My Wife Gave Me One Year... We Built a Unicorn

0:00My wife just said to me, you've just got to stop doing this. My wife gave me a year. She said, go play for a year. One of the questions that I think is on people's mind is like, had you always wanted to build something?

0:11Alex Chisnall:And the answer is yes, I had always wanted to build things. And becoming a unicorn, did that milestone feel the way you expected? It was an irrelevance. It was an utter irrelevance. What stops founders from building something meaningful isn't the lack of ideas, it's the fear of getting started. I'm Alex Chisnell and this is Screw It Just Do It, the podcast for people who are ready to stop waiting, take action and make things happen. Before many pets, before everything people know you for today, what did life look like? What were you doing? Where were you living? I had done a very significant number of startups, always in the form of what's now called an intrapreneur.

0:54So inside other businesses funded by other companies. In the middle of that, I was a McKinsey consultant for a number of years. But I've done startups always in financial services, mostly B2C, one B2B. So wealth management, private banking, that kind of space. So that's the kind of prelude to this conversation about many pets.

1:16Alex Chisnall:Yes. So from the outside, it looked like you already had success. were you you know 100 % happy in that environment? So I mean like these startups had this kind of natural rhythm to them so there were always three years each. Okay. First year of planning and thinking and research, second year of kind of getting everything together to launch it and then the third year of building it up and then finding somebody internally to run it and then I'd leave after three years and move on to the next one and I did three of these in rapid succession So lots of three years. I get to the end of the third one.

1:51And my wife just said to me, you've just got to stop doing this. This is ridiculous. Like, why do you keep doing these three year stints? You get yourself completely and utterly worked up and then spend three years like working your ass off. And then you start again from scratch again. So what's going to be different this time around? So that's that's the beginning of this conversation. What do you think it was that made you do like the three-year cycle so many times? So I think there's a few things to answer in that. Firstly, you have to remember that the startup world in the UK really only goes back 10 years.

2:23Like maybe you could stretch that to a dozen, but it isn't a lot longer than that. So in today's world where individuals are really keen to start something from scratch and have huge support mechanisms, that wasn't around there. This idea of starting something from scratch, it would be like a complete anathema to decide to do that on your own, on your own tab, and then go out and fundraise. I mean, there was very few places to go fundraise from, right? So this idea of entrepreneurship was kind of the nearest thing that existed. I mean, I can't say that it was an active choice because there was no choice to go build something from scratch.

3:02So, you know, one of the questions that I think is on people's mind is like, had you always wanted to build something?

3:08Alex Chisnall:And the answer is, yes, I had always wanted to build things. I'd always liked building things. I'd always been fascinated by building things. I'd always been fascinated by things being created. But the background to doing something from scratch didn't really happen until I finished the last of these three-year gigs. I had this conversation with my wife and then had to sit down and think, what was next? This episode of Screw It Just Do It is sponsored by Moulton Ventures. One thing I've learned from speaking to hundreds of founders on this podcast is that the right partner brings more than just capital.

3:42Alex Chisnall:That's exactly how Moulton thinks about backing founders. They work with some of Europe's most ambitious technology companies from Series A and beyond, bringing experience, energy and partnership to help bold ideas scale faster, go further and become global businesses. So if you're building something with real ambition, Moulton's mission is simple. To help make more possible, go to maltonventures.com. So when we started what was called bought by many at the time, and I went to the FCA for permissions to enter into the space, they said to us, the world doesn't need any more insurance businesses.

4:18Like, why do you want to do this? And it wasn't no. They were just intrigued by why you'd want to start something from scratch. That just seemed like odd to them. And we've got our hands full managing the group that we've got, and consumers have got enough choice. So why?

4:32Alex Chisnall:Yeah. And off the back of that, then why did you decide to do it? And what did you think you could do differently or add value that wasn't already there? So I think there's a few things that I was keen to do differently. I think the first was about trying to create something where consumers genuinely felt they were listened to and their opinions mattered. and I think that many businesses claim that I think there aren't a lot that are built on that true yeah and I think the second thing that I was really keen to do I worked for a large number of corporates in various different roles some in quite high levels of seniority and for the most part they were poor employers because they just managed staff and staff processes in the way that they had always manage staff and staff processes and I really wanted to be a different type of employer too and actually that taken with this piece on consumer attitudes was the core driver to wanting to do something different because I was just sick and tired of trying to change things from the inside and finding it you know even as an entrepreneur you're still kind of working inside the framework of large corporates and and you can only employ the people that meet their criteria, pay and incentivize them in those ways, you know, not just remunerate, but kind of like manage them in the process in a way that's always been done.

6:02And so it was a really important part of this whole journey to try and create a completely distinctive and different

6:09Alex Chisnall:customer experience and a completely distinctive and different employee experience too. It's interesting, isn't it? Because I was literally having this conversation last night and I spent 16 and a half years at virgin atlantic and then virgin startup and i always just say there's a certain type of people that they would recruit and the customer service training that we all got literally second to none and i just think it's you know stayed with me my entire life like post post that era and there's a lot to be said but equally i speak to more people like you who haven't had that experience so you have a very rarefied experience and i'll give you a data point that explains that point so a few years ago uh only a few years ago many pets won the sorry to be clear we didn't win we came second in the most loved employer in europe this was unbelievable to me yeah like it was genuinely a colossal success and made more so by the fact we came second to virgin atlantic really that's so interesting and and i was delighted that that was true because genuinely they're a better employer than we could be like you know we just couldn't aspire to be like that we were you know we were 600 odd staff large at that point right right so we weren't tiny but we were nothing of the scale and complexity and and uh and value of a virgin business so it felt like it added more value to our second position to come second to them that's tremendous yeah that's really good man um and going on your three-year cycle before Or how long did you sit on the idea and how long did it take to actually iterate that idea and actually get to market that?

7:51So you're talking about the beginning of Bought By Money. So the idea, so Guy is my co-founder who had worked for me at my last corporate job. We've been kind of kicking about the idea for several months as to what would this look like. He had a long commute into the city. He'd been playing around with some stuff on his laptop. I've been kind of thinking hard about how do you do things, something different in the insurance space. I was really keen to do insurance because it felt like insurance was this kind of backwater. There'd been nothing new for decades in the insurance space. I mean, like brackets, the only new thing was price comparison.

8:25Alex Chisnall:And I'm not sure that's really been a great overall win, separate conversation. And so for me, I was really keen to find something in the insurance space spent months thinking about it kicking this idea about with guy and we registered the name bought by many in december 2011 and spent the following nine months to your question kind of like we both were doing a little bit of part-time work elsewhere to pay the bills and at the same time putting proper mental space into what does this look like and what could we build and how could this happen um i did my first bit of fundraising um found a uh an individual who was really who knew a lot about insurance and was really keen to back us and do this so thank you very much to him and and also i knew that we gapped out on direct consumer marketing um and spent a large part of those nine ten months uh kissing a lot of frogs to try and find the person and I wanted to be the third of the three of us who would bring direct consumer marketing experience.

9:31Alex Chisnall:And who did you find? So I recruited a chap by the name of Sam Gilbert and Sam technically became employee number one. I was going to say, yeah. The other two of us were founders. Yeah. But we treated him like a founder and he certainly behaved like one too. And he very much was very happy to join this journey. And was there anything stopping you launching it before you did? Well, firstly, we needed regulatory permission. Secondly, we need some insurance companies to want to back us. Thirdly, we needed some money. And fourthly, we needed a whole customer journey process and website and capability, all of which was being built off the side of our desks.

10:10you know me from my kitchen and guy from the shed in the back of his garden yeah um yeah and when sam joined us we decided it was time that we had the three of us meet together so we rented our first office space to give you some idea um that office space is now a cupboard and this is not a joke it is absolutely a storage room um and we got the three of us in um and kind of that was really interesting we kind of bought our first bits of kit we bought a coffee machine and a printer which you believe and a projector and that was and we all brought our own laptops and then we were yeah

10:44Alex Chisnall:we were off to the races and up to that point um you weren't working at all were you just working on this you literally so i so i for that nine ten months i did some part-time work thank you very much to a very good friend of mine who enabled me to do some work and pay some bills because i had a young family yeah um and guy did some contracting work too but yeah we were mentally 100 if not physically 100 did either of you at any point ever nearly convince the other one not to do it and i should tell you something that i probably haven't talked about before but it was kind of very weird so as we're registering this company i've just been for a series of very of job interviews for a very very big job and i got offered that job and i was like oh wow i wasn't expecting to be offered it it's quite flattering to be offered it it's a really interesting role do i really want to do this or not?

11:36Like, where am I at in this process? This is the very end of 2011. And I talked to Guy about it very openly. He said, look, you must do what you want to do. And then this kind of weird thing happened that the person who was supposed to be putting the job into writing suddenly became very, very ill. And this large entity said, we need to pause. We need to pause. The person who's supporting your recruitment into this large global business is off ill. And we need him to get better before you can come join. That was it. Like, you know, so I don't know that that's necessarily like it's more happenstance than anything else.

12:16But that happened. And therefore, there was no debate.

12:19Alex Chisnall:Yeah. Right. I was already like so mentally into this new thing that it didn't I didn't bat an eyelid. The gate opened, basically, and you had to do it. right and what was the see that employee number one um got the office um what did what did your wife say what did other people close to you say so so my wife gave me a year she said go play for a year and guy's wife was also similarly actually he wasn't married to her at the time but his his long-term partner was similarly supportive of him doing this and so that's what we did and we paid each other some very small salaries um just to kind of like that felt like an important thing to do um i was lucky enough to be also i i did two startups at the same time um and and the other startup paid some money because it had a deep pocketed founder um not founder i was the founder with him but kind of he had a deep pocketed backer and so I was doing these two things at the same time Guy and Sam were doing this full time and we had this whole agenda around building communities of individuals who had similar but niche insurance needs and this is what bought by many was that was what the name was all about and we were trying very hard to use a combination of search and social media to find individuals who had these similar but niche needs so examples for sure there were pet things in there like pet insurance for labrador owners but there was also travel insurance for diabetics there was professional indemnity insurance for yoga instructors there was personal accident insurance for commuting cyclists like myself um and um and we built these communities And at its peak, we had over 330 of these communities, a million members, because we call people who join these communities members rather than customers.

14:23And we had negotiated with different with multiple different insurers to give individuals in each community access to better insurance.

14:31Alex Chisnall:Yeah. OK. And we were we were live with 11 different insurers. So, you know, this is a relatively complex business by this point. I'm kind of fast forwarding a little bit of time here, but this is where we're at. Right. And it's kind of really interesting to do something like this because suddenly people are taking notice of this because this is non-trivial size now. And, you know, we've moved out of the cupboard. Right. We've moved actually technically we moved literally across the corridor in this place we're renting into a bigger space where all of us can sit around a very large desk. There are no holes in the floor anymore, which there were the first time around, which our first investor fell through, unfortunately.

15:13Did he survive? He did survive, but it was not one of our best moments, if I'm brutally honest. He's very good about it, but we're awkward and embarrassed even to this day. And, you know, we've started to win some awards. We've started to be known in the marketplace. we're going to industry events as this startup in the insurance world where frankly the incumbents have never seen a startup to give you some sense of this this predates the expression insure tech okay so this doesn't exist right and I even remember the the debate does insure tech have an e in it or not it's like as it was starting to be kind of emerge and so we're still very early in this whole startup space.

16:00We've done a few little bits of angel fundraising, nothing significant. And now we're stepping into this space of saying, okay, we're kind of beginning to have some confidence in what we're up to. We can see that long tail search and social is a really interesting way to find consumers. And we're really intrigued by the possibility of this. So we want to go further. that took us down the route of wanting to buy a business with broader permissions than we were ever going to be able to get on the own and and also at the same time we had this i mean frankly now it's like laughable but we had this opportunity to do some serious work in china too okay which like was a million miles away from from what we'd originally said we were going to do but Was that the business that you acquired?

16:53So we acquired this business. No, we acquired a UK business with permissions from Allianz.

16:58Alex Chisnall:Okay. And delightfully, and I don't think I've ever said this publicly, but thanks to them because not only do they enable us to really take several leaps forward at the same time, they also lent us the money to buy it from themselves. Right. So thank you very much to them. I'm enormously, enormously grateful, which I have heard now that they are internally frustrated that they did and aggravated with themselves because it enabled us to be their biggest competitor in years to come. Wow. That's another podcast, isn't it? That's a whole other conversation. And so we're now in 2015, right? So we're now still all in one room, but we've raised some more money.

17:41We've still only from angels. we bought this small business mostly funded from Allianz and we've got broader set of permissions and we're building something of material scale at this point and at the same time doing this work in China where we helped Ping An to understand about search and social and long tail acquisition of customers which we were helping them to use on local Chinese social media so there was no conflict with what we were doing in the uk yeah um and they were paying us meaningful amounts of money to to cut to come to china and help them really learn how to do this um and those those kind of months around 20 to 15 or so were incredibly exciting incredibly like different from what i think we could have predicted would have happened um and this business is going from being frankly like teetering on like can we make payroll because we've been through that process a few times i skirted over one particular piece where i've done my year my wife's given me a year and i ask her for another year oh really um and uh where were you at after a year then tell me so for her so we had we had 10 000 customers this was an important part of our members as i told you they were called yeah and uh so we're kind of jumping back a bit so my apologies for that but but we're just junking back.

19:05And we've done 10 ,000 and I'm now really thinking this could be something interesting. And so I said to her, I need another 12 months. And she said, of course you do.

19:19Alex Chisnall:And are you paying yourself at this point? I mean, not really. Yeah, yeah, yeah, okay. And we had like an enormous gratitude to her for her patience in this process. uh and her forbearance and and you know we we made some interesting financial decisions as a family at that point um kids are getting older like as we all know kids get more expensive as they get older yeah no one tells you at the beginning though yeah i know it's weird hey um you all think it's going to be lovely although actually on the way here we walk past this massive buggy park where they all look like ferrari buggies right so i'm not quite sure that maybe maybe there's a kind of a most expensive bit at the beginning and then it dips a bit yeah um so so i do genuinely think that this roller coaster ride um of things are going well but you're running out of money and can you raise money but there isn't really much startup community do you want to fund it yourself possibly um how does this work some people in the in the small number of us are working desperately need to earn money some less so yeah um and you know we did we paid um a few people um in options rather than cash for some months um and you know we teetered on the edge three times three specific times and those options obviously paid off in the end for those people yes um let's can we dive into those three because i was going to ask you literally next question what was the hardest chapter you kind of preempted that with three chapters maybe or is there one that you you think um so i what's the hardest thing i mean there are like there are lots of times when being the ceo of a startup is hard like firstly i i have huge admiration for people to do it on their own having a co-founder i feels like makes it so much easier a guy and i are completely different people right you know with on paper we would have nothing in common and that's what works yeah um and you know at the very beginning we were talking about you know who would be the ceo because we need to put that in for the fca registration he said well of course that's you so i said well why is that me he goes because i'm not going to do that you're going to do that and did you assume that i hadn't at all i hadn't really thought too much about it at this point we're like filling in forms yeah um and and so you know it's kind of very interesting space so what is the what was the hardest time um i think the hardest time was the series b raise um which is 2018 so we've jumped forward quite a lot uh we're all we're now in i mean maybe we should talk a bit about how we go from being this community space to being a pet insurer because i think that's kind of an interesting yeah yeah okay journey but we're when we're coming up to being a pet insurer in 2018 um and and we're running out of money um and the reason that i was telling you a bit about the chinese piece is because i got to know a lot of investors in china i was spending a lot of time in china um and one of the big chinese investors said we will back you for your next raise you tell us when you're ready to do it we'll back you um and so we took this term sheet from them and signed it then they had some dd they wanted to do and they just seemed to take a very long time to go through the DD process and weeks became a few months and suddenly I'm thinking like you know this cash out period is some way away still but I can see it looming in the distance and a few months became six months and then the cash out is like weeks away and we just had to rip up the term sheet they weren't getting it over the line and that was hard because there were you know at the beginning when there's only half a dozen people on payroll like you can have a meaningful conversation with everybody in one space but at this point we were over 30 staff yeah and that's much harder and so that particular challenge um of finding money when your back is against the wall and i can't make payroll and i can't fund it myself anymore because it's out of my own personal capability to fund i've done that before but i couldn't do it at this point and we are becoming a pet insurer so we've got people who's got policies in our names in fact at this point we also had travel insurance and professional indemnity insurance customers you know failure is not really an option at that point right because you've got customers who are relying on you and so that I think was the really challenging part which is kind of Q2 of 2018.

24:01Alex Chisnall:And you said you couldn't fail did you think you might fail? Yeah for sure I mean I thought we I mean, I told you there were three times, and it's not an exaggeration to say March 2014, September 2016, and Q2 of 2018. I mean, the fact that I remember those dates. I was going to say, to remember the quarters, let alone the years. I can be really specific about what's going on in each of those times. And each of those times, through just unbelievable grit, we got through those. I've been there myself and spoken to many people here in that chair like yourself who've been in that situation, that not being able to make payrolls is just a horrible, like the night before it's due, it's just the worst feeling in the world.

24:47Alex Chisnall:Completely miserable. And I committed to never being there ever again at that point. We were never going to get there. Whatever happened, it was not going to happen because as the business grows larger and payroll becomes bigger and you've got more customers with policies that have got your company's name on the top of them, you know there's no it's inappropriate to let a business be that flaky at that stage in hindsight do you and um co-founder you know ever have that conversation that um did either of you ever come close to just chuck in the towel and no i don't we we never had that conversation and i don't think we would have had that conversation because i don't think we really got to that point yeah i don't think that was right i don't i don't think we would have you We had a lot of people who had joined the business because of us.

25:36We had customers who bought policies because of us. I don't think that was something that was on our radar screen ever.

25:42Alex Chisnall:What was the biggest mistake that you made? I don't know that. I'm not sure I think about it as mistakes, but I think if I had my time again, I might have made different decisions. I'm not sure. Can I kind of frame it like that? Yeah, yeah. Yeah. You know, I'd spent a lot of time thinking long and hard about about investors. Remember, we're still in this space where, you know, there aren't a lot of businesses out there that you can learn from. There aren't a lot of businesses out there that have been through this cycle. We're growing really fast and we're winning lots of awards from mostly consumer.

26:25We've stopped doing industry awards and started only doing consumer facing awards.

26:31and fundraising at the same time. You forget that COVID entered the agenda at this point, and this is hard. We were about to do our Series C. It's the very beginning of 2020. We've signed term sheets. COVID arrives. Everything is off the table, and bloody hell, we're back here again. right you know like this was not i said we weren't going to do this again

27:00Alex Chisnall:2018 the previous one right yeah this is 2020 and you're like oh my god so we did fundraisers every two years right this is part of the game plan this is not a coincidence that was all part of this okay um and that path that process was hard that that early the early years the early months of covid were very hard um no one knew what was going on in the world like people had no idea um and you know and i totally get that investors had no idea either um and if i were them i also would have been really nervous um and i think that if we had our time again we might have been had more faith in ourselves and and been a bit more circumspect and a bit more careful about what we did at that point.

27:51But in the thick of it, in the time when the news looks terrible, you don't have that luxury.

27:58Alex Chisnall:No. We were talking like staff numbers before and you were saying, like, you know, three of you, then fast forward to 30, you know, right at the end, 600, you know. So at what point in the whole journey did you think this could actually be massive? I never thought this could be massive. It never occurred to me to do that. Seriously? Seriously. My agenda was to build a compelling business that customers wanted to be a part of and people wanted to work for. And it was not a scale thing. was never a scale thing for me you know this aspiration of becoming a unicorn that was not on my you know like i'm not saying i never thought about it like that would be a lie but i never thought that it was something that i aspired to achieve okay um just just wasn't and again looking back what was some of the first things that broke when you did scale the big scaling years were the early years of COVID.

29:09So it's very hard to break apart your question to be distinct from what's going on in COVID. But I mean, I think importantly, the first thing to say is that we built a digital business from the outset. And because coming back to something I was saying earlier, that we're an insurance company in a world where there aren't any new insurance companies, that's distinctive. And so in the early months of COVID where everybody is shutting down because people can't get to work and therefore they can't process applications or claims or any other kind of customer contact, the SEA is forcing people to shut their books.