S8E8 - Matt Chandler, Principal @ Octopus Ventures

In this episode of Riding Unicorns, James is joined by Matt Chandler, Principal at Octopus Ventures, one of Europe’s leading early-stage venture capital firms. Known for his focus on consumer tech, Matt shares his journey from aspiring oil painter to venture capitalist, weaving creativity into every step of his career.

Matt discusses the unique dynamics at Octopus Ventures, including their thematic investment approach and their mission to back transformative startups across sectors like gaming, consumer AI, and niche communities. He provides fascinating insights into the "practicalities of change," lessons learned from his entrepreneurial past, and how to maintain focus on core customers during periods of growth.

The conversation dives into Octopus’s recent investments, including their backing of Onibi, a groundbreaking MMO gaming platform introducing innovative physics to user-generated worlds. Matt also explores overlooked themes in venture capital, including loneliness, consumer AI, and the evolving world of niche communities.

This episode is packed with actionable insights for founders and investors alike. Tune in to hear how Octopus Ventures is championing underdog consumer startups and how Matt’s creative approach is shaping the future of venture capital.

Don’t forget to like, subscribe, and follow The Riding Unicorns podcast on your favourite platform and stay connected with us on social media for more inspiring episodes! 🎙️🦄

Transcript

  Welcome to the riding unicorns podcast. This is a podcast, all about venture capsule and fast-growing startups. Each episode is packed with insights, stories, tips, and advice to help you understand what it takes to build or invest in a rapidly scaling business.  On Jane Springle. My co-host is Hector Mason. 

We're both VCs based in London. Whether you're a founder VC angel investor, or just curious about the startup ecosystem. There's something here for you. Every episode dives into unique topics related to tech and venture capital, offering valuable takeaways and actionable insights. We hope you enjoy the show and find something useful in each discussion. 

Let's get started. 

 Hi Matt, welcome to Riding Unicorns. Obviously we know each other, but for the benefit of the audience it would be great if you could just do a quick rundown of your career, your current role at Octopus and maybe a brief intro on Octopus Ventures as well. 

Yeah, sure. Thanks for having me again. Maybe I should take that in reverse order.

So Octopus Ventures, we've been around for over a decade now, generalist early stage investors. So investing between one and 10 million pounds uh, typically into UK based companies, but increasingly uh, looking beyond those shores as well. And we have a kind of concept of pods where everybody here belongs to one of.

Five purposefully broad thematic focus areas. So FinTech, health tech, deep tech, bio, et cetera. And the reason for that is to develop pattern recognition and just make sure that we can support our portfolio of founders with similar ways of thinking and similar types of companies within those, those pods, but holistically speaking, where.

generalist investors.  In terms of my career  and how I got there, I mean, I think my start in this whole world was probably quite atypical in the sense that I started life wanting to be an oil painter.  Uh, Just, I love art. I still love it, right? I'm a hobbyist today. It's what I spend quite a lot of my weekends doing.

And the first money I ever made in this world was as an oil painter. But I think it gave me this real sort of passion and interest in, you know, The creative arts, which is where I spend most of my time actually at Octopus is focusing on consumer and consumer tech companies. It's sort of a thread throughout my career, if you like, but anyway, after a while, I realized that I was probably pretty crap at painting and the sales dried up and I should go and professionalize somewhat.

So you step forward a little bit uh, university, I was up in the Midlands.  And like, for me, that form of education, it just never really worked, right? I never really sunk in sitting in an amphitheater being spoken to with someone that you don't really have an emotional connection to. So I would spend my time going out into manufacturing sites because it was a kind of old textiles part of the industry.

The UK up in the Midlands and got into manufacturing clothes and t shirts and jumpers, and we started selling them up and down the UK and it started paying off some of those university bills. And it gave me that bug, it gave me that spark for building stuff and maybe being a little bit contrarian. And then if I fast forward a couple of years.

In 2014, co founded a business  uh, we had two co founders and it was a business called Mojo. And what we were trying to do was aggregate The UK's beauty service providers for male beauty, which I didn't subscribe to all of these myself, but think barbershops, think spray tan salons, et cetera. The fact that I didn't subscribe to all of them is actually probably one of the reasons why it ultimately failed.

But back in 2014, you had a business called Wahanda, which is now called TreatWild and it's become a massive success. And most of the listeners probably have come across it, but they focus just on women. Back then. So we thought men's market is more fragmented, better suited to a marketplace model and two years of aggregating all these service providers onto our app.

 Um, We had to, to shut it down. And I mean, if you,  if you let me sort of explain a couple of reasons why I think we failed, I will. Cause I think it's, I think it's quite useful, right? Firstly, we were really young. We didn't know what we were doing. And the three co founders, our skill sets in hindsight were very, very similar. 

But in terms of business terms, we,  there's kind of two major moments in the company lifecycle. Number one is we didn't really fundamentally understand how Barbers worked. So after being in there for about a year selling to them, we realized, you know, it's a cash industry. And then secondly is something I now think of in my career is practicalities of change.

Like what practically has to change in terms of their behavior to adopt your technology. You go into a barbershop, they don't pull out their phone, they're not checking if a booking's been pushed through onto their iPad, they're just cutting someone's hair. And so we weren't really able to change that behavior. 

The second thing that happened is,  I was having a coffee with one of our investors in a coffee shop as a sort of proxy board meeting and after that ended I got a tap on the shoulder. By this lady who said, I'm really sorry. I've been I've ever heard your conversation and I work at a private equity fund.

We own a big chain of salons. We're looking for a software system like yours. Can you come in and pitch? And there we were bright eyed magpies looking at this big new shiny thing and we go in and pitch. Basically a feature set we didn't quite have. Then spend six months building out that feature set. And we really neglected our core business,  that relationship, that partnership kind of never really materialized,  it's actually another story that probably one for a different day.

So I can speed up my intro. But we had to shut the business down,  but I fell in love with our ecosystem and wanted to stay in it. And then I had a little stint at a different fund and then moved to Octopus.  About three and a half probably four years ago now where as I said a focus on consumer tech investing  

 great.

That's So interesting there's loads that we can dive into there 

No, it's 

it's it's awesome and let's just quickly talk about that big customer thing because I experienced that as well with my own startup suggestive. We landed probably our ideal client within six months of launching when we basically had a You You know, demo that barely worked but managed to get through the pitch with it.

And then they signed this big contract and we ended up almost becoming like an agency for them and not focusing on what the market needed. So it was just like, keep them happy and it will keep the lights on. And it was a real issue. We almost lost. Well, we lost probably a year and a half of innovation doing that.

So is that sort of what you experienced as kind of like working towards, you know, a big corporate, you know, what their priorities were versus what you've maybe instinctively thought the market needed and then, and then it not materializing and sort of losing the way slightly. 

Yeah, absolutely. I think the, the big challenge we face is we were trying to build a consumer proposition and cater to consumers.

Consumers were our users in our core business. And then all of a sudden we were shifting and our customers and enterprise, and there's a fundamentally different belief systems, different ways you think about building product, different ways that you interact. And if you take your eyes off what your tens of thousands of customers, individual humans want, and you start focusing entirely on one decision maker and enterprise.

You build an entirely the wrong direction. You, we wasted our dev resource. We had finite capital and all of a sudden when we realized we'd made this mistake, it's too late to turn around unless we went to the markets  and raise more money and we're honest about that. But it wasn't really the time or the environment in which to do that.

So. You know, probably pretty similar challenge. And, you know, we see this often at the early stage and just always the sort of rhetorical, just keep focusing on who that core customer is, unless you're doing a wholesale pivot. And I actually had a, I did some interviews, about 10 interviews with 10 of our biggest  Uh, with the CEOs of some 10 of our biggest octopus portfolio companies quite recently and, uh, asked about learnings.

And one of the founders, one of those CEOs said to me,  he's a, the big issue they had as they scaled is they lost sight of their customer and they lost sight of the language internally as how to how they referred to their customer, and this is a company in the healthcare space selling via, uh, employees.

And I find this really interesting, right? Because they would talk internally about a book of business. It's very transactional. And when he realized that, he went in and he changed that language to patience. Now all of a sudden a patient is thought of in a very human single consumer perspective. And he went as far as going, you know, one of their customers was a big trucking company in the US.

And the mantra internally for a while is go and talk to the fucking trucker guy Don't talk to the enterprise buyer go and talk to the fucking trucker guy And so I think that's like quite a useful analogy to use in those types of cases  

definitely and  That's so interesting about just changing the internal  Um, those semantics can be so important.

We've just released our episode with Rory Sutherland and he's all about, you know, creative positioning and psychological positioning and stuff. And that can be internally within a business as well as to the outside world. So that's absolutely fascinating. And I think it's not really something that's.

Being brought up that much on the podcast. It's like as you're building a company, you're really hammering home Messaging internally and and and what that is and how you speak about your customers so so important so you don't lose sight of them the other thing you mentioned in your intro, which i'd really like to dive into is the practicalities of change um, I think that's a Fascinating concept so  often people talk about, you know, maybe something that's 10 better Not, you know being a nice to have not a need to have and we're looking for 10x better not 10 better And I think that plays into this a little bit Do you want to just talk a little bit more about that?

And maybe if there's other examples from your own experience portfolio of, you know, how you spotted companies where  the practicalities of change conundrum kind of made sense. 

Yeah. I mean, I think there's a good example as to it's another challenge actually around where practicalities  of change.

Cause the company to fail. It was a business that octopus backed a long, long time ago, which was selling remnant legs for private jets to um, uh, drive more revenue. Right. And it's, uh, the challenge that that business faced. Was  every incremental seat sold had a knock on impact on other parts of that service provision.

So very specifically the cleaners So all of a sudden these jets were flying two times the amount of legs because they were full up and these were people that Not normally would wouldn't normally be on those kind of experiences and they're they're having a good time They're opening up champagne and the requirement to clean increased yet The business hadn't thought about the fact that those cleaners Is were already capped out.

They were tired. They were working incredibly hard over one leg. And now they have to do double the workload. And the practicality of change for those cleaners was too vast a jump for them to make. They couldn't change that behavior. They couldn't expand the time that those people could be on the runway.

And so the business ultimately failed because then the next person coming into the jet would have a really crappy experience. There was rubbish everywhere and all the rest of it. So, Look, it's a really, really important thing and, you know, I guess those things are quite practical, like when you have a person who is working in an industry and you might be coming in to adapt or change it, it's very different to when you're thinking about consumer behavioral shifts on a macro level of which there's been loads of stuff we've talked about at length over the last couple of years post.

COVID and then your classic examples of an Airbnb, like, why would I sleep in someone else's room? So, you know, I think they're probably two different questions. Like, am I leading in, leading into and trying to drive a macro behavioral shift? Or am I taking someone who's already in a working environment to slightly tweak the way in which they work?

And, and oftentimes people don't want to do that. 

 Yeah, a hundred percent, a hundred percent. And I think it's one of the hardest things to do as a venture capital investor is to try and uh, work through some of those things that are maybe indirectly affected by a product or a new service or how that's going to be received by important stakeholders.

But it's so important to try and understand those behaviors and have those perceptions of those people who yeah, maybe not, you know, right bang in front of you, but maybe at the peripheries And so so you're at octopus and many people Well, hopefully everyone listening will have heard of octopus in some form because it's a big group and with lots of different elements to the business.

And obviously you've got things like Octopus Energy, which is a sort of household name. So, there's a sort of brand reputation that comes with Octopus. You've worked at a couple of other funds as well, so how have you noticed Or have you noticed that being associated with a brand like octopus? Has helped has it allowed you to see more deals has it?

Allowed you to win more deals. What's that kind of experience like for for a sort of brand vc?  

You definitely benefit from that halo effect. So people do want to speak with us, which is uh, which is fantastic. And we have a particular long, successful history in, in consumer backing companies like Zoopla, like Love Film, Depop, Modern Day, looking at Manual, Skin and Me, et cetera.

So Secret Escapes, you know, a lot of businesses that people have actually touched and interacted with. But I think it's important to note as well, that Octopus is a wider group. You know, the founder has a really, really keen eye on our customers. You know that you can see that in Octopus Energy. If your users, it's all about the customer experience and improving it.

And the same goes for the financial services, part of the business. And  our investor money is all retail capital. And there's something really amazing about that, that we have tens of thousands of UK residents, individuals investing through our  uh, our venture capital trust fund. It's a massive responsibility investing those people's money, but also a fantastic thing that through the medium of our asset class, through the medium of startups and backing entrepreneurs, we can also make the broader society, those people fortunate to invest in us and us fortunate to have them as partners.

We can make them hopefully, wealthier as well.   you know, I think that's a really interesting message, particularly when we're talking to consumer investors, it resonates with them. And perhaps sometimes resonates a little bit more than than some of the typical LPGP structures was it's quite opaque as to where the money is actually coming from.

Yeah, absolutely. And is there any way that you kind of activate that large LP base? Is there?  Is there anything you can do to kind of like say, we've just bought this new consumer company, make all these people aware of it. Does that kind of happen? 

Yeah, we, we share the portfolio companies with all those individuals and you can frankly see a lot of it because it's a listed entity, so much of this is, is published, but you know, opening the door too wide could lead to a lot of emails.

And you know, we just need to be a little bit careful of that.  

Yeah, I can imagine.  And um, Are you able to share your most recent investment? What is something you've invested in recently? 

 Yeah, so, um, Uh,

one of the businesses we backed Fairly recently in the consumer tech team is a gaming company. So we're relatively new to gaming.

It's a company called Onibi  Um, and the founder Benjamin, he was ex You Head of analytics at Facebook and then head of research at Twitch and Anibia building an MMO. So massively multiplayer online game. It's a bit like Minecraft in that sense. So it's an environment in which people can explore and do a huge variety of different things.

But what they've done, which is. Really innovative, you won't be able to find it, by the way, it hasn't gone live yet, is they're introducing physics, so if you go to Minecraft it's pretty static, you put a block there and it doesn't really move,  but with Anibi it will, so you can create blocks, you can turn it into a ship, you can, Turn that into a hot air balloon, and then you can get it to sail you over to an entirely new world.

And these worlds are created via  UGC with content creators coming in to create their own worlds. And they're able to import other worlds from similar games into theirs. So you have this absolutely enormous world through which people can experience that environment, but also a world in which people can do different things through putting physics in an MMO and, One of the things that's really exciting here is within gaming, you have a lot of casual players looking to move up into that kind of mid core segment and not quite necessarily having the financial firepower to buy a triple A game like, like a GTA.

So they're looking at something in that mid core section, but that's been really overlooked for a long time, until last year where you started seeing some of those indie titles gain really big traction. And the exciting thing about this is that, if you think about those people graduating from casual into mid core, a big chunk of them are Gen Z.

And now Gen Z, if we look at various different projections, Gen Z will make up about 30 percent of the global workforce Within one to two years, they have purchasing power. So anything building consumer product, consumer tech, consumer services for Gen Z, we get really excited by that. So, an EB is a business that we have backed. 

Um, look, as I said, team is top notch, but it's going to be a little while before you can play. I'm afraid. 

 No, it's cool. And obviously you, you've just demonstrated that you've like really thought about this as an investment and gone through a lot of probably learning about the space. Leveling up from meeting them and learning more,  what is that experience?

Like, and how, you know, as investors, we are sort of generalists that have to become very specialized over certain periods when making an investment. So how do you find that process?  Do you enjoy it? And how do you think you  go through that and make sure that you are kind of getting really under the hood for a particular sector whilst making an investment decision?

Yeah, yeah, yeah. Gaming has been a wild ride.  we got quite excited by the category  there's a huge amount of supply in the sense there's a lot of entrepreneurs building gaming companies but not a lot of investor dollars going into it comparatively.

Right. This series a has a big gap. So it was an area that we wanted to try and come in and fill. Uh, We really had a full start being honest. So we came in and we just thought we could understand it. We started talking to entrepreneurs within that category and we didn't speak their language. It's a very specific.

Category with a lot of ways that have been learned over decades as to what makes a successful game. There's no guesswork in this industry. It's it's a kind of huge amount of learned experience, insights, ways of working, gameplay, et cetera.  And so, uh, we kind of got stung early on and we realized we need to just to get people that spoke the language in and hopefully we'll benefit from the halo of that and learn via osmosis.

So we did a couple of things. We'll do things like. Get in gaming specific bankers to talk about the macro, talk about the whole ecosystem and educate us. We could start speaking the language. We met with hundreds of entrepreneurs within the category. And then over time we ended up hiring a venture partner. Um, She's absolutely fantastic. She was at a studio called boss of studios, and she came in to really support and drive all of that strategy to the point where we've had. You know, it's really exciting opportunity to invest in, in an EB, but I love it. You know, we, we got to keep learning and shifting. And yeah, as I mentioned, right at the beginning of our conversation, I try and be a little bit contrarian.

So is the time at a time where VC dollars are becoming increasingly concentrated in certain categories and consumer is. massively overlooked. That's where I want to just dive all of my time into there and see if we can play a bit of an arbitrage and support those overlooked entrepreneurs in the categories that aren't AI, that aren't defense tech.

I'm being a bit facetious, but there's a truism to that.  

Yeah, absolutely. And we've had  a couple of consumer investors 12 months. And they said exactly the same, you know, when everyone's  Charging towards b2b and now ai like consumer is a great place to be because You can get these like huge, you know category winning consumer companies and Yeah, maybe there is you know yeah better opportunities when when everyone's looking in another direction so so gaming obviously you guys identified that as a bit of a theme really leveled up added a ton of resources and energy and thought around it.

What's another theme like that, that you guys are really like laser focused on right now?  

Yeah. Well, there's a couple of categories or themes That, uh, we're finding quite interesting, interesting. So, I guess some of the more unsexy categories like automotive,  there's some regulation driving some interesting tailwinds within that space.

If you look at utilities as well now clearly consumer AI is a big buzzword, but if you think about, you know, AI more holistically, a lot of those venture dollars and a lot of the benefits of it are going towards enterprise, but the consumer day. Will come and we've seen Apple intelligence come in, which is, in my opinion, a little bit underwhelming, but you are beginning to see what type of experiences consumer AI could create  for users.

And that's really, really compelling. So spending a bunch of time there. The other two I'll just mention briefly is  uh, one is niche communities. So  there's definitely still a market for the digital town halls. You know, look at the Reddit share price since IPO. It's um, it's a fantastic consumer success story. But actually there's some niche communities, which are really compelling. You look at Strava, 150 million plus users now for that community. You then have actually bigger communities for people that read books. So we're leaning into niche communities and what that could mean. And then the other area that I'm personally spending a lot of time on is, is loneliness as a macro challenge, a big epidemic coming down the tracks and  It's a different thing for different generations.

And if you look at lots of studies, I'm going to kind of go back to Gen Z again. Gen Z feel more at home online than they do in the physical world. That's an extraordinary thing. We've never faced this before. So how do we learn from that? And there's a big question in my mind as to. Do we lean into that?

Do we build these kind of digital communities like what Onibi is doing? Uh, But also do we start looking at whether there's a massive retrenchment in the years ahead and actually JNC start to really think about how they can interact in a physical environment and build that confidence. We're seeing a couple of players come out and gain some traction, which is exciting, but nobody's really, really won this yet.

And if you also look at. The decline of online dating uh, which is happening at real pace. And those people are moving into niche communities. They will be moving into  consumer AI for companionship, but also some of them might be moving into how do I actually start having. Some of those physical interactions.

So we are uh, we're excited by what may come there.  

Yeah, I think that's really interesting. We were actually talking about loneliness as a theme at our fund very recently, and once someone made a very good point, which is. having an app for loneliness might not work because people don't want to necessarily identify as lonely even if they know they are, so it's like  Come over here.

We're all lonely um, probably is a tough marketing message. And so someone made a point of that  as some of these things are often masquerading as something else, but they're solving that need. So I think, you know, an example might be like run clubs are basically dating you know, they're, they're sort of masquerading dating, but as a run club.

and, and I think there's gonna be lots of different examples around that. Whether it's dating or loneliness or mental health, whatever, you know, solving some of these problems with almost like a. Alterior type product that then solves the problem. So it's going to be really interesting.

And I think that's, what's quite fascinating for us as investors try and spot those, those things that  are going to be new and interesting to people. 

It is an interesting thought, that one around your comment around apps. And there's a sort of quite sad irony in that the demographic, which identifies as being the most lonely of all, Is young people, young people who are at school who just so happen to be the most physically connected people out of any demographic because they're all at school together.

They're probably still living at home. There's people around them the whole time, yet that physical interaction doesn't necessarily drive  happiness in another sense. And,  you know, that's really interesting that the long term effects of being unhappy are so deadly. And there's an amazing study that Harvard have done, which is the longest ever it was a longitudinal study on what drives happiness and perceived wisdom.

Sorry, what drives health in later years and perceived wisdom today is a lot around food and exercise, but their findings that it's actually about social cohesion and social connection. The people who are happiest in their thirties, forties, and fifties, that was the best predictor of them being alive. 

And there's great examples of this around the world, in parts of Japan, in what's called the blue zones all around the world. You know, you can learn about these ways that people are having social connection, social cohesion, having dinner together with your neighbors, having dinner with your family.

Like it really, really helps to improve. The length of your life. And I'm becoming super interested in  ways that we can solve for that. And actually, I'll just carry on for one more second, because  consumer AI could play an important role here.  Wherever you think about a lot of people can't actually have physical interaction for, for various reasons.

Physical challenge being one of them, but also mental challenge being another. Maybe they lack that ability to be stimulated, to have confidence, to drive conversations. Now, all of a sudden, if you can actually support yourself with software to be better or, or perceive yourself to be better in a physical environment, then that's a fantastic thing, I think.

So, there'll be a lot of stuff coming out around that. And there are things that we're seeing uh, already. 

 Yeah, I think that's great. Really, really interesting and shows. The  diversity of what we have to sort of consider and, and look at within the venture space. So obviously,  you know, you've been in venture a few years now, and I'm really always interested to understand people's view on  what they think venture is getting wrong.

So like,  we're quite good at patting ourselves on the back in the venture industry, but you know, there's always issues within any sector. And yeah, I'd be really interested to understand. What do you think  the industry or most funds or most people within the space are maybe not getting right at the moment?

I'm 

gonna I'm gonna answer that in the framing of various founder groups that I've been speaking to recently, if that's all right, because um, there you go, classic.  Think about our customer first. Uh, so  what I've been hearing for the market in early stage is a growing frustration and disillusionment with Our asset class as a whole.

 And, um, I haven't heard this in previous years. So this is sort of the last six to nine months. And there's a few drivers of that is that entrepreneurs find venture capital in the process of raising it to be process driven, to be political, to be slow. They generally perceive the investor base to. 

Slightly move at once. You have capital concentration into specific areas where there's excitement, where maybe there's FOMO, and that leaves a huge amount of entrepreneurs being overlooked. And I think importantly,  they're really calling into question. What VC value add actually is like, what is our product?

What is our service provision as VC investors? And if I kind of go back to what I was saying earlier around those interviews, I have with lots of our CEOs from more mature companies.  One of them said,  how many VCs. Could actually hold a 60 minute conversation with him on an operational topic.  You thought it'd be pretty low. 

Hopefully we can hold a 60 minute conversation on financial topics, but that point of how many X operators are actually within this ecosystem can drive value add is a really interesting one. Now flip that on its head. And you've now had several years of growing maturity and professionalism from angel investors.

And from syndicates who are having a really interesting, clear service provision back to the early stage ecosystem. They've been there and they've done it. These are people who have built companies, sold them. They're reinvesting their time and capital back into the ecosystem. So VCs have. I think a bit of a challenge and we need to do a little bit of reflecting and turning the mirror on ourselves and think through is our service provision fit for standard today?

How do we compete on a global level? What can we do to improve? And these are founders that have been going through a really tough time for a couple of years now. And some of them have feel like they've been ill advised post big funding rounds, and they've gone on to make lots of hires and drive a growth agenda.

And. There's these kind of two interesting things, again, from recent interviews with, with founders around this is  one of them is this perceived external expectation from their VCs.  So this is post a funding round. They perceive the external expectation from these investors to be an agenda of growth. But actually that's not always the case.

And at the same time, you have this compounding effect. Right. Which is a false information asymmetry in that the founders sometimes think the investors know more and the investors Think that the ceo knows better  and therefore there's a lot of inefficiency a lot of conversations that maybe should be had that aren't  perceived agenda gets pushed and driven on and on reflection, you know, we can see the amount of companies that have had to make layoffs, et cetera.

You know, it's been, it's been a real challenge. There's been this growing frustration that I sensed towards the asset class. Now there's, You know, huge pockets of excitement and things that we should be really proud of. You know, look how far the industry's come, look how much capital is being deployed.

The maturity of firms now. Think about, you know, in Europe, how many success stories we've had if I think about, consumer tech, that list is really, really, really exciting. You've got Zalando, Get Your Guide, Revolut, Flow, Depop, all of these great global exports of consumer tech companies and from different countries in Europe.

You've got Lithuania, Estonia, France, blah, blah, car, you've got the UK, you've got Germany just in that list alone. So capital is actually flowing into  geographies within the continent, which is something we should be, you know, proud of as well. But you know, there is clearly work to do and we have to listen to  uh, the entrepreneurs within our ecosystem. 

Absolutely. And does that come from funds hiring more ex entrepreneurs and operators or  Is it  kind of natural that as funds maybe get bigger that they hire more sort of investment bankers because they're doing more late stage growth stuff, but then that bleeds into Thinking at early stage like what what is the what is the potential solution to to some of these problems? 

And will and will it happen naturally as well as as the companies that you've just listed? As more of companies like that exit will we naturally see More people from those companies become investors and then their knowledge will seep through the industry  Is it is it a natural evolution that the that europe is  going through the maturity curve?

To get to the point where more operators become more, you know become investors  

Yeah, I think we're going through that cycle. You know, most entrepreneurs that I've spoken to that have had an exit to their name, they're, they're wanting to reinvest in some form, be it time or capital back into the early stage ecosystem.

So,  you know, as that compounds over time, that's going to be a great thing. And look, I don't want to pick on anyone for their background because so many people come into this industry from different walks of life. Now I'm a, I'm a heavily dyslexic ex oil painter. So, hopefully no one pick on me for that.

And the same way, I don't want to pick on. I think people that kind of really understand what it's like to be in the trenches, whether that's a part of their career at some point, being there on the front line to, to, to feel those emotions, those ups and downs, the stresses that come with meeting payroll, the stresses that come with growth, investor relations, your customer changing and all those things.

And I think we do need to encourage people to have some of that empathy. But, you know, really importantly in terms of Europe, I think we need a bigger sense of self belief  and a bigger sense of confidence. Confidence breeds momentum and If you get a bunch of people from the West Coast of the U. S., when they come to the U.

K.,  specific examples I've had or experience I've had, they come to London, you feel this energy. There's this evangelism. This unbridled self belief as to what they can build.  And in the UK, and this is clearly very much generalizing, you know, we have that slightly self deprecating perhaps a lower level of belief as to where these companies can go.

And I think we just need to  try and find ways of, of improving that somehow. And I've had a few conversations around this recently, and there's a couple of.  interesting theories around this, you know, one of them is clearly the company that you keep. Like if you live in San Francisco, you go to the coffee shop, everyone is talking about when they can build a skyscraper on the moon.

And it breeds that sort of confidence, that self motivation, that self belief, 

whereas it's normal, you're not getting ridiculed for talking like that. I think it's almost not even just People believing it's all of our responsibility when someone is talking like that that we don't shoot them down or make a funny face or whatever, you know, it's all of our responsibility because that's there are people who have that self belief and confidence. 

Maybe in the environment they're sort of seen as  weird or over the top or too confident or arrogant or something that where we kind of,  well, I'm not saying we do, but you know, the ecosystem can be guilty of  pulling down their coattails on, on stuff like that. 

Whereas in San 

Francisco, everyone's doing it.

So you're not,  

it's not 

normal. Yeah. 

Yeah. I mean, uh, someone, uh, who was from the American  Ecosystem said to me, you guys need a whole rebrand, which I think is a little bit strong. I think it's actually a case of we need to tweak our culture a little bit. And. Like thinking about culture uh, some conversations I've had recently with people from the Valley that have moved to London for whatever reason, and they're here, there's a couple of observations, which are a little bit different.

And one of them was,  it's actually about your built environment. So if you come to London, the architecture is all about history. It's backward looking, it's legacy, it's protectionism, it's conservatism. It's, we were an empire and we lost it. It's how do we just sort of stay within ourselves? Whereas the U S is about almost how do we build an empire? 

And those West Coast cities are really new. They're less than 100 years old. Everything is new. And so that's kind of built environment. And the other point is, is actually your natural environment over there is,  there's some studies saying that this could be quite compelling. An argument is that they actually have a horizon.

So people wake up every day and they're looking over the horizon. There's this belief, like, how do I get over that horizon? And there's sort of something within that, that that triggers an inner self belief. I appreciate I'm beginning to sound a little bit like a bit earthy and maybe hippie. But there's something quite exciting about that.

So it's like, how do we find  Entire unbridled belief that little bit of kind of Americanism within us. How do we find that horizon that we want to get over? I think you have a massive decade ahead, a really, really exciting one. And all those European consumer tech companies that I mentioned earlier that have become global successes are on their way to becoming global successes.

Those people are going to be the next entrepreneurs. So let's lean into them. Let's be that positive voice around the table. As you mentioned, it's our collective duty to try and tweak that culture as a whole.  

Yeah. And I think we'll always, you'll always have people outside of the industry who sort of take shots at venture because.

Mistakes are made at times money goes into sectors where it might not be warranted There is quite sort of big herd mentality FOMO sectors become hot for a couple of years and then die away but at least within the industry when people are talking in very ambitious terms, we should be Trying to support that as much as possible because that's actually what we're here for Venture is not designed to be a funding club for all businesses Which it sort of sometimes feels that  tech crunch and maybe even podcasts like this make sort of normalized venture capital to the point Where every company should be raising it, but actually it's a very unique funding mechanism for Dare moonshotty type things and the whole economics are built around that a standard portfolio Will have you know  99.

9 percent of their returns from less than 10 percent of the portfolio and it will be those ones that go all the way And so we have to back things like that. There's no point. There's literally no point having three x like it doesn't it doesn't do anything for anyone really when you take into account all of the Management of the money over that period to get that return and everything.

It needs to be huge So yeah, certainly within the industry. I I completely You agree that we need to sort of, you know, support people that are showing that level of ambition. Definitely. Awesome. I mean, we could definitely talk about that for hours. I'm just conscious of time, Matt. So, we have two preset questions that I'd love to,  So the first is a future unicorn prediction.

So if there's a company that you are aware of, or maybe is even in your portfolio that you think is sort of at the earlier stages now, but you think is going to go all the way um, who would that be?  

Yeah. I mean, I was going to talk about Onibi here, but we've spoken about them a little bit. So I'll go to another one, which is  not on our portfolio, but a business called Tilt.

And they are a, it's a social commerce platform in the apparel space. Are you invested? You're looking enthusiastic. 

Yes.  Uh, yes. Uh, only, um, I, I was part of the deal, uh, at Portfolio Ventures. So we are, um, not a lead investor, but we are investors in Tilt and we're very happy to be so, because we, we got in.

At the seed round and they've recently done a big series a so yeah, very very happy with our investment in tilt But yeah, go on explain why you think they're gonna be big. 

Yeah, I mean, well their growth rate is extraordinary but if you look at  I guess, social synchronous shopping. It's historically hasn't really been cracked in the West and they've shown that they can crack it in the UK and X revenue team  as they have that real intensity in the way that they think about building products but also have a, have a real humility to them.

I think at least, but one thing that really jumped out when we met them was  a big part of the challenge in this industry is getting enough high quality supply on the platform.  And so the way that they've built their software enables for someone to come on live shopping I hold up a t shirt and i'm talking about it's a red nike t shirt size medium for women etc And all of that through video recognition and audio transcription is the metadata is already uploaded so somebody in future can search Dynamic pricing etc.

So the barrier to Building their supply base is massively reduced through novel technologies. So I think they have huge future and the speed at which they're growing. You know, if that, if that doesn't slow down, you know, there'll be well on their way to unicorn status in, in a couple of years, a  

hundred percent.

Yeah. The, the team, yeah, the team are amazing. Yeah, I think so as well. We invested pretty early, so there was barely any revenue traction, but the way they explained, you know, what they had been building,  you know, working on up to that point was seriously impressive because it was that kind of like seller view that wasn't just the kind of TikTok live, which is like, you know, The seller and the buyer have the same experience through the mobile phone.

Whereas obviously tilt have gone for the seller. They need their own product. And that's going to be like a web portal with all this additional functionality. That's going to make selling live shopping so much easier. But yeah, the team are incredible. The rate of growth is amazing.  

Yeah, 

and it's all that hang out.

They've got this I remember we were talking about like what's the coolest thing that you guys are building And you'd expect them to be like, oh um, I don't know something that makes more money and they were like, no No, no that we've got this Um, we're launching this orb  that randomly pops up onto the screen and the person who taps it the most Gets a discount and I was like, okay, why why are you building that and they were like just because it's cool and it's fun You And then I went on, this was actually not that long ago,  about three months ago, I was playing around on tilt and the orb came up and I was, I was  next to my wife, Harriet, and I was like, Oh, let's tap it as much as possible.

And I, I could not have physically tried to tap the orb more 

probably thought you were having a seizure as well 

and I came 12th  11 people had somehow managed to tap this orb more than me and um And and it was amazing because it was just like this engagement  I didn't know I needed when it was came to large shopping but makes the product just so much more fun and interesting and exciting  So, yeah, they're, they're just, they just, they just haven't gone down the classic route of trying to  do depop, but in live they've, they've reinvented the whole category.

And I think that's,  

I really, I love that example because it's,  it's going back to first principles of just making, wow, consumer experiences and making them enjoy it in a different way. And actually there's a Rory Sutherland example. I don't know if he said this on the podcast with you, but working with a restaurant. 

Chain where they were trying to get more revenue pre 6 p. m Because everybody gets their revenue in that industry post 6 p. m And they did the dice the roll of the dice,  you know that you know this story 

I do but he didn't talk about it on our podcast. So please feel free to i'll finish it 

Yeah, so they would give everyone that came in a A die a single dice and they would roll it and if you got a six you got your meal for free  And if you've got any other number you paid and as rolling a six is uh, is similar to basically a 16 percent discount.

That's the maths on it,  but it's a way more fun experience. Like you clearly don't always win. You've had a chance and some people win and their experience is so overwhelmingly amazing that they go and tell people about it. So I just love that. There's a consumer tech company out there going back to some just fundamental physical world.

Examples as to how you can create wow moments for your user base.  

And octopus energy have the submit a meter reading spinny wheel. Have you seen that? 

Yeah, I never won that. 

I never win, but I always do it. Cause I'm like, well, you know, he could, could  get some,  might as well. And it's just like,  exactly. Yeah, I think it's really important that people don't just try and.

Replicate. That they really go back to, you know, what is fun, what is exciting, what's going to reinvent this category. So those are all really cool examples. I love all of that. So, final question, just a fun way to wrap up the episode. If you could have dinner with any three people, who would they be? 

I only have one slam dunk. And the rest are gonna be musical chairs, so I'll do them briefly. But the slam dunk  is a lady called Es Devlin, who is a set designer. If you've gone to see um, the Lehman Trilogy in the theatre, the glass box which is rotating, that's one of her  sets. But she became famous working with big music artists.

Jay Z, Beyonce, Kanye. If you've ever seen the Jay Z and Kanye music video when they come up on plinths,  that was her. And the way she talks about it is so fascinating when she goes, 20, 30, 40 years ago, your experience when you go and watch a band, everyone has the same experience. It's looking at a two dimensional view of a band.

You have a Drama, a singer and a guitarist. And it's sort of, it's, it's flat. And all of a sudden you transport yourself into the modern day era. Everyone has a smartphone and people want a slightly different individual experience that they upload and share. And everyone has their camera. So that's when you start seeing artists being put in the middle of the stadium.

You have these totally different 3d experiences and ways of interacting with people.  And the way she talks about it is so interesting. If you, your listeners have time, there's a documentary on Netflix called Abstracts. And one of the episodes is about her. It's brilliant. So she's number one.  

We've never had that by the way.

So.  It's so 

amazing. I actually I'm probably oversharing here, but I got given her phone number once by an artist and I whatsapped her saying, basically, I just, I love your work. And if she'd ever replied to me, I  hopefully would have been working with her. She never did. And I've reflected on that. It's pretty weird.

She would have got an answer in whatsapp from this number professing their love for her work. And If she ever listens to this, I'm sorry. And, uh,  you never know. It 

might have made her day, but she just couldn't bring herself to respond because she didn't know who you are. 

She's busy  talking to Beyonce.

Um,  She she's number one. She's, she's absolutely dead. So  the rest, um, I think you need a bit of music there. So David Bowie, cause also he'd be a conversationalist and also the way that he predicted a lot of our, our industry a long time ago gets a seat at the table, maybe a bit of musical chairs with DJ Tiesto, who's an acquired taste, but very formative for me in my.

teenage years in terms of my education around, around music. Probably again, just a longer story for another day. And then I was going to have Rory Sutherland until you ruined it and told me he'd been in your podcast. I'm not going to have that because it makes me sound like I'm, I'm not very creative, but I think he's absolutely amazing.

And he's obviously blown up to be this big. Online superstar now, but i'll park that one and i'm gonna switch them out in case things get a little bit too serious For ricky gervais just to have a comedian around the table. I think you also he has some quite polarizing opinions So it'll be interesting debate, but you know, hopefully they'll laugh as well  

yeah, I think ricky gervais is such a good answer because He is obviously a comic and incredibly intelligent and witty, but he can also  debate and like go down, you could go on a r you could go really deep with Ricky as well as really silly.

So yeah. Yeah. So I think he's a, he's quite a good glue for almost any of them as well. You know, he's sort of like, anyone would sort of, you know, Be interested in his opinion and he'd say something interesting and but then  Oh, definitely  Definitely. I think that's one of the best ones we've had and I love that you've broken the rules and actually selected five guests 

Yeah, five.

Hey, it'd be musical chairs. I'll probably get a chef in there as well. But yeah, we'll save that 

If you were to pick a chef, who would it be? 

A bloke called,  he's called Seamus Sam, he's the head chef. This is going to make me sound really fancy. I got given a voucher to an extremely expensive, nice restaurant by my brother as a wedding present and we went. It's called Evelyn's Table, it's in Soho in London. It's the best food I've ever had in my life.

He's the head chef there.  Uh, It's a sort of tasting menu stuff. And if, if you ever have money that you can spend on that kind of experience, it is, it completely blew me away. So he's, he's coming.  

Awesome. I absolutely love that. Cool. Well, look, Matt, thank you so much for doing this. Uh, we arranged this fairly last minute and for our listeners.

Hector is at slush. So he's not here, but i'm so appreciative of you jumping on and Spending some time with me and talking through some of these topics And it's definitely a very entertaining and interesting  Episode for our listeners. So thanks again for coming on. Thanks for having me james  

    That's it for this week Thanks very much for listening To stay up to date with the latest episodes, please follow or subscribe on your favorite podcast platform We also have a newsletter called reading unicorns which is another great way to get every episode direct to your inbox Please tell your friends about it and engage with us on social media