She Started GoHenry at 47. Then Came 70 Rejections

0:00Alex Chisnall:47 when you launched GoHenry. Take me back to the moment you realised that there was a problem here worth solving. My kids were spending all my money on iTunes and it has to be that at some point you decided you were going to jump off that cliff and do it. So it took around 18 months and a lot of rejection to raise initial money. How many no's do you think you accumulated? 60-70. There was one round, 103 pitches. 103 pitches in one investment round. There were a couple of times when, are we going to be able to pay salaries this month? I have never balanced it. Constant guilt that you're not giving your family enough time.

0:38Constant guilt that you're not giving the business enough time. If we are going to deliver on the word every in our mission, we're never going to do that as a paid subscription business. We have to go to government.

0:50Alex Chisnall:Was there a moment where GoHenry nearly didn't make it? I know. Yeah. No.

1:01Alex Chisnall: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. A podcast for people who are ready to stop waiting, take action and make things happen. Louise, welcome to Screw It Just Do It. Thank you. 47 when you launched dear Henry take me back to the moment you realised that there was a problem here worth solving I was going to say can you see the wrinkles and the grey hair the line I've used a great many times now is my kids were spending all my money on iTunes so cast your minds back to probably 2010 or early 2011 and my brother had very kindly bought both of my kids the tiny little iPods for either a Christmas or a birthday.

1:56And as I discovered later, like many parents, I'd given them the login to my iTunes account with my credit card attached, and they were having a fine time downloading music without any concept that they were spending money. And, you know, to start with, I didn't mind. And then it started to add up. And as a parent, I was trying to figure out how do I make them understand that spending money and um tried all sorts of things it's a little bit of a betrayal of my character printing out the invoices for 79p that itunes used to email you each time you downloaded something sticking them on the fridge deducting them from this week's pocket money sad-faced children in front of me but yeah and it was talking to other parents and kind of joking about that that really as a parent wanting to find what was I missing was there a way to solve the problem realized that we were all having similar problems kids shopping on ebay buying in-app games in-app purchases on games they were playing and we were still giving kids coins pocket money we'd left them behind yeah I had exactly the same thing with that's what I noticed that my kids were literally spending it on and mine were born 2007 2009 and as I said before I started

3:20Alex Chisnall:both of their first experience with with money with banking was through go Henry that's great to hear glad was there appointment a moment a point where you just thought this isn't just a problem amongst family and friends but this actually could be a business yeah I've always always had my eye out for business ideas so um go henry's not my first business um all the way from making and selling kites to holiday makers on the beach with my brother uh where i grew up in lerstoft in suffolk um all the way through university i used to make clothes and sell them um I launched an e-commerce business with a with a business partner in 1998 when I was very pregnant with child number one um sold it four years later for not very much money at all but to a big retail group um so I was always on the lookout for a business idea yeah it was literally the more parents I spoke to we were all having the same problem so then it turned into let's have a look and see what's out there in the world to solve this and unbelievably there was nothing so it was you know it really wasn't and what what was Louise doing at that point in time like you mentioned like other ventures what were you um I had spent the previous 20 years um in e-commerce so operations side of e-commerce so helping either the the very first e-commerce players who were setting up and then as it started to expand helping some of the big bricks and mortar retailers in the UK set up their very first e-commerce offering so I did some work for John Lewis I helped Debnams launch their very first transactional website and then names everybody will be familiar with Hotel Chocolat, Scots of Stowe, the Cotswold Company, the White Company.

5:30So that, yeah, that was my career background before that.

5:34Alex Chisnall:That's what you were doing at that time when you decided to start going? I had a brief sojourn with the borough of Poole where I took on a, they called it a transformation project to help save money because budgets were being cut. It was taking over the procurement team and helping the council to save an awful lot of money off their bottom line. Yeah, that building going around the donut. Yeah, so much of it being sold off at the moment. Literally went around it yesterday, yeah, for sale signs around all of it. So you had two children, mortgage, savings, but not a huge amount of savings. No. what did you see strongly enough that made starting go henry worth that risk that's a really hard question to answer you know people often ask me these days what's the difference between an entrepreneur and and somebody else and it has to be that at some point you decided you were going to jump off that cliff and do it yeah and take the risk so i believed in the idea strongly enough and the more we looked at it, and I wasn't the only person, there were three of us who founded the business.

6:53One left almost immediately. The other guy left probably two and a half years in. So there were three of us, but it was literally, it was very clear, it was not just a UK problem. It was happening in other countries as well, and there was nothing out there. So fabulous opportunity to try and fix it.

7:16Alex Chisnall:How did the other two co-founders kind of leave the business? Did they leave the business completely? Did they keep their kind of hand in? Both left the business completely. The one who left first left after we found what I now know is called pre-seed funding because staying and building a business is not what he does and not what he loves. He loves the excitement of the idea of opening doors, getting people enthused we all have people like that right yeah getting the investors in and he played a huge part in helping us do that and then it was like yeah no I'm gone come off to the next right thing yeah I get that and the other one um huge part of getting the company set up but two and a half years in um you know we were still um fighting hard to get to profitability um really having to work all those usual founder things, working crazy hours, not enough money.

8:20And he went back to a corporate salary.

8:23Alex Chisnall:One of the best parts of hosting Screw It, Just Do It is getting to sit down with incredible founders. And once a year, instead of interviewing them one at a time, I bring hundreds of them together. This November, I'm going to be hosting the Festival of Entrepreneurs at the NEC in Birmingham. You're going to be able to hear from founders including Richard Harpin, Ray Kelvin, Juliet Barrett, Piers Linney and over 200 speakers across two days. So if you're looking for ideas, inspiration and genuine business connections, I'd love to see you there. Just go to festivalofentrepreneurs.co.uk to register for your free, yes, free ticket.

9:02Alex Chisnall:again correct me if any of this is wrong but people in financial services telling you that children couldn't have debit cards um what makes you hear that can't be done and then think i'm actually going to do it myself i'm going to figure this out i'm thinking back and thinking uh if my dad was still alive and he were in the room he would say to you yeah she's never been very good at being told anything. I love that. Yes, I can hear those words coming out of his mouth now. Exactly that. Do you know what? I think I learned it a long, long time ago. So all those years in e-com, in operations, so it was the day-to-day running of the website, the pick, pack and dispatch, warehousing, logistics, customer support, back in the early days, data entry.

9:56Do you remember the forms you used to fill in on the back page of the capital?

10:00Alex Chisnall:It's crazy to think about now, isn't it? So one of the things I learned during that period was to ask the dumb question. You'll often get people, whether that's in legal or in compliance or anywhere actually in the business, who will say, oh, you can't do that because the law says, the regulation says, common practice says. If you actually ask to see the clause in the law that says that, or the clause in the regulations that says that, it very often doesn't say that at all. It's just it has become the norm to interpret it in a particular way. So it doesn't say children can't have debit cards. technically the parent is the owner of the account yeah um and on that basis we can issue debit cards and they can be used by the children yeah and like you say that could probably be applied to any and every industry right but yeah it really can it really can i mean it happens time and time again we we when we were um we moved european issuing bank about three years ago and And the new issuing regulator in Malta said that the regulation said the card had to be delivered by a carrier, not the post.

11:29And wet signatures had to be obtained. And it's like, really? I'd be very, very surprised if that were actually written into the regulations. It wasn't written into the regulations at all.

11:42Alex Chisnall:Always worth being curious. So it took around 18 months and a lot of rejection to raise initial money. It did. How many no's do you think you accumulated before you got to the yes? For that first funding? Oh, I thought you were going to say for the whole company. For the whole company. How long have we got? 14 years in. Gosh. A huge number. Probably... 60, 70. Wow, I didn't know that many. Okay. And we got almost, well, we got to the point where we thought we were about to close the funding round because a family office had said yes to a fairly substantial amount and went up to London thinking we were going up to sign the paperwork.

12:33And no joke, son number three had flown in from somewhere, didn't like it, and they pulled... the plug so um probably about nine months of that 18 months was literally having to go back out and find the couple of hundred thousand that got pulled on uh on that day just when you thought you were getting it was not a good journey home that day on the train yeah on the train on the

13:01Alex Chisnall:train and i guess like you know most people that situation you didn't know how to raise investment You didn't know how to form a board. How did you learn quickly enough to stay ahead of the business you were actually building? Asking questions. I suppose from my previous career, you know, I'd learned how to build complex supply chains. I'd learned how to build big teams. I'd learned how to hire good people. And because I was either, I mean, all sorts of titles over that period, operations director or chief operating officer particularly as chief operating officer you end up with all sorts of things under your remit you're very seldom an expert in all of them so I'm very used to hiring people you know an awful lot more about than me about specialist subjects and then trusting their judgment and hopefully giving them the space to do what they do best so I think I think that really plays into it a lot how important do you think that is because I've again I've heard that um all the way down from like my former boss of nearly 20 years like Richard Branson you know all the way down to somebody like Julian Hearn from Huel who was you know interviewing um how how much or how how many of those years of building GoHenry um were you like involved in the recruitment process and how much uh i was involved in every single hire until we started to emerge from covid not because of covid not because of having to remote work but because we more than doubled our revenue in the year coming in the last year of covid basically and yeah i'm always kind of always feel like i should acknowledge all the companies that went under during that period because it was a tough time but if you think about the scenario everybody suddenly ended up at home all the kids were at home everybody had to shift to ordering everything online the problem parents were having with giving kids cash became became untenable for most families we went from 19 million turnover in 2019 to 42 million in 2020 and that meant we hired 90 100 people in about eight nine months and there was no way i could possibly be involved in every single hire no but that's again comes with its own challenges right the growth that that happens so quickly is again um in hindsight where a lot of businesses fail because they can't stay ahead of the curve right yeah i i think i mean i've i have talked about this before but when you're growing at that kind of pace in fact for a lot of the years we've we've as we've scaled as the founder or the leader or who you know whatever the leadership role is you almost have to reinvent yourself every six months or so because it's you know what got you through the last six months will not necessarily get you through the next six months and if you've got your eye on two years ahead as well it's like no okay so how how do I need to show up now how do I need to lead what do I need to change what do I need to let go of and don't think I always got it right because I didn't.

16:36Alex Chisnall:But did you, it's a really interesting point. Did you have a vision of the person that you needed to become to take the business where you wanted to take the business? Or did you not even know where you wanted to take the business? Like some people, you know, it organically happens along the way, right? Whereas other people start off with a very set view as to where they wanted to. I was very clear I wanted to scale the business. So I mentioned earlier that I had an e-commerce business back in 1998, sold it in 2002. The reason we had to sell it was we were making a nice profit. We had a reasonable turnover.

17:23and we sort of looked at each other and gone right let's scale it and realized we had no bandwidth we had no cash in the bank you know we were we bootstrapped it so tightly and had never ever thought about what would we need to do if it really worked and we would scale it and so we ended up having to sell it and that really frustrated me because that could have been a much bigger business so when I was launching GoHenry it was one of the reasons we didn't go to a cards as a service provider and there are many excellent ones out there we actually pieced the supply chain together with independent suppliers partners because I did not want to have to swap out a smaller provider in two years if we got traction as I hoped we would because then you you know one you can't convince an investor to pay you to not twiddle your thumbs but rebuild your tech stack and your supply chain stack for eight months they don't want to spend money on

18:33Alex Chisnall:that they want the growth and the revenue mentioned before about getting to profit But how many years did that, and then you mentioned the COVID numbers, how many years did it take you to get to that point? Do you know, we're a subscription model business. So, well, it's a great model. It's a great model. The thing I find myself talking to many, many startup founders about is just remember, have your eyes on acquisition. Just remember to look after retention as well. Otherwise, you're spending all your money. bringing customers in the front if they're all churning out the back end you've got a problem um I think really I mean it took us gosh four five years to make proper profit however because it's a subscription model I always start doing this when I'm talking about this element of it that's me turning the tap on and turning the tap off again so one of the strengths of a subscription model business because you've got revenue coming in every month from your existing customers as long as you're keeping them not losing them you can always turn the tap down a little bit on your acquisition spend and bring yourself up to profitability and you know sometimes so that you're showing the right numbers for the next next investment round and then you can bring in some more funds and you turn your tap on again so that's why I look like I'm turning a knob when I talk about it is you can use it in a way that can be quite flexible we wanted growth so we've bubbled up to profitability multiple times over the years and then we're like no let's go for more growth yeah um well as you grew from startup to scale up what did you the founder have to stop doing for you the ceo to become more evocative stop doing being involved in everything um And I think, I mean, one of the things I got wrong was I arrogantly thought I had delegated really well.

20:57And I'd given, I'd handed over budget responsibility to each of the heads of each of the functions and wanted them to own their budget and operate within their budget and learn that skill. because in my head that was a way we would succeed at scaling because they would learn those skills if they hadn't had them before and grow. But there were too many things that were still either in my head or had to come back to me. And I only really became aware of that when I realised I wasn't keeping up. You know, I literally couldn't get through the work. I was working crazy hours anyway and you know 11 o 'clock at night I was like I still haven't even looked at my inbox today um and so stepping back to try and analyze why that was it was I hadn't let go well enough so um actually I've just been talking to the teams about that yesterday um I set up a campaign called single points of failure because I love a campaign I think if you sort of give a piece of work a name you can really rally people around it and the concept was every single team would identify anything in their function where only one person knew how to do it only one person had the login only one person knew how to contact the key client or you know whatever it was and we have this huge huge huge list and you suddenly realize that's a major risk to the business my name was on it more than anybody else's embarrassing but so we worked through and we eradicated them all and that really strengthened the company we probably do that

22:49Alex Chisnall:once a year i was going to say and that can be to this you know start up with like three people in the business right all the way up to massive somebody goes on holiday and as you say the anyone with a login to your most important client to the back end of the platform i mean i'll make you laugh one of one of the things when i was thinking what the heck am i doing wrong why am i drowning at 11 o 'clock at night i realized i had to log in and download the bt corporate invoice and email it to the accounts payable team why because once upon a time my email was the you I was the only person doing everything on day one.

23:33My email was the login. So, and don't laugh, you can't change the login. You can't change the login email. You can't have a separate username. So the accounts payable team now might have my password so that they can log in and get it themselves.

23:52Alex Chisnall:Talking about scaling, what was the hardest thing, Scaling Go Henry, that nobody warned you about? the amount of time we were going to have to spend on fundraising. Oh, my God, I had no concept. No concept at all how much effort that would take, how many people in the business could get swept into that. And I think that was a learning as well. In the really early days, wanting to communicate and involve people, we'd literally I would literally tell everybody everybody in the company you know oh we've got a investor meeting tomorrow and then you realize I said 60 70 there was one one round 103 pitches 103 pitches in one investment round and you can't keep coming back and going no they said no you you know I realized that that was actually bruising the morale of the company so what we've learned to do is we spin up I suppose project teams um so when you know the last couple of rounds of fundraising which are a little while ago now um we spun up teams and we kept it within that team um and that lets you be very focused on how you spend your time it also protects the rest to the business the others are all getting on with running the business growing the business but does that and I've heard this from a few founders or more than a few that um it becomes a full-time job just doing that one function of the business right yeah and that becomes your responsibility it really can it really can be yeah yes and and nobody oh I'm thinking as I'm opening my mouth to say this is this true the founder can still tell the story better more powerfully than pretty much anybody else was there a moment where go henry nearly didn't make it yeah that's another how long have you got i mean the first one was not getting off the ground in the first place we we knew we needed we set a target to raise 750 000 pounds to launch the company because we wanted enough we had to plug into all the banking systems and you know there were some fairly chunky bills to pay to get make that happen um and we wanted enough to survive you know at least a few months post-launch before we'd have to go yeah so we've got some traction before we went back for any more.

26:37None of it went to plan, of course. We ran out sooner than we thought we would. It took us longer to launch than we thought it would. But that first getting it off the ground was a tough one. And then, yes, there were a couple of times when, am I allowed to say on air squeaky bum time? Are we going to be able to pay salaries this month?

26:56Alex Chisnall:And I guess when I started this podcast nearly 10 years ago, and never realised, you know, what some of the commonalities would be. And so many people that I've spoken to who have really substantial businesses that literally wages are due tomorrow, 30 people or whatever, however many. And I've been there myself with different businesses. And it's like, I have no idea how we're going to pay. And it's due in 12 hours or whatever. I know. Yeah. No, it's true. You know, I bumped into a lady that I knew from the school gates in Limington when we were probably, I don't know, a couple of years into the business from a very comfortable family, shall we say.

27:42And she's, you know, she said, oh, how's your little business going? Trying not to be riled at the fact that she'd referred to it as my little business. It was still little at that point. and we'd just taken in some funding. And so I said, oh, I said, no, really, really well, we've got 12 months runway. She said, what does that mean? And I explained. She said, oh, my God, you poor thing. You know, what on earth are you going to do? And I'm like, no, no, no, you don't understand. That is more runway than we have had for the last 18 months. That's fantastic. I'm really comfortable. We can pay our bills for 12 months.

28:22Yeah, and then realising you have no idea, do you?

28:25Alex Chisnall:You literally have no clue. No, and most people, you know, unless you're running your own business, it doesn't have to be a big fancy one. You know, it can be anything. I don't think people have any idea the stress that cash flow and paying salaries and that sort of thing can put on you. I don't think, or I know, you know, so many of my friends who've just been in, you know, corporate jobs are in the entire career don't even know that that could be a thing. No, no. People couldn't get paid the next day, which is unbelievable. Was there ever a point where quitting would actually have been like the rational decision?

29:06Well, all of those points that I just...

29:08Alex Chisnall:Any rational person would have... Yeah, yeah. Would any rational person have given up a good job and gone to do it? No. I think there are lots of points, again, for any company where if you were looking at cold logic and numbers, you'd probably go, yeah, let's go back to being paid by somebody else. What did building GoHenry cost you personally, that somebody looking at the success from the outside, again, it's cropped up a few times, we've been talking about success from the outside, in the average person's eyes that they wouldn't necessarily see? The constant juggling act, I think. that you never get right, never, ever get right.

29:55You know, there was a young woman a couple of months ago at a networking event and she said she'd been waiting to talk to me because she was, I was divorced probably three years before I set up GoHenry, so it was me, as I said, two kids, young then, they're all grown up now. She was a single mum with two young kids and she said how I really want to ask you how did you balance it how have you balanced it and I'm I haven't oh I'm really sorry I have never balanced it constant guilt that you're not giving your family enough time constant guilt that you're not giving the business enough time I don't know where the me time and there's there's a whole topic in that but you know that fell off a page that just didn't exist yeah um i don't regret any of it um i yeah i wouldn't change you know specific decisions maybe but i wouldn't change what i did and why i did it but no there is no balance no and i like hearing that when you say you don't

31:08Alex Chisnall:regret it i was literally having that conversation with myself over the last couple of days and i'm Again, if I could go back and change a few decisions, I would. But so many people that I've chatted to through this and the live events I've done over the last 10 years, there's certain people that would say, once you've had this vision of where you wanted to get to, or maybe it was a number or a certain point, but once you got there, you're like, oh, okay, then on to the next thing. and like sat where you were literally last month chatting to um chap who's just bought a place down by me and sandbanks funnily enough he just exited for for two billion and and i was like you know what was it like becoming like a double unicorn he's like didn't mean anything it was never part of the journey yes i can't argue that it's it's given me choices more choices in life than i had before but it hasn't changed the trajectory of who i am what i am and what i'm trying to do it just means that now I've got options and now I'm looking to you know invest in some other businesses and help other people have an easier journey than I did so I don't know what you think about that but yeah so GoHenrys must have evolved enormously in you know since 2012 to some 14 years now at time of recording this how do you know when to stick relentlessly with the original vision and when the business is telling you you might have to pivot?

32:37That's a really good question.

32:43I think we have stuck pretty relentlessly to the core mission and our mission statement has been the same for donkey's years now to make every kid smart with money. Yeah, I love that. how you interpret that of course loads of nuance around it um there were there were certain things we did um so realizing that we could really double down on the educational side of it you know watching the data and seeing how what we were doing and the services we were providing was driving behavior change in the kids. That was fascinating and then thrilling. And then when you looked at the implications of that for lifelong behavior change, just incredible.

33:39So we, I'm trying to think, when did we launch Money Missions? So Money Missions are our in-app gamified money lessons, little videos, quizlets, all sorts of things like that, that either pop up en route or if the child wants to, they can systematically work through, you know, levels, badges, all that kind of thing.

34:03There was a big debate about do we launch those? Is that a side hustle? Yeah. Is that, you know, is that mainstream enough to what we're trying to do? Deciding that that was the right thing for the customer if we were to stay true to the mission. was quite a big decision because it was a big investment. You know, we hired educationalists. We worked with, managed to hire somebody who'd built BBC Bite Size from the ground up. But we worked with lots of behaviouralists, educationists and created these money missions. It was a big investment. But actually that still today is one of the differentiators between us and now in the UK.

34:48There are a number of other players in the market. still very much white space in Europe still only one sizable competitor in the US but our biggest differentiator is the both behavioral nudges and that massively educational component that is in there because it's the right thing to do for the customer if we're going to stay true to our mission so I don't know if that answers your question or not but yeah and when