Grit, Angels, and the Truth About What it takes to Build a Brand- Joanna Jensen

0:14Hello and welcome to the Tomorrow Brands podcast where we explore what it takes to build a brand of tomorrow. I'm your host Ruth Vitock and today's guest is Joanna Jensen. Joanna built child's farm from her kitchen table. She was hunting for skincare that wouldn't aggravate her daughter's eczema, couldn't find anything, so decided to make it herself. Within a few years, it was the market leader in its category before she sold the business four and a half years ago. Since then, she's become an angel investor, chairs the EIS Association, and has written a book on what she learned along the way, Making Business Child's Play.

0:42This one's a masterclass in the unglamorous stuff that actually makes or breaks a founder, forecasting properly, knowing when to raise money and when not to, and understanding the difference between an investor and an advisor. Joanna doesn't pull punches, so fair warning, this is a straight-talking episode.

0:55Joanna Jensen:Let's get into it. Joanna, thanks so much for joining us today. Before we get into it, it'd be great to hear a potted history of how you got to where you are now. I've done a myriad of things in my time. I like to think I'm a jack of all trades and most definitely not a master of anything. But I started off, my career started by accident in an estate agency. I then went through to interior design. I ended up moving to Hong Kong, ended up working in the city, both there and then back in the UK, travelled the world and all the way through my travels, I was hunting for something. anything that could soothe my irritated eczema-prone skin.

1:32Joanna Jensen:And then fast forward to 2008, my little second daughter arrived and she had poorly eczema-prone skin. Off I shot down the pharmacist to go and sort her out. Nothing had changed since I'd been a child. So I took it upon myself to try and change that by creating something that was specifically for her sensitive and eczema-prone skin. Did that really in my kitchen table. Next thing I know, I've got a commercial business called Child's Farm. And then within a very short space of time, we became the market leader. Roll on four and a half years from that. The business has been sold four and a half years ago.

2:07Joanna Jensen:And now I stick my oar in when it comes to SMEs generally, so small to medium-sized enterprises. I work very closely with founders. I'm an angel investor. I chair the EIS Association. and I will do anything in my power to make sure that the world is a nicer and safer and more lucrative place for the entrepreneurs of Britain. You've also written a book. So it's called Making Business Child's Play, How to Build a Winning Brand. When did you decide to write it and who is it for? I decided fairly soon after I sold the business that I needed to do something because I spent so much time with people who were asking me the same questions and I thought there's got to be a better way of doing this.

2:51Joanna Jensen:And much as I would love to have a quick cup of coffee with everybody who asked me, I would be pretty busy and fairly full of coffee. So I thought, wouldn't it be easier if I wrote a book? Which I duly did, but I wanted to do it in a way that was not theoretical. It was actual and it was proven and showing people what I had done with my business and what it made a change to how quickly we motored through what we were doing or how easily more easily I could get stuff done. So that was the motivation for the book. And it is absolutely pitched to anyone. Anyone starting a business, it's got a very strong lean towards retail, because obviously that's where I come from.

3:32Joanna Jensen:But the same principles apply to no matter what your business is. It's guidelines as to all the stuff you don't know you don't know. Because you go into setting up your own business and you haven't got a clue. Even if you've worked for a big corporate and you're doing a breakaway to do something similar. The rules are very different when you're working for a big player who's got a loud voice and has got deep pockets. When you're doing it on your own, you've got Tuppence-Hapenny and Time is of the Essence. You need to know what you need to do. And that is the purpose of the book. And it's one of two.

4:10Joanna Jensen:The second one's coming out next year, which is all about scaling. And for that, I've whipped in the help of a lot of my female founder friends and other business friends who, again, can give this valuable insight into helping you go faster. Because what I don't want people to do is do what I did and spend six months trying to find something out when I can share it in six minutes. What's the one thing in it that you wish someone had told you at the start of your journey? Good question, Ruth. Probably that the journey is going to be about 10 times longer than I ever thought it would be. 10 times harder that, you know, that you can end up really not liking your brand very much because you are tied to it.

4:53Joanna Jensen:That's the reality. You set up on your own and no matter how much you think you can get this work-life balance and you can have your cake and eat it, you can't. These businesses are an extension of you. They're full of your DNA. And to keep going and to be successful, they need you permanently attached to them. And that's the reality. So when you set up your own business, go into it with your eyes wide open, which is this isn't going to be something you do Monday to Friday, nine till five. This is going to be every single part of your being. And you're going to find that your entire family is on the journey too, because that's the only way this is going to happen.

5:31Joanna Jensen:everybody's got to join in good times bad times roller coaster rides you're there together and funnily enough it just you know I'm forever saying how good this has been for my kids to understand what it's really like to grow a business from scratch and as we sit in an environment where we've got over a million 18 to 24 year olds who are not in employment or full-time education I I rather hope my kids have had a leg up, not by virtue of my success, but by virtue of the fact that they have been brought up around me working and telling them, no, we can't do this. We can't do that. I don't have time.

6:13Joanna Jensen:I've got to prioritise. I'm really sorry. If you want to play date, you're going to have to sort it out yourself. And my kids, I would say, are fairly robust and pretty driven. I saw a lovely LinkedIn post that you wrote this week about that, about being on holiday with one of your daughters and how for years you worked all holidays. And I think it's really nice to show that flip side of it because as working parents, probably more as working mothers, you have that guilt the whole time of not being around versus actually looking at it as a, what are you teaching them about entrepreneurship and what are they seeing from you working so hard?

6:45It's a really nice flip that you don't hear talked about as much. Yeah, I think at the end of it, I said, are you really sacrificing or are you building solid foundations to help your children through the rest of their lives?

6:57Joanna Jensen:Because, you know, they're only little titties for not very long in the great grand scheme of things. And they're hugely impressionable. And if your life is one that involves hanging around the swimming pool and eating chocolate muffins and having a nice time every summer holiday, well, that's what they're going to think that life is like. And I think taking them on that journey is vital to give them that oomph that they need, that tenacity, that drive, that ambition. Because when you're around someone who's ambitious and is driven, it's infectious, absolutely infectious. So I think, yeah, as you say, change the lens, just change the lens.

7:36Joanna Jensen:And I actually think, you know what, actually, I'm doing them an enormous favor because I'm showing them what life actually is really like. because I think part of the problem we have now is such a shock to kids. You come out of education and it used to be you'd walk straight into a job and now, of course, you don't. And you've got to find those things that make you shine and make you stand out. And as you know, I've got a university-age daughter and she's just filling her diary this summer with work experience and I'm not having anything to do with it. She's doing it all herself, using Mindmates and my address book, But she's just hacking into it and helping herself.

8:12Joanna Jensen:And this is what we teach them by being entrepreneurs and being hustlers and all of that great stuff. And look at that as being insurance, really, that your kids are going to get a jog. Was there anything you wanted to put in but held back on? Oh, absolutely. It was originally one book, but it was the size of War and Peace. And it's been split into two. because the idea was in one book, take them on the whole of the journey that I went through. And I've been able to do that by splitting bits. But you have to be careful in what you write because we live in a very different world. You have to be aware of people's sensitivities.

8:52Joanna Jensen:And when you are running a business, you're, I suppose, less aware and you're surrounded by people who are action-packed and want to get on with it as much as you do. And the thing that I probably didn't emphasize enough was the grit and the determination. that you need. And, you know, I'm going to be honest. I mean, I'm on LinkedIn a fair amount. I'm finding it really annoying now because I don't want to hear about you having a breakdown or, you know, that tough year you had and this time. Honestly, I don't want to be callous, but I'm not sure what value that's bringing to anyone. I'm just seeing a lot of self-indulgence.

9:30Joanna Jensen:And I know I probably sound like my mother here, but if you want to go out there and you want to win and you want to make it and you are competitive and you want to be a champion or whatever it is you do, stop whining. Because I can't tell you, I've never seen a champion tennis player or a footballer. I mean, football is slightly different. But certainly in equestrianism, which is a huge part of my life, nobody whines. You fall off your horse, you break the collarbone, you get back on again. And I think that attitude has changed so profoundly in the last five, 10 years. And I think we need to, there are some hard truths out there, which we seem to be nervous and shy about dealing with.

10:15Joanna Jensen:But we seem to be championing if somebody falls completely off the rails. And And I don't really understand that because everyone has a tough time of it. I mean, look, I'm one of those people that I just simply don't understand how you announce that your dog has died on Facebook. And people are announcing that their parents have died on Facebook. I mean, really? I just think we need to stop sharing. I mean, look, love me or hate me. I am a straight talking individual and I will say the stuff that people pussyfoot around and don't say. and I am very empathetic to a point. But if you are posting yet again about your dead cat and it's the 20th time in a month, my empathy has somewhat waned.

11:04Joanna Jensen:And we do have the ones talk about their pending birth, like the only person that's ever given birth before ever in the entire universe. But I can get over that because they're educating a whole generation. And I think, look, we looked in wonderful silence, didn't we? Nobody ever told anyone what it was like to give birth because then when we found out, it was absolutely fucking agony. We never told anyone. If anyone asked us about how's your work child rearing balance doing, you'd just go, oh, it's a shit show. And then what would we do? We would have a population of zero. I most definitely am from a different generation where you just carried on and you said, listen, the past is the past.

11:47I can't change it, but I can learn from it and make sure that the current and the future

11:52Joanna Jensen:is infinitely better. I mean, that's my thing. My children hate me and they say I'm not very sympathetic at all. And I just say, why are you wasting time thinking about what happened? Just learn what you did, understand what you would have done differently, learn from it and move on. So there we go. That is why I shall never be a counsellor. What's the thing you see founders complaining about? Well, as I said, that you have zero sympathy for. I mean, what's the most irritating thing, do you think? My goodness, the most irritating thing is I work till 6.30 tonight. I had to work on Saturday morning.

12:26Joanna Jensen:I mean, come on, kids. You know, I work, brought up two children on my own. And I'm not saying I'm a sodding hero here, but I brought up two children on my own whilst working seven days a week. And I average probably about five hours sleep a night. Get over it. Get over it. If you want it, go for it. I mean, tell me. I just watched the first episode of that Rafa Nadal series on Netflix. That guy was in agony for his entire tennis career. Get over it. I work with Paralympics GB. I chair their philanthropic arm. And I am meeting every month some absolutely staggeringly gifted para-athletes who have had the worst nightmares happen to them.

13:05Joanna Jensen:And lots of these people aren't born disabled. They have an accident or they have a disease that comes and whips away the use of their legs. One woman I met the other day, Emma, who is a canoeist. She's a complete nutter. But this woman trains 47 weeks of the year. And that's seven days a week. And then when she has her rest day, she gets sort of itchy knickers and doesn't know what to do with herself. But this is how you are an entrepreneur. You are an athlete in business. And that's the mindset you've got to have. And yes, you'll have your rest days. But I do find that there's kind of, oh, I had to work till five.

13:41Joanna Jensen:and we're seeing it across all businesses now. I was talking to my lawyers about it. And, you know, in the olden days, sometimes you just had to work through till the case was the next day. And they'd get, you know, I've got plotters at seven. And in the old days, they would have a QC, would have a dinner party and get trainee solicitors to come and be waiters and waitresses at the dinner party and listen to what was going on. Can you imagine the gems, everything that you would have heard? Can you imagine asking someone to do that now? We need to be more hungry. There is a reason why America is so strong in every single sector that they work in.

14:21Joanna Jensen:And I was talking to a friend of my daughter's who was at university in Washington. And she said, they are spending every day. They are getting something out there to potential employers. They are working their CV. They are working their LinkedIn. They are absolutely focused 24-7. Because they know they've got to get a job because they've got to pay off their university fees, which are phenomenal. I mean, you know,$70 ,000 to$100 ,000 a year. They walk away with real student debt, so they have to go out and get a real job. So I am that annoying parent that says, you're not the first person to have a baby.

14:57Joanna Jensen:I mean, but think of those people in Ukraine who were giving birth whilst the bombs were falling in a multi-story car park. and then tell me how dreadfully disadvantaged you are. So I'm old school and I'm proud of it. I was going to say, if you don't want to do that, you can just get a job. But maybe that's actually sounds like it's more of a fundamental mindset problem across the board. I think I'm very lucky. I see a lot of people that are youngsters who are really driven, really focused. My kids' friends, they just are go getters and go out there. But we still have a million people aged 18 to 24.

15:33Joanna Jensen:And if you want to really understand the impact of that, these are the people that are going to pay your pension. So we need to get them into work. We need to get them into apprenticeships. We need to really think about how we can change that. And I think the first thing that we need to change is the attitude of us, the parents. Because I remember I had one pair of shoes and a pair of plimsolls when I was growing up and a pair of jumper boots. And that was fine. You know, and a bike went everywhere on my bicycle. We need to stop sugarcoating everything for our kids. We really do because all roads lead to us, the parents, for not encouraging them to be a little bit tougher or putting in boundaries.

16:12Joanna Jensen:God, we've moved on to parenting by now. I know, I was thinking. So let's talk about money instead. Oh, no.

16:22So you mentioned you're an angel investor and you must have done a lot of fundraising in your time at Charles Farm as well, I imagine. Yeah, tons, tons, tons. And so when should founders think about taking money and what are the signs that they might not be ready for that?

16:37Joanna Jensen:Great question. In this stern age, the way it's tougher and tougher and tougher to find investor capital at the moment. So number one priority is bootstrap, and that is use your own funds to do it. The other sign of this is you create something and you've been self-funded. You still own it all. But also when you then go out and you look for investment, you've already shown that you've put skin in the game and that you've taken risk. Because what does entrepreneur mean? It means risk taker. You expecting somebody else to pay for your endeavors because you don't have any money is not being a risk taker.

17:12Joanna Jensen:That is just completely offsetting all of your risk. So to me, once you've got something which you can prove, you've got something, if you've just got an idea and, you know, super bouncy yoga mats or whatever it is, Prevost, get it made, get your prototype, start selling it at a farmer's market, start selling it at a school fair. But don't sit there and wait for the optimal time because there's never one. You just go out there and you make your market and you get people interested in what you're selling. And you look at your figures. If you do one thing before you set up your business, if you do not have an accountancy brain or you don't understand a balance sheet, Go and do a course that educates you on how to do that.

17:53Joanna Jensen:Because I will always say to someone, do you really want to put your financial future in the hands of a total stranger? Because you don't understand it yourself. It's not that hard. Learning your accounts is basically telling the story of your business. And you need to really understand that story. So learn your accounts. Then you will know how much you need because you will be doing your forward forecasting. Don't go in there and say, this is how much I need for six months. Expand out for three years. Be ambitious. Because if you don't know what that future looks like, you can suddenly find yourself in an absolute pickle where you don't have enough money.

18:32Joanna Jensen:And it's happened in a runway, which is really, really tight. So I would always say, have a three-year plan, but have detail in the first 12 months. And always in the early stages, have a 26-week cash flow forecast. You've got to know what's coming in and what's coming out. And you can work around that. Don't be shy if someone owes you money. Get on that phone. If they still owe you money after four attempts, turn up at their workplace or their shop or their home and demand it. Not with menaces, but just say, here is your invoice. You don't seem to have it, but great. Look, I've got this thing on my phone.

19:10Joanna Jensen:You can just pay me with a credit card now. Easy peasy, lemon squeezy. Do not be afraid to chase down that cash because if somebody's not paying your bill, you may as well just go and hand them a few£50 notes and be done with it. So not what you want to do. You will know by having your cash flow forecast and your growth forecast when you need capital to grow. As I say, try and keep it in-house as much as possible. And then if you've got that traction and you've got something that's proven and it looks to be in the right direction, that's the time to start talking to family and friends to see what they can do to help you.

19:44Joanna Jensen:And really, when you've got a stage where you can go from A to B, which is quite a largely, you need some significant capital to do that. That's the time to raise. But again, whatever you think you need for that three-year period, double it because it is never enough. And the one thing that pisses me off more than anything else is when I invest in a business and then six months invited to invest again. And six months later, I'm invited to invest again because people have got their financials upside down and inside out. So take your time, make them robust, make them available to investors so they can play with them themselves.

20:25Joanna Jensen:If you don't know how to use Excel, now's as good a time as any to learn. Because again, Excel will be your friend. And don't take offense when people say no, because maybe they just don't want to invest in, you know, pink knickers. That's just not their thing. Respect the fact that they have to make a decision. And people can get very enthusiastic initially, and then that enthusiasm can wane. again you've got to be robust and you've just got to take these rejections on the chin learn from them understand what you could have done better and go again and again and again and again because i've been there desperate for capital no bites at all none people saying oh you know come back in six months oh well let me know once you've got a listing in a main retailer you take it on the chin.

21:17Joanna Jensen:And in the meantime, I used credit cards and there's ways and means of doing anything. And I use credit cards and I think my total debt in the end was about 150 grand. But it got me to a position where I was going into Boots and Waitrose and had a 20 episode cartoon. And I wasn't driving around in a Rolls Royce, that's for sure. But I then attracted not only investment capital, but people who owned that capital who had a skill that would help me get to where I needed to go. The most quality problem you can have is that you outgrow your forecasts really quickly and you sell through much quicker.

21:59Joanna Jensen:And that is a justifiable reason for going out for more capital. Not hitting your target by a long shot is no reason to go and get more cash. You've got to sit there and you've got to learn from that and cut your costs. I mean, I had a business that had, was turning over 3 million, had 17 employees. I mean, really? I think we had 17 employees when we were turning over 15 million. You know, you've got to cut according to your cloth. And that means you are the bookkeeper. You are the supply chain. You are the CEO. You are the CFO. And you are the commercial director. And I am amazed how many people will spend money on stuff you don't need until you are international.

22:44When you look at a business and considering investing, what are the red flags and green flags? Red flags, if it's a very large cap table,

22:52Joanna Jensen:that to me is saying that they keep on raising and the people that they initially raised with are not reinvesting. I would need to understand why. Other red flags are abysmal forecasting. And I've seen it. I've seen really shocking forecasts where no effort has been put in and also no plan of understanding who the consumer is. My biggest red flag is really once it's gone through the founder and understanding their cap table, it's then how well do they understand who they're selling their goods or service or product to? And again, I am told endlessly, I don't need to know that. Meta knows. Seriously, if that's your answer, I would probably refrain from going to a professional investor and asking for them their hard-burned capital to throw down the drain next to you because that's exactly what will happen.