EUVC #286 Julia Hawkins, GP at LocalGlobe & Phoenix Court on building a healthcare franchise in a generalist fund

32:34I guess the first thing to say is that, you know, it's really important where we're based. So Summerstown, and I'll tell you a little bit about it here. We spoke about it earlier, but obviously, I mean, I think that it's an edge in the investments that we make. It's the poorest community in Camden, lowest mean household income, highest proportion of child poverty. If you live here, you are going to live 15 years less than if you live 15 minutes up the road in Belsize Park. I guess it goes without saying as well, like the kinds of institutions that are on our doorstep are phenomenal. So there is the Crick, which is just behind me.

33:15There is DeepMind, which is also just around the corner. We're about a 10 minute walk from Great Ormond Street. There is UCLH. There's Royal Free, which are leading hospitals in London, in terms of pharma companies, Merck, GSK, Nova Nordisk have moved in like literally here in this part of town. And so I think that we're at the epicenter of healthcare. But then as a location, it has also opened our eyes to what it actually means to deliver healthcare to communities. And so what happened during the pandemic, we started working really closely with our local primary school to deliver testing. We tried to understand what the reluctance and take up to vaccinations and testing was.

34:06We explored shared appointments. So we partnered with a researcher, Kamalini Ramdas, who's at LBS, who's like a world leader in shared appointments in terms of delivering information to cohorts of individuals. And I think we learned so much. And that's because we are based in Somerstown. And so, yeah, I mean, the importance of clear communication in healthcare is paramount. Can I ask you, just because you're saying, we did, we did, we did. We as in Local Globe. Yeah. As in Local Globe's team focused on healthcare. I think to many, in our audience, that's a bit baffling. This does not sound like the normal practice of a VC, right?

34:58Is this something that has been particular to your healthcare practice? I was about to say healthcare arm, vertical, or is that very much how you work? So when you do hardware, as an example, and now starting, you know, write that playbook. Do you think that you need to build the same type of dynamics there or will that be another? I think that COVID was a unique experience. And I do think that the relationships that we built during COVID in this non-transactional way really laid the groundwork for some of the relationships that have become really important for us when we then start to make investments and working with companies.

35:47But I would completely agree with you. And it's so funny because it mimics a bit what I see with emerging managers that are great in a vertical, right? Because they almost have the same story as what you just described. Yours was just incepted inside of a firm. But it's like I was in robotics. I'd been here for 10 years as a professor. I'd been at Universal Robots. Then I was at Mir. Then I helped with blah, blah, blah, blah, blah, right? And then kind of that one-man team or two, three-person team have that whole story that kind of mimics what you're saying, but it's just a story about their small first-time fund.

36:27And that explains why. And many emerging managers are incredibly exciting, right? So I'd be curious to ask you, how do you think about it now when you're then building out the deep tech or the hard tech? So I think there are some clear learnings that we have taken. And I think, obviously, the importance of establishing nodes so people and community have been really important for us. And I think that will be the same in hard tech. They won't be the same. There may be some overlap, but there may not be. So, for example, someone who's been really important for us in health care has been Jane, Dr.

37:12Jane Myatt. She's a co-founder of a GP practice here in Camden. She's a primary care doctor. And we started donating money from Phoenix Court Works to her practice so that she could spend one day a week developing these new methods of social prescribing. So social prescribing is like, you know, come to us to this and do this cooking class with us. Try not to take antidepressants, come do walks with us. Anyway, there are these new ways of delivering health care. And so we have a very deep relationship with her. And I would just say that she's also instrumental. She's also wants to know about she loves Acurex, by the way.

37:54But when we're looking at new investments, I'm always like, Jane, how do you think about this? How would this help you? And she's a, in addition to obviously doing the other DD work that you would do for any investment, we also have our own network of individuals who can support us. So that's how we think about it. And there are others. Obviously, the amazing people at the Crick, there is Parker Moss, who is ex-Genomics England, now ex-Sciencia. He's been with us from day zero. So Lord Pryor, the woman who runs now NHS London, Caroline Clark, Ektar Raja. These are names, I mean, they're just names, but they're also people who are like on the end of a phone call when we are thinking about making new investments or when we're working with companies and who can provide links into the system.

38:52And I think that's just, I mean, we have found that leaning into regulation and policy has been also a superpower. Some funds shy away from that. We have found it to be really important. Saul is obviously, he's a non-exec director on DSIT, which is the Department for Science, Innovation and Technology. like that's been it's been it's been really important for us to have those links with regulation and policy and community and then I would also just say that yes I mean maybe you can be slightly more strategic on this point but at the same time like we held our first community event when we were still based in Tile Yard which is up York Way I mean it's a it's on an industrial estate.

39:43It's not fancy at all. There were 10 people who came. It was about AI and pathology. And it was just something that I had spoken to Parker Moss about. He helped us get a speaker from Genomics England. I called an author of a Wired article who had written something about AI and pathology. And I said, hey, we're doing this event. Do you think you could come and share a little bit about your research? And he said, yes, we didn't. Yeah, we started somewhere. We just started. And then from there, you can become more strategic. You learn more about the themes like within healthcare that you wanted to go deeper on.

40:20And then you build communities around that. Emerging managers have been very important. You know, David, who set up Voyagers, who's got this whole community around healthcare. Chris, who's done Atria, Jamie, Creator Fund, like is he at outside like all of these they they and I know you have a specific question on on emerging managers and I think they play such an important role in particular when it comes to sourcing but also co-investing and so yeah and then now there are now we also have health focused LPs and I think that's going to be really important to ensure that your LPs understand and empathize with some of the peculiarities of the investments that you're making.

41:05And so I think that will be one of the things that we spend time on next. You mentioned Creator Fund. Patrick, as an example, also Ramsey from No Label, both close friends of ours. Great firms. Could you tell me a bit about how you think about the intertwining of the emerging managers that you bank with your own active investing in local group? On the one hand, we have Basecamp, which is a fund-to-fund program, which is an angel investor into emerging managers. But I would say that, I mean, I think that emerging managers, for me, they form just a really important part of the relationships that I really value.

41:56I've co-invested with Jamie and Creator Fund and APN. Jamie brought that to us. The same with Ramsey. Ramsey brought Spore Bio to us. and it was phenomenal to be able to get to know those founders and then be able to work together and backing those founders. So I think sourcing is obviously critical. Yeah, and I think there are obviously certain ways in which you determine which of the founders or which of the emerging managers that you spend time with. And I think it's just the same way that you build conviction in anything. You need to spend time together. You need to understand how they think, even like thinking like consistent updates as well and clarity of thought.

42:41I would say that both Ramsey and Jamie do really, really well here as well as David from Voyagers. And then when there is, yeah, when there is obviously a connection and you want to, yeah, you want to understand which of the companies that they are excited about and you want to get to know those. So it's very symbiotic. I couldn't agree more wholeheartedly. I always say it, and I think you put it in the right way when you said that we angel LP invest because, of course, it's always nice to get a big ticket. But what you really want from someone like you is the signal value of having been picked by someone who knows their game as well as you do.

43:27And that is exactly what you're in the position to be able to do as an accomplished GP or firm. You know what you're looking for because you're basically looking at someone who you would otherwise hire. So in that sense, it's the perfect high signal, low ticket investor in my view for an emerging manager to go after and try and secure as one of your early LPs. So just a big shout out to all of you at LocalGlobe for Latitude for building this and being outspoken about doing it. And a big recommendation for anyone listening in who are thinking about building a fund, try and get a senior GP on as soon as you can as an LP.

44:21I'd love to ask you about how do you think about the role of mentors in Venture? How do you practice it yourself? What are your guiding principles when it comes to helping the next generation of Venture growing up? I can maybe do this section where you're asking me to do a call out of someone because I think I wanted to call out one of my main mentors, which is Bruce Golden at Excel. I was fortunate enough to join a board where he is the chair. The company is called Moshi. It's a children's wellness product. You maybe use it because you have kids. They're not good enough at English. And I went to their website when I saw it in your notes.

45:04And then I thought, I'm going to check that out. And then I thought, fuck, I'm sure it's not in English. So I didn't dive further, but I thought I'd actually check it out. Well, I don't think it matters. Well, maybe it does matter. Yes, I mean, we listen. It does because there's quite a bit of stories in there. And my son is actually a bit maybe on the spectrum of ADHD, kind of like maybe someone else in his family. uh so for that reason it would be super cool to have something that would help him relax and yeah have a tutor he's a mish on our team mish on our team listens to the stories he thinks that they're great um yeah anyway uh i guess just a bit of context on bruce you know he's a phenomenal investor he's been with excel for many years he was in london he's now based in san francisco He has huge conviction in this children's wellness space.

45:58He's typically a B2B SaaS investor, but this is obviously a consumer subscription business. It has been through many pivots. It started as Mind Candy. It then became Moshi. There have been leadership changes, you know, all of the ups and downs of company building. And I think what I learned from Bruce was what it means to have conviction. like very, very long-term thinking. He is a phenomenal communicator. His clarity of thought is unparalleled. And I think, you know, how he acted in very tricky times, both, you know, moving quickly as well as slowly when needed, and how he managed these situations with such grace, with humility and with, yeah, just huge empathy for the people that we're working with, I think for me was a masterclass in how to be a great investor.

47:03And so what I think about is, you know, I would hope that at some point in time, I can repay my debt of gratitude that I have for Bruce for someone else. And that I hope at someday I will have the experience to be able to share what I have learned and to have other investors work alongside me in the same way that I was able to work alongside Bruce. And so I guess, yeah, how do I think about that? I think mentorship is hugely important. And I think that you learn so much from co-investing with others and from working through challenges together. And I think that those are the moments that you have the deep connections with co-investors where you really understand the extent to which you are aligned and how you work through challenges, like I've mentioned.

47:56But yeah, there are in particular, I think there are women that I spend time with and want to see how I can help in any what way, whether it's thinking through challenges like this company is going through founder challenges or this founder breakup what what do i know about that i've actually now seen a couple of those happen specific challenges whether it's um whatever it might be making yourself available i think is the way to yeah it's it's it's the way to pass on that baton and what you've learned so far

48:38you mentioned women in venture there we're seeing quite a few pieces talking about an exodus of women from venture there's of course multiple reflections and and thoughts around why why that is some of it being that well we're seeing a weeding out of anyone who doesn't have a very, very strong track record because funds are calling. And if you haven't been a venture for a long time, and it's unfortunately a newer trend that we would have more diversity in the industry. So there is some natural, harder effect from the fact that we have funds downsizing now. And then I think there's also some that describe it as that there are many women that have fallen out of love with venture from having gone through the period that we have been in after tech reset and then seen what might be called the uglier side of venture.

49:38And then all of a sudden, everyone aren't as nice friends as they used to be. I'd love to ask you how you think about this exodus. Do you see it as real? I think there are always going to be people who are leaving for whatever reason. I guess that the question is if it's systemic. I do think that it's harder for women in venture. And I think the stats that, you know, the European, the state of European tech report shows, shows that it's not improving for women. It's not improving for black people. And so I think you have to have real staying power and real conviction that this is something that you want to do.

50:23And so I think that is the true challenge for individuals. From our perspective, I think the way that we think about, I mean, hiring for our team, for example, or even what we recommend for our companies is like for short lists. So top of the funnel, we want to see, you know, 50 % women, 20 % black. And yes, you can run a fair process after that. I mean, and I think this is for us as a fund that are expanding, we're not contracting. And we have deep conviction in the European opportunity. So I think, I mean, it's really difficult for me to say what it's like at other funds or the individual reasons why people are leaving.

51:10But I think that's how I think about it, that the diverse teams, they make better decisions. They perform better. They communicate better. we as a fund are really committed yet to ensuring that those that those beliefs and that our team is a representation of the future that we want to see and that's I mean that's also why why Saul started Newton I'm a Kauffman fellow and I was really really proud to be a Kauffman fellow class 18 it was very different to how the classes are structured today we had 20 people in the class but I think we were nearly 50 % women. But at the same time, Kauffman Fellowship costs, I think 80 ,000 pounds a year at the time.

51:58I was so lucky. Universal Music paid for my Kauffman Fellowship. They said, you think you have this great idea? Well, we need to help support you. I was super lucky. Like, I guess Newton Fellowship is obviously much more accessible. On the other hand, there are more people. It's bigger classes. but again, it's enabling, you know, giving people a taste. Like, is this something for me? Is this something that I'm excited about? Is this something where I think I can make a difference? Whether it's as an investor, as a founder, as a whatever it might be, just giving you a taste of the innovation economy.

52:37And so I think those two aspects are, I guess, maybe more my personal experience and then how we think about it on a macro basis. Now, Julia, I want to ask you to go into your three biggest learnings from the last 10 years in your life. I know this is such a tough question. Yes, we're all about the tough questions here. I really had to think hard about this. But for me, I would say, one, values. And I guess also to caveat, 10 years ago, I had not yet had my daughter. I was still working at Universal Music. And so really, the last 10 years, I think, have been really important from a growth perspective for me.

53:26But the things that I have learned over the past 10 years are, one, the importance of articulating your values and using them as a way to govern decision making. You can obviously have your personal values, but you also need to understand your firm's values. And I think the fact that we have very clearly articulated values, which are around conviction, empathy, partnership, openness, trust, and equity, being able to use those in situations that are challenging means that you can ground the decision in values and you can really explain why you want to do something versus not. So that's one. The second one is about the ability to turn poison into medicine.

54:17And I think for me, this means that your biggest challenges will become your most important teachers, and winning over these challenges will be the most rewarding progress you can make. I feel like I am able to point to countless of, not countless examples, but there are many examples where I have seen this happen. And so I really take that with me every day. And then the third thing, which is more investor specific, but it's about actually having conviction in something feels uncomfortable for me. Other people, or I guess what you may see from the outside is that, you know, VC being quite an alpha game where you have conviction and it's all rah, rah, rah.

55:08Well, actually, for me, it's rather the opposite. like you can work and you can build conviction in something. You can work with your team. You can work through all of the different aspects to be able to make a case. But the largest outcomes will come from those bets where there wasn't consensus or where you may have been out on a limb. And for me, that always feels scary because you are obviously deploying capital and it feels scary. So those are my three big learnings. Yeah, but that's a very, very good point because having conviction sounds like a nice thing, right? But since we're also in a non-consensus industry, that means that you're having probably conviction against others.

55:57And that means your chips are on the table and someone else is saying we shouldn't put them there. my heart's beating my mouth is dry like yes that's what it feels like so now i want to ask you for your vc specific learnings for the last 10 years because i am sure you have a bunch okay so i think my vc specific learnings one i think founder splits are very common uh they're not a death sentence um so if you are new to the game please don't be too alarmed i think the founders who make tough decisions quickly and fairly, they move faster. Do what's best for the company are my learnings on that point.

56:43Don't optimize for valuation. Obviously, optimize for the right partner and raising at a high valuation doesn't equate to long-term success. And I think we're obviously starting to see that now in particular. I would say in terms of some of the healthcare specific learnings is that the pre-seed and seed company building blocks are actually similar across sectors, but healthcare companies also need to consider regulation and healthcare go to market much earlier. And then I would say that trust and agency are absolutely critical in the founder investor relationship. And I guess what I have learned is that if there is trust, then it means that you can come and you can share problems like founder splits much earlier on before it becomes a 999 issue or a 999 call.

57:37And agency just means that it's the founder's company. And obviously that we as investors can provide advice, we can provide thoughts, we can provide recommendations, but ultimately it's the founder's decision. And again, to the point of trust, if there's no trust, then there's no point in making a recommendation because the founder won't listen. And then I think discipline leads to freedom. I think this is just something, I mean, it's not from the last 10 years. I think that's something that I have thought about for a long time. But it's no surprise that some of the best founders I work with are, they have either deep religious faith, they're ex-athletes, or have worked in the military or ex-military.

58:29So those are some of my learnings. And those were incredibly interesting. And we should have done an episode just on those. But for now, let's get into the quickfire section. And now, the quickfire.

58:50Julia, first question. What advice would you give to your own 10-year younger self? Yes. Okay, so my own 10-year younger self, I would say this. Julia, there is literally no challenge you cannot overcome. You will have many disagreements and struggles in relationships. use your courage, your wisdom and your voice to overcome them. Two, it's kind to be clear. A quick and friendly no doesn't have to be an art form. And three, it doesn't have to be perfect. You just have to start. And also the word yet will change your life. Lastly, you can be yourself and still win. What are your top tips for emerging VCs across Europe who are fundraising?

59:39So again, love working with emerging managers, hugely important part of the ecosystem. I would say, like all of us, one, continue developing your edge. Make sure that you see everything in your chosen thematic focus. Again, companies or emerging managers like Carl at Black Sea, Jamie at Crater Fund, Chris at Atria do this really well. Also communicate your edge to founders. Chris gets into really good companies because he has a very strong value proposition and really helps founders with pharma go to market, which is something that many founders want. Two, I would say track your investments really closely and write great memos.

1:00:21Ramsey at No Label is best in class at this. And then I would say broaden who you would target for investment. It's exactly as we spoke about earlier, consider raising from angels, family offices, VCs who are aligned with your theme. And I would point to the episode of Gloria Barline. She, I thought her, it was phenomenal listening to her. So yeah, the playbook is there. So I would say, yeah, develop your relationships with follow on investors. I think this is probably a no brainer. But yeah, people like Carmen and Cocoa obviously do this phenomenally well. Also Izzy at Outsized also does this really really well.

1:00:59And what's the most counterintuitive thing you've learned in venture? I never thought it would have mattered so much to be based in Summerstown. So the decision to base ourselves here in a building owned by the council really has become our superpower. And yeah, and I couldn't really imagine being based anywhere else.

1:01:25I think we're back to, is it Scotland? PPP, product positioning and price or something like that. I think at least there's something about positioning being the most important thing in the world. So that's good fun. So now, Julia, before we stop, I want to ask you to just share with us a long held belief that you have that most around you don't believe. I think this is a great question. And when I think about it, I would say that the venture community has broadly failed to increase living standards. If I again come back to the people of Summers Town, like what has really been the impact of the innovation economy of the people who live here?

1:02:12And therefore, people across Europe and across the world. Again, Summers Town, highest proportion of child poverty in the borough. Are the beneficiaries of the innovation economy still a very elite few? I think in terms of goods and services, of course, there have been really impactful companies and services, products and services that are now available. But have they really, have they really enabled social mobility? I am less certain that they have enabled the kind of social mobility that we saw as a result of some of the electric and household appliances of the Industrial Revolution. And then I would say, I guess, you know, on this point that, you know, we as a fund, I wouldn't say it was an experiment, but we took the stance that we wanted to basically create and start Phoenix Court Works, which is the foundation, which then takes 10 % of profits from our management company, 2 % of carry across all of our funds.

1:03:16and we basically deploy that and support social initiatives across our local community. I mean, for me, that's been really important because its value is aligned with me. But I'm just wondering, like, how do we do that at scale? That's an incredibly important question for all of us to ask ourselves with everything that we do. Julia, you have been amazing. You made us go over time, or maybe I did. I don't know. But thanks so much for doing so. Thank you so much for joining us, everyone listening in. I really hope you enjoyed this conversation and you'll be sharing it with your friends, that you'll drop us a review on wherever you listen to the pod and also go on EU.VC, subscribe and tell everyone about my Papa Santa over here, who is joining us for a couple of weeks of interviews.

1:04:05Thank you, everyone.

1:04:09Tear down this wall. It's more than just an alliance. This is a union of values. United and determined, we can serve as a model for other regions of the world. The nature of a problem requires a European response. Europe is a story of new beginnings. Let's start acting.