James Watt with Rory Sutherland and Elfried Samba on BrewDog, gut instinct and starting again

25:25But it's, again, a kind of gathering rush towards investing in exactly the same thing. And again, it's the John Maynard Keynes point that worldly wisdom teaches. It's often better for the reputation to fail conventionally than to succeed unconventionally. And the fact that John Maynard, I think, no, it's actually, this is, I think, Charlie Munger, who says that what you've got to understand about lemmings is that although their behavior is, Not that they really do this, but although their behavior is famously collectively stupid, there's no recorded case of an individual lemming being singled out for blame.

26:03So there is a natural reputational insurance in any corporate environment. Now, family-owned businesses, founder-led businesses are fundamentally different. They've got a different risk-reward profile, totally different appetite for upside and downside, which is actually better calibrated, I would argue. Fundamentally, in large organizations, the default mode is do not fail. And the default mode, therefore, is cost-cutting combined with regulatory paranoia. And there are a lot of large companies which I would say don't do much other than those two things. Yeah, I think that's where it's that. That's something like 70 % or 80 % of revenue generated by AI all go to Anthropic and OpenAI anyway.

26:42So basically, everyone that's building businesses on top are just basically like research centers for those organizations, right? I mean, it's my hypothesis that I now get pitched so many businesses that all it is is an interface for an LLM. It's like, I can just use the LLM. This is not a business. This is just a wrapper and something that exists. And why I'm so bullish on consumer is I think over the next few years, all that money that's been flowing into tech investment, there's going to be far fewer winners, far bigger winners. But that money is going to need somewhere to go. And what is AI not going to disrupt?

27:10And it's the famous Warren Buffett quote, the Internet's not going to change how people chew gum. So people are still going to drink beer. People are still going to buy sweatpants. People are still going to go for a pizza. Incidentally, if I look at it from a totally selfish consumer point of view about the value of tech to me in my life, the stuff that's amazing is often less valuable to me than the stuff that solves a repeating minor irritation. So I was talking to Tom Goodwin about this, about effectively the seven wonders of the tech world. And we included it in Google Maps was his suggestion.

27:46One of mine would be Google Wallet. You know, simply that you have a train ticket. You go, where's my train ticket? There it is. Rather than having to deal. So what actually benefits us in our lives? It's worth remembering, by the way, also, that 50 % of the population don't really have an appetite to do things significantly differently. And this is something that completely, I mean, literally, you can actually find this in, it's often research done in politics, actually. and politicians get completely bemused because they come up with these new plans for exciting things and they're met quite often with hostility or indifference.

28:25And they fundamentally discovered that 50 % of people are happy with things the way they are and don't even want change if it is notionally an improvement. Now that sounds, to all of us, that's completely bizarre because all of us are of the mentality where we're always looking for a different way of doing something. Yeah, I think that there's two ways to motivate a mouse, right, with cheese or a cat, right? And I think a lot of the times we think that cheese is enough to get people really excited, right? But then really, a lot of the times people, like, make changes out of fear, right? So unless it's, like, fear-based, like, a lot of people will not have the motivation to change, right?

29:03Yes. Unless the pain is hard enough, people won't do it. The people that will are those that are curious. They want something different. I actually believe that if you think about the notion of technology. We're going into this analog era simply because the young people don't want to be like the old people, right? They're like, actually, well, all of you guys think you're cool because you like this. We want something of our own. So we're just going to go counterculture just because it's going to mess you guys up, right? And I think that that's what happens in history. We've just not been around enough to see that happen with the internet, which is really interesting.

29:36One of those fascinating things, which was an epiphany to me, is having spent my whole time obsessing about innovation, which I'm an enthusiast for. I'm a massive electric car advocate and so on. I'm not in any way cynical. But understanding that people are differently calibrated in their appetite for change, disruption, and so on is one important thing. Secondly, the fundamental problem that our relationship with nature, the physical world, et cetera, has been to some extent deeply damaged, I think. And we're starting to discover it in this sort of Joni Mitchell, you don't know what you've lost until it's gone.

30:11And the story that absolutely weirded me out was that in American prisons, you get conjugal visits. OK. And you have a kind of hut thing, which is still within the walls. You go and effectively your girlfriend or wife or whatever turns up on a scheduled conjugal visit. Now, you and I and all of us would assume that the first thing you do is, OK, we can all guess. Apparently it isn't. The first thing they do, the little houses where you have your conjugal visit are surrounded with a patch of lawn. I don't know why this is, but apparently in American prisons, you sleep with your boots on. You sleep with your shoes on.

30:46You don't take them off to go to bed. I don't know why that is, but someone more familiar with the U.S. penitential system can tell me. The first thing they do when they go to the conjugal visit isn't what you'd think it is. It's they take their shoes and socks off and walk on the grass. Really? Weird as hell. How does that? Actually, what we've done is we have effectively built barriers between ourselves and all kinds of aspects of the natural world, including each other.

31:19And the danger is that it's happened, you know, because it's happened gradually and everything, as I said, arrives as a choice and ends up as an obligation. That's my real, that's my Luddite quote for the day, if you like, which is that all these technologies arrive as a welcome alternative to something else. It's in other words, you install the screens in McDonald's. I think they're great, wonderful. What people notice immediately, the reason those got installed so quickly is people order more food when you order on a screen. Everybody's basically happy. And then some accountant notices that, well, maybe if you've got screens, we don't actually need someone serving you anymore.

31:57And now what started as a gain in terms of just optionality ends up basically as a constraint. Now, suddenly McDonald's isn't McDonald's anymore. Same thing happens with scale. You make something bigger, okay, and it becomes a bit more efficient. And what nobody notices is they're now calculating the gains to scale, but they're not calculating the losses. And the argument I'd make is there is a—this is a perfect analogy for you—there is a limit to how big you can make a pub before it stops being a pub. Okay? You know, there is some scale limit. Airports, you know, skip on airport. It's unusable, in my opinion, because they tried to make the whole thing one terminal.

32:36And if you end up going from gate D107, you practically walk to Belgium. Mr. Key place there, yeah. You've done that. Okay, right. Okay. And you kind of go, well, look, what you're doing is you're optimizing for one thing, which is typically something like efficiency or cost cutting. And in the process, you've got this wonderful model which justifies your activity, but you're completely failing to quantify what's being lost. And generally what's happened is we've probably gained a lot in terms of our quantifiable lives and lost a lot in terms of just general meaning and significance. And it's no individual company's fault.

33:12It's just that when every company behaves, this is what you noticed, when every company behaves the same way, and this is what always amuses me about farmers' markets because they're totally stupid, aren't they? You know, you've got to pay six times to buy eight different things. Weirdly, they're out of doors, and you pay a premium for buying direct from the manufacturer. But for whatever reason, the existence of the farmer's market is a testament to the fact that we're actually craving human exchange. Yeah. And so going back to the BrewDog story, because business needs are often faced with the challenge of it makes logical sense in the spreadsheet, but it doesn't make human sense in the long term.

33:54Right? Are there any moments when you were at BrewDog where you would go against what conventional wisdom is to be able to safeguard the longevity of the business? It just made human sense. Yeah. I mean, if I look back at my 17 years at the helm, all of the bad decisions that I made was when I used logic to override my gut instinct. So if I could go back and do anything differently, there's probably kind of up to 10 pivotal key decisions that I let people talk me out of what I felt was going to write as a gut instinct, that I used logic, that I used data science, that I used research, and ended up doing something that was completely the opposite of what we should have done.

34:35And I've got this hypothesis, which is companies which go on to kind of really change the world and have a massive impact from startup scale they're so unique and those ones are the ones that keep how they did things when they were tiny as they grow and as a company growing and scaling and like we broke the sunday times fast track record for the most consecutive years of kind of high growth in uk so like we do quicker than any uk consumer goods company there's so much pressure to change the business how you do things how you think with scale and there's so much people telling you well to get to the next level to get to to get to 2 billion valuation to get to this amount of sales to get to 2 million cans a day you need to do this you need to do that and again if i was going back and doing anything differently i would have worked even harder to entrench the chord of what we did that was unconventional that was different and so the mistakes that we made was we became more conventional with scale when i should have kept us unique and true to who we were and then there was a few times where I didn't listen strong enough to my gut instinct.

35:41And that's really, really fascinating because there's so many experts out there that always tell you about building systems to scale, building systems to scale, but then everyone uses the same systems to scale because everyone took the same course. And then you become the same. And then you just become the same. And what I constantly tell the team is we can't just become a mini inefficient Heineken. So we were doing a million cans of beer today, but Heineken, we're doing 25 million cans of beer a day. So what we couldn't do was do exactly the same as them, because then we're just a tiny inefficient version of them.

36:09So we had to find different ways to engage, to speak about our beers, different types of innovation when it come to beer, different ways to innovate and kind of connect with our community and all these things. But we just couldn't do things the same way as the big competition. What would you say was your, what is the happiest moment? Because you obviously talked about the early days where you went to university, you thought you were going to go into a particular career, you quit after a couple of days, you go at sea, you learn the graph, you start your business, it's all going. What was the, if there was one moment that you'll pinpoint as like the happiest moment or the most fulfilling moment whilst on that journey, what would that be?

36:48Oh my goodness, like so, so many moments. And again, if I was going back and do it again, I would like stop and smell the roses a little bit and enjoy those moments. But I was just so unbelievably focused on, okay, amazing. What's next? How do we push? How do we go? I mean, And we did an investment deal that valued us at a billion pounds, which was a huge goal of ours. We took£240 million of investment. Myself and my co-founder both took a life-changing amount of money off the table. Like that night… Do you wish you hadn't done that? Interesting. Yes and no and all… That's my own. By the second.

37:25That night, I remember my dinner was a cold pizza in the office at 8.30pm because I was still there working. So that was the extent of the celebration. We had a beer together, 8.30 over a cold pizza. I mean, it is so interesting. So that was a deal that we did in 2017 and it had a big impact on how the future of the company played out. Now, to go back and second guess it is very easy with hindsight and everything's happened. But let me tell you a few things that nobody knows about. So that deal we did in 2017, the hypothesis was, I want to take my five-year business plan and do it two years so I can accelerate value for our equity punk community.

38:05We had so much momentum. So I think in business, the key thing is when you've got momentum, you better double down on it because momentum in business is such a thing. And you often don't determine when you have the momentum, the market determines when you've got momentum. So I wanted to double down. I wanted to push harder. And we took this deal. Now it was a leverage deal. And the private equity partner who were fantastic throughout the journey had a compounding equity type security. So I knew doing this deal that I had to get them in and out in five or six years. Otherwise they would own too much of the cap table.

38:35So everything was going well. The company was growing. We did that deal at a billion. We had some interest in the company at 1.3, 1.4. Stars didn't quite align. Just before COVID, we had signed heads of terms and were due in diligence for a common equity deal at a 1.6 billion valuation. And the deal was this close to being done. COVID happened. 125 of our hospitality locations closed the investor who was about to write a 600 million pound check got nervous, put it on hold to see what happened with COVID and COVID and COVID and COVID. So that 2017 deal, if we had completed that deal in 2020 or 2021, would have looked like the smartest most aggressive investment deal ever.

39:15The fact that COVID happened and then it changed our world. So much and so many other things happened but the 2017 deal came so close to working amazingly for the company and all the investors. In hindsight, it didn't. But we were this close to getting the deal done and the other party pulled out because all of the hospitality was closed during COVID. Of course, of course. And somebody looking at the outside, you don't see those elements of the story. It's only because I'm now not involved in the business that I'm able to kind of speak about some of these things that happened along the way. Then COVID happened, had a huge impact on our business, our hospitality side.

39:48Hospitality completely changed with COVID. the beer market changed. What I often say to so many people in the industry is like, where did all the beer geeks go? The beer geeks disappeared with COVID. And beer as a category then started going to decline. And then it was a bit more of a struggle for us. And we've always had so much controversy and media noise. It was a struggle for us as well. But we came so close to making the 2017 deal be amazing. And in hindsight, it was probably, in hindsight, would I do it again, knowing how things have played out? Probably not on those terms. But then you couldn't have done.

40:19you couldn't have known and it came this it came this close to being absolutely amazing but i mean that's the stakes and that that's the game interesting that's really interesting i didn't know that yeah that's that's really really fascinating because the whole thing with entrepreneurship is you'll have the best plan ever but the world will just keep hitting you with different stuff what is the biggest lesson what is the biggest lesson from that i mean the big the biggest lesson for us and it's a quote that we went back to time and time again when we were leading the team and the quote sometimes attributed to darwin but i'm not sure if it's kind of pure darwin or not but the quote is it is not the biggest the strongest that survived but it is the most adaptable to change it's always attributed to darwin apparently never said it yeah but no it's still valid yeah yeah so that speed that speed to be flexible to adapt to be nimble to take feedback to change and we had this mantra which is we want to count time and dog years if a normal company does something in seven days we want to do it in a day if a normal company does something in seven months we want to do it in a month and speed for me is such an underrated competitive advantage because it's never the plan that succeeds the plan hits reality you tweak it, you adapt it, you dial it in, you optimize product market fit, you get feedback from your community.

41:41The quicker you can do those cycles, the quicker you can get to that optimal point. That was my colleagues who came back from Asia said that was the fundamentally impressive thing in Asia. That by the time the Western company, you know, had it oven ready, okay, the Eastern company was on the sixth iteration. And who's going to win? Who's going to win? Who's going to win? Exactly. who's going to. So what happened after that? What happened after that? So COVID happened and COVID for our business was insane. I slept in the office for a few months. I had a sleeping bag and an airbed. I didn't think our business was going to make it at all through COVID.

42:20We had 125 locations closed. We might have had to close our production facilities. Before furlough, we had two and a half thousand staff that we didn't know what to do with and I came very close to getting them all jobs in Tesco because Tesco needed people. So we did a deal, but then furlough happened. And then we also kind of just hit this, this media crisis. So we had this open letter from former colleagues saying that we were a terrible company to work for and I was a terrible boss and with this toxic working environment. And the media just took this narrative unquestioningly and it just, the narrative went everywhere.

42:51So it was such a difficult few years, A, because it's just so far away from any type of reality whatsoever. But I mean, the narrative it was so tough for us as a business so we kind of kept on going we doubled down on community and before and after that letter we were kind of independently and anonymously voted for by our team to be in the top 100 companies to work for in the uk so it's just one of these things it is so bizarre that a narrative that is so untrue sticks so much and it can apparently goes to that kind of uk kind of build them up kind of knock them down down things as well so i mean that was really tough for us as a business we fought through that we fought through covid and i mean business was doing reasonably well when I stood down as CEO.

43:32So I stood down at the start of 2024 for the six months preceding that. We were beating the category in UK supermarkets by almost 30%. We were doing well. We'd kind of done well the years before. You'd opened hotels, in fact. We'd opened hotels. So beer hotels, yeah. Beer Hotel Manchester, Edinburgh, Columbus. The one in Columbus was put in the Time Magazine, best 100 place on the planet. We had fridges in the shower for shower beer. The mini bar was filled with kind of hand-picked selection, the best beers on the planet. So I stood down in 2024, the start of 2024. Since then, the business struggled.

44:04The market has been tough. And the business was actually sold on the 1st of March. That was my first wedding anniversary as well. I was bidding. It was a competitive bidding process for the business. And I narrowly, narrowly came second. So I came incredibly close to buying the business back. And it's been so frustrating because my bid to buy the business back, for me, the business is the community. So there was a few key cornerstones of my bid to buy the business back. One, the equity punk investors kept their equity in full, and the winning bidder didn't do that, so the equity punks got wiped out.

44:37And you got the grief for that. And I got the grief for that when I was fighting tooth and nail to save the equity punks. I was also going to immediately reinstate their real living wage, because it's core to everything I believe in. And I was going to save hundreds more jobs and ended up being saved. So again, it was incredibly frustrating and came this close to buying it back, but it would have kept the equity punks fully in the game, protected hundreds more jobs and reinstated their real living wage, which is core to what I believe in. So very, very narrowly missed out on buying the business back.

45:06And then I take all the grief for what happened with equity punks when I was fighting tooth and nail to keep them off, which is kind of indicative of how things are. So it's very similar. In the case of Leon, the founder did succeed in buying it back, in fact. Yeah. Because I have this fundamental, it's simply an empirical observation that founder-led and family-owned businesses are in almost all respects over the medium to long term, more impressive at innovation, better at brand building. In other words, they're capable of doing things that aren't massaging figures for the purpose of quarterly reports.

45:41Okay. And they're capable also of thinking across different timescales. Their risk-reward calibration is completely different. And there's quite a lot of evidence that suggests that. And by the way, you know, there's a bit of a problem, which is that most of the UK's hero companies, I think, are actually either privately held in some way or they're governed in a very... I mean, obviously, if you're Rolls-Royce aero engines, you're not going to be a totally short-termist entity, you know. But Jaguar Land Rover's family-owned, you know. Okay, you've got Octopus Energy. It's totally founder-led. Genius founder.

46:15JCB. Genius founder. Greg is an absolute genius. I completely agree. And you have all these cases. And the one thing that does piss me off, and I complain, you know, because I write in journals, I'm not a journalist. I complain about all this all the time, which is that the negativity towards even Britain's most heroic and innovative companies, the fact that we don't treat them as national champions or national heroes, whether it's Ocado or JCB or, you know, whatever it may be, is, you know, is disgraceful. um and i i don't because in the united states they do it's so different in the u.s to some extent i think it's too extreme in the other direction you know uh you're really rich wow you're great how did you make your money let's not ask i mean you know you know the u.s is i think slightly too unquestioning in that respect but the tall poppy question that you get in in the uk and australians apparently say it's the same there is is too extreme it's it's now i get you're a journalist if you write nice things about a business everybody assumes you're doing pr yeah um you know i kind of i kind of get the fact that journalists are always trying to be woodward and bernstein and they're always trying to do someone down but the overall effect of that bias is pretty grubby i mean the impact it has on investment on job creation on taxes paid in the UK is absolutely massive and media is now governed by clicks.

47:45So the more clicks something gets, the better it does. So everything is optimised more for clicks. So like the narrative with the DrewDog business, it was just so clickbaity and how clickbaity it was. It was like, is this actually true? Did this actually happen? Is there any substance to this? No, no, no. But it is so clickbaity, so let's hammer it and hammer it and hammer it anyway. and I mean it's just a shame because the media narrative has definitely had an impact on what happened with business how many jobs in the UK has been lost because of that false narrative how much investment how much tax and I mean that Pete Rudog was a UK business like winning internationally and that's what the UK needs because to win in the UK is good but ultimately it's displacement the way the UK economy wins is by strong UK businesses winning internationally which we were doing so like I said second in the in the process to buy the business back really disappointed for Equity Punks so here's what i'm going to do and nobody knows this yet i'm going to announce it in seven days time but this is going out in a few weeks yeah so it's hopefully out in the public to be okay post embargo yeah we're happy yeah so we'll delete it if if for some event thing yes yes yes yes if you want us to bring it earlier we can do that okay so here's here's what i'm going to do i feel an obligation to all of the equity punks who invested the business they trusted in me to build a fantastic beer business for them and also give them a financial return on their investments I feel the weight of that obligation and it's an obligation I'm not finished with.

49:09So in a few days time, I am going to announce a new beer business and it comes with an open invitation to every single Equity Punk investor. They can claim the same stake that they held that got wiped out in the new beer business for free. I'm going to fund it. I'm going to dedicate myself to building it. There's no catches. They don't need any cash and they're going to have a stake in the new beer business and let's see if we can build something even better second time around. That's fantastic. That's fantastic. But this is the reason why we created this podcast. And this is the reason why I do what I do.

49:43I'm very pro-founder, right? I think the goal is to help give founders energy and support to be able to do what they need to do. Because I'm on the camp of in the UK, and I've been in the UK, in the US, in the Middle East, everywhere. We have the best crop of founders. We have the best crop of founders with the infrastructure to foster those founders. Like, so many are going to the U.S. So many. We also, by the way, in defense of the U.K., the U.K. consumer base is reasonably adventurous. Yeah. Okay. Yeah. We try things. Broadly speaking, we never mention this, but to be a successful entrepreneur, you also need to have reasonably adventurous buyers.

50:27Yeah. And, you know, by the way, there are whole areas of the economy where that's the problem. NHS procurement, for example, I suspect is a major stumbling block for any kind of person hoping to significantly innovate in health provision. But so, no, you're right. I mean, but the people here are fantastic in many cases. Oh, yeah. I always say, like, if you, the reason why I think that UK, European markets are really interesting is because you will know whether you have a good product or not. Right? Like the marketing and everything can scale in other locations, but quality of the product in terms of like, we're very critical.

51:09Right? So if something's not good, right? Like, you'll know about it. So if you can use it as a trust, as a quality parameter, but then export that to other locations with great storytelling, that's a really great way to scale. I think that kind of critical cynicism as well is why celeb-backed businesses work so well in the US, but not in the UK. In the US, it's, oh my God, she's got a tequila. In the UK, it's, what the fuck does she know about dog food? Exactly. Why has he got a gin? Is that just that kind of ex? And by the way, on the new beer business, um ut gentlemen are the first people to hear the name of the business as well okay as a two of my kind of most respected market here is you can give the name a thumbs up or thumbs down we're going to do this live so the name of the new beer business is second best because the second beer business that i build with the community is hopefully it'll be the best one actually behavioral science me likes it because it's um uh it's technically i think it's called the pratfall effect, which is that it's kind of under claim over deliver.

52:11So this is fantastic. No, but even better. I love it. Also, you can add it to a whole range of, it's a brilliant thing because you can say, second best IPA, second best. Yes. And we're going to do a few interesting things. So we're going to focus on getting beer into people's hands super quickly and super fresh. So the best way to drink beer is from the tank. This way is the second best. We're also going to be so stringent and god of quality. And it's small batch, it's artisanal, it's draft. So is every batch going to be amazing? Is every batch get to be 10 out of 10 no so we're going to have second best and for those batches that are still delicious beers but not quite that good we're just going to over label them with third best and then we're going to sell them a little bit cheaper so we're not going to waste it but then everything was second best on it you've got this done is very good but then hopefully hopefully the second beer business we build with the community is the best one and we take advantage of the highs the lows the successes the failures the mistakes the challenges all of those things put that into practice and build something that's that's even better the next time but they always I say that the person that comes second is usually the one that builds the best one.

53:10Let's see. So you also produce small batch stuff and it'll allow you to be highly experimental in the same way. Yes. Sort of the Zara of booze. Yeah, and I think this time, so I built a beer business that did a million cans of beer a day. This time, there's going to be a pure obsession and a blunt refusal to make any type of compromise. This is just about the absolute best quality beer we can make. and if that means supply chain has to be a certain way and that means we can't do a million cans of beer a day, I don't care. It's live and die by what's in every single glass, every single bottle. Again, I'm selfish.

53:44I'm doing it for myself. I actually drink less beer than I used to and if I'm drinking beer, I just want it to be 10 out of 10, the best it can be and we're just going to be so obsessive on that. Which, by the way, I think is in line with general consumption patterns, which is volume down, quantity down, quality up. It's generally, yeah. And if we can scale amazing and if not, we're just going to do something that we're insanely, insanely proud of doing. You sound very fired up by this. I mean, I've got a bit of a chip in my shoulder about how things have played out. And again, I think a chip in your shoulder is a pretty good motivator.

54:16And I love beer. I love building things. I love the community. I feel I owe this to the community as well. And like, hey, starting off in a business, the overwhelmingly likelihood is you're going to fail. So that is what we're facing with. But we are going to try incredibly hard, put everything in line for what we believe in. and see if we can build something amazing second time. So this is what I really like, speaking to you and speaking to founders, because Britain needs founders. We need more, right? Because if you think about the great British brands, a lot of them are not even British-owned anymore, right?

54:49Because of obviously selling businesses, etc., etc., and IP, etc., etc. So we need a new resurgence of it coming in. And the thing I don't like is when I listen to conversations and everybody talks about the rosy side of building a business but they don't talk about the real practical things that happen when building it and the fact that going back to what you said the near miss right and i always used to say to the team this is supposed to be difficult yeah if this was easy everyone would do it and success wouldn't mean a thing and it's almost if you go through something incredibly difficult that's where you create the value so you should wear those kind of battle scars as a badge of honor because anyone trying to do the same thing is going to have to go through something equally difficult and i always say to the team as well when things are going well everyone looks like a superstar it's only when things are really really tough that is when we need to be at our best and that's when our kind of time to shine is it's it's supposed to be difficult and it is like building anything that's why i've got so much respect for anyone who builds and if it's a success it's like just so much respect because i just know how difficult that entire journey is there's two films that i like to um look at and the both Nolan films ironically right and the first one is Batman how even though he's the hero everybody ended up turning on him anyway and and that's when you become a founder you're not going to be meant with roses and praises you're going to do the right thing despite how you're perceiving the process of doing the right thing as long as you keep it as the right thing for the people if you want to keep everyone happy give away free ice cream yeah and the second one is there's a bit in Inception where I think he asked for a guarantee that if he goes with him, will he get a guarantee?

56:30And he says, there's no guarantee, basically. And that's what it is. It's a leap of faith, right? And... Quite a movie, by the way, as well. Oh, what a film. And despite the hardship, the danger, the challenge, you should welcome the idea that you have to go in pursuit of the cause regardless of the outcome, right? And I think that That's the thing that we should welcome more of here, because if more people try, the butterfly effect we can create in this nation can be phenomenal. I think we need more builders, we need more creators, and we need more people to take on the battle scars. And I guess a big difference probably, because I do think that what happens with, because there was an era of businesses that were built to be completely opposite to the old establishment.

57:17And even when I started building my company, I was like, yes, there's things that agencies shouldn't do, but there's also the realities of building that we should be very forthcoming with. And you touched on this a little bit, which is, we're doing something very hard, right? It's not going to be easy. You're going to be tested as much as you will be tested, but are you going to come on the journey anyway? That's not the new pitch, as opposed to, it's going to be great and lovely, and then when it feels like a rag is being pulled up, when things actually change. Trading at Schwab is now powered by Ameritrade, unlocking the power of Thinkorswim, the award-winning trading platforms loaded with features that let you dive deeper into the market.

57:57Visualize your trades in a new light on Thinkorswim Desktop with robust charting and analysis tools, all while you uncover new opportunities with up-to-the-minute market news and insights. Thinkorswim is available on desktop, web, and mobile to meet you where you are. It's built by the trading obsessed to help you trade brilliantly. Learn more at schwab.com slash trading. Starting a business can seem like a daunting task, unless you have a partner like Shopify. They have the tools you need to start and grow your business. From designing a website, to marketing, to selling and beyond, Shopify can help with everything you need.

58:32There's a reason millions of companies like Mattel, Heinz, and Allbirds continue to trust and use them. With Shopify on your side, turn your big business idea into... Sign up for your$1 per month trial at shopify.com slash special offer. Yeah, completely, completely agree. And I think if I look back at some of the kind of complaints we had against kind of rurugs of culture, I think people joined us and we were growing at 100 % year on year, which is not an environment for everyone. And they expected the perks, the benefits, the environment of a steady state corporate job, but the opportunities, the excitement, the dynamic nature of something that is kind doubling year on year on year and when your business has grown that quickly it's like you're trying to fix the airplane and fly the airplane at the same time now with no manual yeah and i love businesses that grow that quickly because the opportunities for personal development for personal growth within it is amazing but it is a very unique environment and some people love that but for other people they just don't like without taking sides in this particular case where i don't have evidence.

59:37There is this very strange thing where the rules of what is an acceptable corporate culture seem to be very uniform. Okay. Now, to be honest, okay, if you took random people and put them into Amazon, for example, okay, some of them would love it, some of them would hate it. Okay? Simple thing. Now, to be honest, Amazon makes no secret, nor does, say, News International, if you work for the Murdochs, okay, they make no secret of the fact that this is this particular kind of culture, which some people are drawn to, which is, it's a culture of hard knocks, and it's a little bit brutal. Equally, there are other places you can go where the culture's unbelievably, you know, fluffy and soft, and some people like that.

1:00:18Now, it seems only reasonable to me that provided a company is honest about the kind of cultural environment it offers, you know, there are employees who absolutely would love to work on, you know, the trading floor or work in an ER, are there people who'd find working in an ER unbelievably distressing? No, the employment market should cater for different kinds of people. And provided the culture is honest about what the culture is, if you worked in an advertising agency and you didn't like swearing to take the extreme case, fuck off. OK, because this is getting really, you know, what we're having is HR, which is basically calibrating everything for the world's most sensitive person.

1:01:00Okay. You know, or actually it isn't even that. It's the person who's most sensitive on behalf of someone else. Who might not even be offended. I use a Shackleton example, right? Like, yeah, they crossed, I think it was the Antarctic, but it's still the Antarctic. It is the ad, the famous glorious ad by Shackleton. Yeah, but it's still the Antarctic, right? Like, we're not going to the Bahamas. We're going to the Antarctic, right? Yeah. And it's almost like if you say we're going to space, like you know that you're going to be doing, you're going to be expected to do normal things in abnormal environments, so you need to do training.

1:01:36There's a lot of things that go into that. And I think that that is the new conversation that founders are starting to have, which is, would you want to, like here's all the red flags of our industry, of how we operate, do you still want to come and work here? Yeah. Right? As opposed to, I need to sell you that this is the reason why you should come. This is not to say that toxic cultures don't exist, because they do. And by the way, the biggest problem a toxic culture has is not only for its employees, it's for the organization as a whole, because cultures can turn, in all kinds of ways, by the way, can turn deeply poisonous.

1:02:11And actually, when I first joined Oglebay, I always thought the original CEO of Europe, and I apologized to him for this, only a few weeks ago when we had lunch, I said, I always thought you were excessively paranoid about the culture. You know, you get really upset if an office wasn't sufficiently painted red. And he got really down into the weeds about that stuff. And I always thought, you know, loosen up a bit. And then I suddenly realized you only know the importance of that if you've seen a culture die. Yeah, yeah, yeah. And so all that stuff is vitally important. But at the same time, you know, nobody can complain to HR that working in a Bromley public library is boring.

1:02:53OK, but that's, you know, at the extreme, you know, you get a massive, great spectrum of different company cultures. And you also get subcultures, by the way, that within a organization, there'll be a group of people who are fundamentally, you know, slightly off to one side. That's not necessarily undesirable either. So this demand for complete uniformity strikes me as totally ridiculous. Is there, just a behavioral science question, is there a way to make beer shareable? Because now obviously in American sports bars, you have the pitcher system. There's that weird Danish place where you have a kind of tap a bit like a petrol thing.

1:03:30I'm also intrigued. Actually, I'm very interested in the idea of the schooner, that Australian two thirds of a pint measure. I love the schooner. You're a fan as well. Well, yeah. I think it's now legal to sell beer in the schooner, which is actually the right amount. In my opinion, is actually the right amount. And do you know why it's legal to sell beer in the schooner in the UK? Because we, back in 2011, petitioned the UK government to make the schooner measure legal. Perfect. I'm also a big fan of micro dosing beer, too. I think you should be able to sell beer shots, you know. But I mean, I'm intrigued by the fact that wine, I think, enjoys a completely unfair advantage, both in restaurant tables and in other settings because you can buy a bottle for the table and everybody shares.

1:04:13Pizza enjoys an unfair advantage in the food world because it's shareable and dividable. And I've always thought if you could... The only other drink that seems to have that is Pimms for some magical reason. And I've always thought if there was a way of basically having beer where, okay, we're all in on this beer. Some of us will drink more. Some of us will drink less. In other words, so in other words, you know, the wine drinkers have this thing. that don't say too much. We'll all have a good, red or white, and then they decide on red, and then the beer drinker's left to feel like a bit of an arsehole for wanting to drop out of the round system.

1:04:47And I think it's just peer pressure, and I think it needs to be resisted. So one of my favourite places to drink beer, and you might find some of this coming through in what I'm building, is the German city of Cologne. I've been there. Kölsch. Kölsch, yeah. So they've got a beer style called Kölsch. You've got a beer mat, and they come around with Kölsch. It's a bit like flat white or fuck off. It's amazing, yeah. It's like Kursch or whatever the German for fuck off is. Okay. Because it's assumed you're drinking Kursch. Yeah. And they come round and you grab another one, they scribble something on your beer mat, and then you settle up at the end.

1:05:21Yeah, yeah. Fantastic place to drink beer. Yeah. You get fresh beer because the beer's not sitting in the glass for too long. It's cold, it's fresh, it's beautiful. Small glass and they just, if you don't want it, you put the beer mat on top of the glass. If your beer mat's not on top of the glass, they just fill it up. So it's like communal, it's interactive, it's so cool, and it keeps the beer so fresh in such good condition, and the beer you drink is perfect. And I'm surprised that no one has done something like that in the UK. No, no, no, because actually you could. It's not illegal to do it, and presumably because post-COVID you're allowed to order at the table, all those things became possible.

1:05:54Interestingly, by the way, ordering at the bar, this idea that in Britain you always order beer at the bar in a pub isn't actually a time-honoured tradition. I think it happened in World War II. There was just a shortage of people. But traditionally, the saloon bar would actually have table service and the public bar would have bar service. I was very worried because I spoke to the chief barman at Heineken. And I thought I wind up people who like football, by the way, by going they should make the goal bigger because the school line is too small. And football plans go absolutely insane. I thought I'd wind him up by saying I think pubs should offer the option of table service.

1:06:32and weirdly rather than getting wound up he said i've been saying this for years because i can't just like winding people up because if people have a real sort of fetish it's like watch fetishists i always point out that you paid 10 grand for that watch but you're setting it from your 20 quid seiko okay you know and but i've always thought that actually uh uh the uh having a variety you know because people's time is scarce. And if you go out and the round system means that one of you is always absent 50 % of the time, it does kind of mess up the evening. But the schooner is another thing, which I think is a great...

1:07:09Congratulations on that. Two thirds of a pint, whether you're having one, whether you're having two, it takes away that ludicrous, bifurcated, do you want a half, do you want a pint question? And a pint for me, I never drink a pint because it's just too much liquid. By the time you get to the bottom, it's flat and it's warm. And I think it's just not a good way to showcase something which is draft nortizzle. It's bulk. It's lowest common denominator. So I love a schooner. I think it's the perfect measure for beer. It's an Australian thing, I think. It's Australian. It's Australian, yeah. Outside of Brewdog and Second Best, you're obviously working on Social Tip.

1:07:46Can you tell us a little bit more about that? Yeah, absolutely. So Social Tip is essentially my philosophy of community engagement distilled into a platform. So Social Tip essentially turns a business's customers into their most impactful media channel. And so much has changed in advertising and marketing. And I believe customers as media is the future. And we've seen this kind of big trend from global to mid-tier to micro to nano influencers. I believe that ends up with everyday people. So this is word of mouth, peer-to-peer, human-to-human digitized. The business has been going for nine months.

1:08:21We've got 130 ,000 users. We work with Starbucks, Nistresso, Marks & Spencers, lots of amazing businesses. And the results that we're able to generate is amazing. So you say thank you for micro or nano influence effectively, which is, of course, as you mentioned earlier, in the US, it might be a celebrity obsession. Here, these are the most credible people. Yeah, because who do you believe? Do people believe adverts anymore? A little bit. Do they believe influencers? Maybe a little bit. You believe your friends. So for us, our whole point is rather than pay, sorry to my lovely wife, an influencer like my lovely wife,£10 ,000 to do one post, give a thousand of your customers£10 each to do a thousand posts.

1:09:01More authentic, more organic, more virality. And you also get significantly more views of something which is super authentic and genuine. And I say the influencer point in jest because I think the two things work so well together. Influencer, higher up the funnel. It's awareness. It's splash. It positions you in culture. where Social Tip kind of gives that ripple effect and just pushes people towards purchasing. So the two things work so well together. By the way, a couple of two things to support it. One, of course, it's very close to the net promoter score idea of would you recommend this to your friends?

1:09:30Okay. Now, what's interesting is billions have been spent on the net promoter score, but nobody's thought of actually taking it into action, which is why not help people recommend this to their friends? Okay, which seems perfectly relevant. Those friends are highly credible because they've got reputational skin in the game. You wouldn't recommend something to somebody if it would end up making you look stupid. So there's automatic credibility, I think, installed in that, automatic believability. And also it captures micro moments, which I think are really important. So I think it's actually really, really important, this, because I also see a world in which if we're surrounded by AI slop, we will increasingly revert to just trusting each other.

1:10:15Because who else? Everything else is fake. Word of mouth is the only thing I can believe. There's a really important thing as well, which is that in terms of if you're an innovative business, if, okay, if you ask me, why did you buy an electric car, right? I babble on for ages about all manner of environmental and questions of efficiency. The actual reason was because my brother bought one first. And if you look at actual buyer behavior, and there's a company, you know them well, Herdify. Yeah. Okay. who do this, what you realize is that a lot of people will only try something new if they've heard a good thing about it from two, three or four people.

1:10:53And then, you know, people's threshold varies. But I asked myself the honest question, had my brother not bought an electric car first, would I have bought one? No. And the great quote from Tom, which I think is exactly what Social tip is doing at a sort of amplified scale is Tom said, I'd rather sell five solar panels to five people who live in the same street than 20 solar panels to people who live 15 miles apart. And the reason is effectively that human behavior is much, much more contagious than we ourselves realize. Yeah. Because I wouldn't have said I bought if nobody, nobody, I never would have said I bought an electric car because my brother bought one.

1:11:36I asked the backwards question, which is, would I have bought one had he not bought one first? And I came to the conclusion, no. And it's so true. How do people find out about new things that they buy? The vast majority of that is from people they know. So all we've done is built the infrastructure for that to be digital. And my favorite form of marketing is word of mouth. This is just digital word of mouth. And it's also rooted in a purchase, which is so important. So before someone can post, they've got to upload the receipt. So it starts with a verified purchase, which means the company's made a sale.

1:12:04but it means when they're posting, it's genuine authentic advocacy. They actually spend their own money on the thing. That's phenomenal. Money's a truth drug. That's the great thing about capitalism. Apart from anything else, it's the only way you can actually find out what people really want. Yeah, and by the way, somebody spending money is a truth drug, but then them advocating and putting their reputation on the line is even further. Right. Because one is an individual experience. The other one we talked about, like, alcohol versus smoking. Right. Like like one impacts you as an individual.

1:12:40Obviously, it has a ripple effect over your loved ones, but it's you. Whereas drinking could lead to other things that impact other people. Right. So if you're putting yourself out there on behalf of an organization, there's another reputational damage that could happen if it's the wrong. One thing to measure here, by the way, is the effect that the feedback has not only on future or present customers, but also on the staff in any service business. So one of the most extraordinary stories I heard was from someone who needed a favor from people who worked in, funnily enough, in hospital A &E. And they said, what one thing they said, once we treat people in A &E, we have no idea what happens.

1:13:21OK, what happens? Am I wasting my time completely? And they said, all I want is to know three days later, this person got better and is now feeling fine. Now, the effect on motivation, on feeling you're making a difference, if and actually, you know, I always argue that a really good service experience is like a brand quake. I think there's an American agency who call it this, you know, that if someone's just really, really good to you on a personal level, it's extraordinarily potent in terms of your future behavior. And so it'll be really interesting to actually record, make sure that the recommendations feed back to the people involved, because you've got a staff motivation tool on your hands as well.

1:14:02I love the staff element. One thing that we kind of dug into recently was the impact on putting the money into the customer's pocket. So if we look at one of our partners, they put£20 ,000 into their customers' pockets. 95 % of those people are likely to buy again in the next six months. Wow. So the fact that they're buying a cocktail on a Saturday or a coffee on a Friday with money, they're trying to put there, they just feel so much more loyalty towards that brand. Yeah. Well, James. That's fantastic. That's fantastic. We're going to talk about this afterwards, but this has been phenomenal. Thank you for being so kind, so honest with everything.

1:14:34And I think that our audience will really, really value it. So thank you for coming down and we really appreciate this. This is a brilliant idea though. Thank you. Thanks for having me and love the chat. Love the chat. Thank you.

1:14:53Your team just added its 67th AI tool and also your 67th security blind spot. The good news? The Vanta agent works like a GRC engineer in the background, finding every app your team uses, scoring the risk, and drafting fixes for you. Vanta is the platform used by over 16 ,000 fast-moving companies like Ramp, Cursor, and Harvey, who are shaping the future with AI and staying ahead of AI risk. Get started at Vanta.com. Have no fear. Chosen Foods is here to defend your favorite foods from the forces of seedy oils and sketchy ingredients. With cooking oils, salad dressings, and mayo, all powered by the good fats from 100 % pure avocado oil and simple, delicious ingredients.

1:15:34Chosen Foods.