the right people in the business and you surround yourself with amazing people, people are the key to success. The more incredible talent you have, the more structure you have, the more you can afford to get out. If you feel guilty you might not have the right people.
You can’t be controlling. In my head it’s not about accountability, it’s about ownership. It’s about giving people autonomy and then cheerleading them. Your job as leader is to set the North Star and then to galvanise people – buy them cake, celebrate, collab. Do whatever you can to make them feel good, celebrating every step towards success. If they fail, build them up again. Focus them on the richness of learning from failure. But it’s not about the day to day and controlling every step.
The food industry as a whole is facing quite a few problems – not problems, more challenges – as we go into the future. Particularly with sourcing enough food, changing temperatures, all sorts of things. What kind of challenges do you see in the food industry and what advice do you have for an entrepreneur looking to start a business in the food industry?
Timo: The bigger the problem, the bigger the opportunity for entrepreneurs. I think grocery is a wonderful market for entrepreneurs to enter and to do good. If you look at the grocery market, you’ve got huge supermarkets that for the last 50 years have built a supply chain of 10,000 stores which after 50 years is no longer fit for purpose. Everyone wants to order food online, people pay a premium for convenience, sustainability and health are so important. I think there’s a big opportunity around how we sell to customers, how we fit into their life.
‘The bigger the problem, the bigger the opportunity for entrepreneurs’
I also believe that there are lots of issues on the supplying side, for example urban farming. In perfect conditions, you can grow organic salads and organic tomatoes using a fraction of the water that traditional farming uses, with none of the nasty chemicals. None of this is mainstream today, but in the next ten, 20 years, it’ll become mainstream and all of us will eat through those new ways of growing food and to me that’s hugely exciting.
Anna: The rise of hydroponics, growing food underground, things like that?
Timo: Totally, yup. But it’s in an embryonic stage right now.
Well, that’s it from me. Is there anything else you’d like to add?
Timo: The one piece of advice I’d give to anyone starting a business is to really focus on managing yourself before you manage other people. I think that’s one of my biggest learnings in building Gousto.
Having deep recognition of your own strengths and weaknesses, knowing how to handle your demons, solving your weaknesses, turning weaknesses into sources of energy and strength. You need to understand the ups and downs of the emotional rollercoaster of entrepreneurship. I think that learning this and building up the self-awareness and appreciation then allows you to have the energy to talk to other people and build them up when they’re down and to lead other people. But that to me is one of the biggest lessons I’ve learned.
To help our listeners, what would you say is your greatest strength and weakness? How did you go about realising that and managing it?
Timo: My strengths are that I like people and I’m a people person. I’d say that I’m 99pc extroverted. I have huge levels of energy – I never run out of energy.
From a weakness point, I’d say that I don’t pay much attention to process and how we get there. I’m more focused on the idea and empowering the right people and I think that can alienate certain people sometimes because they might be more interested than I am in the exact process of how we get there. Whereas I feel like if we’ve got the right people, I should cheerlead them and they figure it out.
So over time, if you look at our team that’s surrounding me, they all pretty much play to my strengths, they offset some of my weaknesses, they are amazing at process and structure which I’m not the best at. I think that if you’ve built a system that plays to your strengths, you’re absolutely fine to apologise for your weaknesses every once in a while.
Anna: That’s really good advice. Well, thank you for that Timo and thank you for coming on the podcast.
Timo: Thanks so much and that was super fun. Thank you.
Anna: You can find out more about Gousto at gousto.co.uk. You can also visit smallbusiness.co.uk for more information on artificial intelligence and improving sustainability. Remember to like us on Facebook @SmallBusinessExperts and follow us on Twitter @smallbusinessuk, all lower case. Until next time, thank you for listening.