1:59

how a big market is going to change decades

2:02

into the future and attract the

2:04

talent and capital to seize

2:06

on that change. And actually, when you get

2:08

really into the weeds a bit, that's really, really hard. But

2:10

at a high level, it's pretty easy. Find brilliant

2:13

people, give them money, make sure they're going

2:15

to change the world in a way which builds a big business in the

2:17

process. And give us some examples of the companies

2:19

that you've backed so fast. Well, we've

2:21

been very fortunate at Balderson. We've been around since 2000, actually.

2:24

We started off as a US fund starting

2:26

up in Europe, of which there's many now who followed.

2:29

And about 10 years ago, a bit more than 10 years ago now, we

2:32

broke out of that relationship because we

2:34

believe Europe and in particular the UK had a huge

2:36

opportunity to build its own funds. And in that

2:39

time period, we've been the early investors

2:41

and sometimes first investors in companies like Revolut,

2:44

an investor in Darktrace, companies

2:46

like Depop, GoCardless, Nutmeg.

2:49

I think we've got over 20 unicorns

2:51

in the Balderson stable, we call

2:54

it. We are an illiterate... We are

2:56

an illiterate stable. Our offices are in an old

2:58

stable. So that's why it's not just some awful

3:01

play on the word unicorn. So we backed some

3:03

very big businesses. We've backed 250 startups over

3:06

the last 20 years. Wow. And

3:09

so how much capital have you deployed then overall? Just give

3:11

people an idea of scale. So around £4 billion.

3:13

And obviously, that's us deploying

3:16

capital. But we hope every time

3:18

we invest, others will invest

3:20

as well. So actually, we like

3:22

to think, the math isn't perfect here, but we like to think

3:25

we've attracted about $20 billion, at least,

3:27

of capital globally into startups

3:29

that we helped invest in at an early stage.

3:32

And what stage of the cycle are you

3:34

investing? Mainly Series A, Series B?

3:37

Yes,

3:38

personally, there's a number of partners at Balderson.

3:41

I do more of our early stage investing and

3:43

so lead at Series A predominantly. And

3:45

so what that means is, the different

3:47

stages of risk when you're building a business. The

3:50

first risk is team. You start

3:52

a business, you're the founder, you're going to hire first.

3:54

We don't take risk on teams, so we always turn

3:56

back the best people. Entrepreneurs first, for example, they

3:58

take risk on people. They're talented. tell an investor, we

4:01

don't do that. The second risk is product. Can

4:03

you build something people actually want? And

4:06

we normally invest once the products

4:09

live and have some data. So it means that you've,

4:11

you know, it doesn't have to be revenues, you don't have to be selling it. But

4:13

we want to see that you've built something people

4:16

are enjoying. And then where we take loads

4:18

of risk is in go to market. So can you sell

4:20

that product? Can you take it global? And

4:23

then market size? Can we have you seen something

4:25

that the others haven't seen yet? So that

4:27

means normally we invest for the products

4:29

got live before the products really exploded.

4:31

And that's normally Series A. But we can

4:34

we do have a growth fund, which invests sort of scale

4:36

upstage as well. So every year

4:38

we say we invest anywhere between $1 million

4:40

in companies and $50 million in companies. But I personally

4:43

focus mostly at Series A. And how is that?

4:45

So how big is the Boulderton team?

4:47

And how does it divide up kind of sketches

4:49

and organograph of it? So we've got about 25

4:51

people on our investment team. Now, we

4:54

have seven partners. And we have

4:56

a managing partner. And

4:58

we have around 70 people in the organization

5:00

as a whole. So as well as sort of people

5:03

who are investors who either

5:05

they're covering a country, for example, or they're

5:08

covering a sector. We also have

5:10

a great marketing team led by the

5:13

former head of marketing for Twitter, Amir, or

5:15

x, I guess, Amir. x, x.

5:19

She's x, x. I don't know how Rachel

5:21

describes her role now. She's phenomenal. She's got a great

5:24

marketing team to help our startups. We

5:26

have a phenomenal legal function who do a lot of our

5:28

in house legal work, you know, so many transactions

5:31

and so many issues that our companies have to

5:33

have to cover. And they provide insight into

5:35

that. We have a finance team,

5:37

strong finance team, which help us once again, also

5:39

help our portfolio companies. We are ahead of a talent.

5:42

And he had previously

5:45

worked at Elastic, which is a big big IPO

5:47

company in San Francisco. So we've got a broad range of services. So

5:50

more than half the firm is focused on supporting the companies.

5:52

And the other half of the firm is focused on investing

5:54

in them. And must have changed a

5:57

lot in terms of those kind of services

5:59

that you provide quite a lot? Completely.

6:02

And it's changed partly because the

6:05

market's changed and it's changed partly because

6:07

the scale of our operation

6:10

has changed in line with just the

6:13

the opportunity set as a whole. So when

6:15

I started in venture there were three juniors

6:18

in the team and now we've got something like 15 or 16 as the

6:20

only. At a height we have that many people

6:22

and we

6:24

were much much smaller as an organization in

6:26

terms of the money we managed and the number of companies

6:28

we'd invested in. But the whole approach

6:31

was different. I think in Europe in particular

6:33

in 2010 which is when I got my first

6:35

experience of venture capital, it

6:38

was a pretty reactive affair. People came to

6:40

you, so here's my big idea, I'd

6:42

like some money and we had these offices in Mayfair and we sat

6:45

there and people turned up. And now it's such

6:47

a competitive, proactive, you

6:49

know it's a hunter mentality now. You've got to go out there,

6:51

find the entrepreneurs, convince them to work with you because which

6:54

is good as a whole, there's more competition for it. And

6:57

you've got to come to events and you've got to be part of discussions

6:59

and policy discussions and build brands.

7:02

So the competition has increased but

7:04

the opportunity sets increased and we've managed to raise

7:06

more money because our returns have been so strong. And

7:09

with more money it means you have more fees to invest

7:11

in things like your marketing team and your legal

7:13

team and your finance team which is what we've done. And

7:17

how did you get into it? Yeah

7:19

it's a good question. So I've been, I just

7:21

described myself as a bit of a tinkerer. I love

7:24

building little things so you know even

7:26

as a kid, I worked as a, I think

7:28

I've had ten

7:30

or something different jobs in my life and possibly

7:33

more. And I love building

7:35

stuff and I started off just building websites

7:37

actually around Manchester. So there was a laser

7:40

company that's been out of the University of Manchester, I built their

7:42

first website and a bunch of real estate

7:44

companies and recruiters and stuff like that. So I

7:46

always love tech but I did

7:50

what everyone basically did that I knew which is very sad

7:52

when I went to university when I became a consultant. So

7:56

I had an amazing experience, I loved it, I did it for two

7:58

years and while there I got to work I

8:00

fortunately got to work on some strategies around scaling

8:02

large technology businesses. But really

8:04

what happened is, so that's sort of my background,

8:07

but really what happened is I met a bunch

8:09

of people who went

8:11

on to become entrepreneurs. We're entrepreneurial to their core.

8:14

Haruki, who's the CEO of GoCardless

8:16

now, who's a phenomenal business, and Matt Robinson

8:18

is one of the most prolific angel investors now in the

8:21

UK, and Tom Blumfield, who founded GoCardless

8:23

and Monzo, is now a Y Combinator. I

8:25

was surrounded by these people who were building this next generation

8:28

of technology companies and I thought, wow, super interesting.

8:30

How do I get exposed? How do I work with these kinds of people?

8:32

They're my friends, but I'm so inspired by them. How do I work

8:35

with them? It just became evident

8:37

to me the best way to work with

8:39

people in that space was

8:41

through venture capital. So I started applying

8:44

for roles. To me as a viewer, I was really lucky that

8:46

just not many people were doing that in

8:49

Europe sort of 13 years ago. What

8:52

are you looking for when you're backing

8:54

an entrepreneur? It

8:57

really varies. It's a hard

8:59

question because not only

9:01

does it vary in terms of the skills we look for

9:05

matching the stage of the company or the

9:07

sector they're in, but also internally. Every

9:11

time we look at an investment, we

9:14

have an investment committee and we debate internally like what we

9:16

like about it. It's not universally

9:20

agreed that this is going to be the future winner, which

9:22

means that we all have different perspectives around the table. So

9:24

I don't want to talk too much for Bolderton as a whole because I'm

9:27

one voice there and one vote. But

9:30

the things that we do look for are spikes

9:33

in particular areas of people's

9:36

talents. You

9:38

don't have to be IQ 200 for sure. We

9:41

have some entrepreneurs who aren't particularly

9:43

academic and some that are, but

9:45

we look for other areas of intellect spikes. I

9:47

like to say curiosity. So

9:49

some of the questions

9:51

I love to ask people is who's

9:54

the most inspiring person in your field or

9:56

what's the best book you've read on what you're building? if

10:00

you were to recommend a newsletter to me. What

10:02

I love is people who are just so curious

10:05

and obsessed with the space they're in, that they've got

10:07

a list of 20 names and 50 blogs

10:09

and they've read them all and they have disagreements with them. So

10:12

like intense intellectual curiosity is one. And

10:14

obviously in some areas if it's machine learning and

10:16

deep learning, maybe you have to have a very high academic background,

10:18

but you don't have to have an academic background to be curious,

10:21

by any means. We have to have ambition.

10:25

Venture capital isn't for everyone. There's a very specific

10:27

financial asset group.

10:30

And for it to work,

10:32

for us to be able to invest in 30 companies and genuinely

10:35

think 29 of them may fail, one of them has to be a huge success,

10:38

astonishing success. And

10:40

that means the fans who be back have to be very, very ambitious.

10:43

And it's hard to tease out, but

10:45

you can find ambitious people and you can ask

10:47

them the right questions and tease out other people. And

10:50

then I've got my final trait before you jump

10:52

in here, it's competition, right? It's sort

10:54

of people who are highly competitive. And

10:57

you see that early on, you can see that in sports,

10:59

you can see that in the local chess club, you

11:01

can see that in the lifestyle

11:03

stuff they do. Competition comes in many

11:05

different forms, but I think that desire to

11:07

win as well as the ambition and the curiosity to

11:09

get you there, I think is a triple threat.

11:12

We're sort of generally looking for some balance

11:14

of. But I'm really curious about the ambition

11:16

bit there. How do you, what are you

11:18

thinking about giving away the secrets, I suppose. But

11:21

what question, how do you, how

11:23

do you assess vision

11:26

questions? Well, there's a thin

11:28

line sometimes between naivety

11:32

and arrogance and

11:35

what people can actually achieve. But you know, I regularly

11:38

meet people who I'm blown away by

11:40

who they compare themselves against. As people

11:42

say, like, you know, I want to beat

11:45

Elon Musk at getting us to Mars. Wow,

11:48

that's bloody ambitious. And obviously

11:50

anyone could just say that, it has to be backed up by, yeah,

11:52

right, that's really interesting. Or if you

11:55

say like, who inspires you? And you say, well,

11:57

you know, Florence Nightingale

11:59

is most impressive. of a nurse and probably

12:01

healthcare practitioner of all time to change

12:03

the way nursing works. You'd be like, well, that's pretty big.

12:05

That's a big, big hairy goal,

12:08

as they say, in consulting. And

12:10

you're not too limited by, you know, where

12:12

do you want to have impact globally? You know, I

12:14

don't want to be the biggest name in my town or the

12:16

biggest name in my country. I want to be the biggest name globally.

12:19

That gives you some indicators of

12:21

ambition, but it's not just sort of looking

12:24

forward. It's also looking back. You know,

12:26

we had, we invested in a founder recently

12:29

and I was asking about his team and he

12:31

just hired a new VP sales for

12:33

the US and he said, no one thought I'd be able to hire them.

12:37

I love that. You were, everyone

12:39

told you, you probably couldn't hire this person

12:41

because they were really senior in their industry. And to be honest with you,

12:43

they were getting a pay cut and they were taking a

12:45

big risk. And he was like, no one thought

12:48

I could hire them. I did. And that level of ambition

12:50

where you can say, you know what? I'm a tiny startup

12:52

with no resources and very little chance

12:54

of succeeding. And I can go out and find

12:57

someone that, you know, name the big tech

12:59

company and convince them I'm the future. That's

13:01

a pretty ambitious approach. This

13:04

is a very broad question, but as you've talked about hiring, I

13:06

think it's really interesting. Like when you

13:08

have decided to back

13:10

a company, what, what

13:13

is then your advice to founders on

13:15

hiring? You know, and I realize that is

13:17

a hugely broad question, really difficult, but just some

13:20

reflections on, okay, you've just been given a wedge

13:23

of cash from Bolton, right? Like what

13:25

a lot of these guys do is go and spend it on people,

13:27

right? Like an, an hiring people. So what's

13:29

your, just sort of like broad contours for

13:31

what you say to those founders? Yeah. And you're

13:33

completely right. You know, I think most of the money

13:36

we provide to founders goes on, on people,

13:39

uh, goes on talent as it were. And these days, also

13:41

a bit to GPU, a bit to marketing still, but

13:43

mostly it's people. Um, and so

13:46

there's a whole raft

13:49

of advice we give to people. We have a phenomenal

13:51

head of talent who, um, provides detailed

13:53

advice on the stuff. And we also have expert

13:55

advisors in different sectors. So, um, we

13:57

have the former CPO booking.com. It helps with product

14:00

hiring. We have the former CTO

14:02

of Critier and on Fido, who helps obviously with technical

14:05

hiring, who's also on the technical advisor board of revenue.

14:07

So there's loads of technical stuff that you

14:09

can do for hiring and increasingly,

14:11

not just in engineering. People used to just do technical

14:13

stuff in engineering, now in marketing and sales roles and

14:15

stuff. So we can go deeper into that if you want.

14:18

But I think fundamentally, you need...

14:21

Anyone who's joining a company at Series A is

14:24

not going to get an easy ride. Maybe

14:27

over the last few years, there's been a perception because

14:29

of the cheap availability of capital that startups

14:32

are actually the place to go if you wanted to get paid more, or

14:34

you wanted a better work-life balance. And

14:38

the real truth is, if you're going out to fundamentally

14:41

upended industry that's been around for hundreds of years with a new

14:43

technology, it's really hard work. It's really,

14:45

really hard work. And it's stressful and it's high

14:48

risk. And it won't pay

14:50

well, because really, every additional

14:53

dollar you make or pound you make should be going into R&D.

14:55

It shouldn't be going into bonuses initially.

14:58

Obviously, once you scale that changes. And so

15:00

when hiring, you need to find people who are as

15:03

hungry as they are experienced, if not more so.

15:05

So it's fine to hire someone who's got 20, 30 years

15:08

experience if you still feel they've

15:10

got the hunger to go and completely change an

15:12

industry. And sometimes they are the most hungry people because they've

15:15

suffered through it. And I'm on the board of a renewable energy

15:17

business. And the founders there

15:19

have worked in the energy sector for 20 years, but they're still

15:21

so hungry to change it all. But also,

15:23

I think it's fine to take risks on

15:26

younger people or less experienced people rather

15:29

in that particular segment, if you feel they are there

15:31

to fight for

15:33

the change you want to see. And this

15:36

is not something I recommend

15:38

to any startup founder, but the company

15:41

I just mentioned in the renewable energy space, there's

15:43

probably 10 or so employees now who've got

15:45

the logo tattooed on

15:47

their arms, which is astonishing

15:49

commitment to a cause.

15:51

I don't know if there's a Jimmy's job tattoo

15:54

group yet, but it's just astonishing

15:57

commitment because that's not recommended. And

18:00

so my observation is what happened

18:03

in farms over the last 100 years and factories

18:06

over the last two or three decades is happening in firms.

18:08

There were firms with a bedrock of

18:11

high income nations employment

18:13

over the last couple of decades. We

18:16

all worked in firms SMEs and big ones and

18:19

the aspiration wasn't freedom from the office, it

18:21

was the corner office. That's what people were ever going

18:23

for. And we were all on these steady

18:25

career tracks. And if anything, that was sort of the bedrock,

18:27

not just of culture, but also the welfare

18:29

state and our education system

18:32

and the financial system to some degree, your mortgage and your pension

18:34

all based around this idea of a corporate career. But

18:36

clearly that's not happening anymore for a large number of people

18:38

and it's growing. And so the book is

18:41

tracking some of that and the technologies that have

18:44

underpinned it. Some of the academic

18:46

reasons, sort of the theory of the firm, why do firms exist

18:48

in the first place and how they've been undermined. But

18:52

most of the book actually is how

18:54

do we respond to this? How do we close

18:56

the digital divide, which may be keeping some people

18:58

out of the opportunity? How do we change our education

19:01

system? How do we change our finance system?

19:03

And how do we change our culture to embrace entrepreneurship?

19:06

Because it's my view, right here on the way,

19:08

let's see, but it's my view that this isn't

19:11

slowing down. So it's almost a manifesto. There's

19:14

a section at the back called the Entrepreneurs' Manifesto, which

19:18

lists out some of these policies. And

19:20

if any politician wants to adopt

19:22

that, it'd be fantastic. But if you look back

19:24

at all of the gracious industrial

19:26

revolution where we are in Manchester today, you

19:29

needed ownism. You needed

19:32

the policies

19:34

that would support people during that industrial revolution

19:36

to come through. If you look at the Second

19:39

World War and the post Second World War, it packed

19:41

the welfare state where we allowed

19:43

big corporates to exist. We allowed the free market,

19:46

but in return they had to contribute and the welfare state was

19:48

part of that through, whether it's NI or business

19:50

taxes. All of these estimates have happened

19:52

time to time between the market and the state.

19:55

And yeah, I think we're approaching another one. So

19:58

that's why I put in a few. policy ideas at the

20:00

end of the zone. So that relationship

20:03

between the firm and the stay then, that was

20:06

really interesting. Just expand on that for us. Well,

20:09

there's so many different interactions between

20:11

big corporates and government.

20:15

I can fill out the examples, but let's take the

20:18

idea of pensions. Right

20:22

now, if you go and work, and we'll focus

20:24

on the UK, the book is global. And actually,

20:26

the UK is probably

20:28

ahead of the pack, let's say, in adapting some of this stuff.

20:31

But let's take the UK. If I go and work for

20:34

even an SME, let alone a big corporate,

20:36

I now contribute to a pension through the DC scheme.

20:40

And that's taken off my salary. If

20:42

I'm self-employed, I'm not forced into a pension. I

20:45

can obviously go and do, I can choose to, but I'm not forced into a pension.

20:48

And so the government has said to itself at some

20:50

point, the way to ensure that we have

20:53

properly funded private and public pensions going

20:55

forward, whether that's through NI, charged

20:58

on top of salaries for the NHS, or

21:01

it's through this enforcement

21:03

of pension schemes for SMEs and corporates,

21:05

the way to do that is to deal with firms. And we'll talk

21:08

to the firms. The firms will say, yes, okay, and

21:10

when they probably want something in return, good

21:12

education system, healthy workforce, infrastructure,

21:15

and this is a fair settlement. And my concern

21:18

is, well, what happens when 20% of

21:20

the workforce are self-employed or working small businesses,

21:23

and therefore aren't necessarily

21:25

in a position where they can save for a well-funded

21:29

pension? And is that something we're going to have to obligate

21:31

people to save into? And if

21:33

we are, what's the quipro quo for that? Who are you going to negotiate

21:36

with? There isn't a head of G,

21:40

there isn't a head of Nissan, there isn't a head of JCB or a big

21:45

company who's going to go and say, here's a fair

21:47

settlement, don't you think, let's work this out?

21:51

And so we're going to have to find new

21:53

bodies and new adaptive ways of building policy

21:55

around entrepreneurs. Why

22:01

a book? Why not something else? That's

22:04

a fantastic question. I

22:07

think I'm a big believer in writing

22:10

something down helps you think it's through. This

22:13

started as a blog post, but

22:15

I started it at the end of COVID. I

22:18

didn't have a social life. The markets were

22:20

booming and I didn't have a son. I

22:23

finished it with a son who's

22:25

taken up all my free time and then

22:27

obviously lots of volatility in the market and a

22:30

social life again.

22:31

A

22:32

blog felt like it was going to evolve into

22:34

a book in a lot easier ways than

22:36

I eventually did. I think one

22:39

reason is there's so much

22:42

that's happening in this space. There's so much interesting stuff happening

22:44

in this space. Every time I spoke to someone about

22:46

it, and there's lots of interviews in the book, so I've

22:48

interviewed lots of startup founders, I've interviewed freelancers,

22:51

I've interviewed people who are

22:53

running multi-billion dollar startups. There's

22:55

loads and loads of interviews. I spoke to

22:58

many more people than were ultimately

23:00

interviewed in the book. Every time I spoke to someone,

23:02

there was a new idea that felt

23:04

deserved to be captured to try and put

23:06

it into one cohesive argument. But as

23:09

you're more than aware, as now the nation's

23:11

career advisor, there's

23:14

many different routes to getting ideas out there and

23:16

being part of the conversation. So look, hopefully it

23:18

is a one piece of the conversation,

23:21

and I hope other people will pick

23:23

up on it and maybe include more

23:25

media and policy stuff comes out of it. Why

23:29

are you here at Conservative Party

23:31

Conference? It's not Team Revenge, after

23:33

this. No, look,

23:35

I think ultimately the government

23:38

right now is working on a lot of policy

23:41

that I think is going to be really, really important to the

23:43

future of technology companies in the UK.

23:46

This is one way to engage the government. And

23:49

the same with going to any party conference, I

23:51

think being part of the discussions

23:53

in an informal and informal way, I think are really

23:55

important. You could be really critical

23:58

and say, Well,

23:59

Well, actually, technologists and venture

24:02

capitalists, finance and tech, very

24:04

influential groups already, why are

24:06

they in the conversation? And

24:11

I've actually found in the technology industry

24:13

in particular, there is a natural

24:15

inclination to be a bit anti-state.

24:18

And I don't mean that as in like big

24:20

C conservative or big C labor or

24:22

not, or libertarian. I mean,

24:24

if you're someone who already thinks you're going to build something

24:27

which completely changes the world, engaging

24:30

with the state is a top priority. And actually,

24:32

I think that's pretty naive because the stuff that I've invested

24:34

in over the last decade has been hitting

24:36

the walls of regulation more

24:38

and more commonly, right? It's not just social media apps,

24:41

although they're heavily regulated now. It's

24:43

self-driving vehicles, it's advances in healthcare,

24:46

which could help diagnose and cure cancer,

24:48

it's renewable energy platforms. These are

24:50

really important advances. And

24:53

in order to bridge that gap between

24:55

the entrepreneurs we invest in who can be a bit anti-establishment,

24:59

let's say, if not anti-state, and

25:02

the government who wants to lean in and discuss policy

25:05

and get it right, I think there has to be

25:07

voices in the room. And this is one of the rooms. Yeah,

25:11

one of my favorite conversations dealing

25:15

with entrepreneurs as I was way before my time in

25:17

number 10 was with

25:19

mutual friend Nick Hungerford, founder

25:21

of Nutmeg. And him just wanting

25:24

to... The budget was the following week

25:26

and he was lobbying for some change

25:28

in the budget the next week. And

25:30

I was like, I was in his chair at the time, I was like,

25:33

this is really not the way it works. This

25:35

is not the way it works, Nick. And it was like the most curd conversation

25:38

because he was like, there's no point. It was carry on talking.

25:40

They're basically hung up on the phone, but we

25:42

became very dear friends afterwards. And

25:45

yeah, no, it is interesting. It's

25:48

a great example of where the world's just completely moved

25:50

very differently, like in terms of government

25:52

being slow and entrepreneurs just

25:55

moving fast, right? But it's a good

25:57

point actually on the regulatory side, like most of...

25:59

So a lot of big companies can come from regulatory

26:02

change, right? Yeah.

26:04

And a lot of startups can be destroyed

26:06

by poor regulatory change. And so I have

26:08

another hat on, which is I'm a member of

26:10

the Industrial Development Advisory Board, so provide

26:13

advice on big industrial applications. And

26:16

we see some big companies apply

26:18

for that and say, look, we want to be

26:21

part of building the industrial future of the UK.

26:23

And we're grateful for some support in doing that. But

26:26

I don't see many scalettes and startups just not aware

26:29

of it. Yeah. And so being

26:31

part of the conversation, I think, can help that.

26:34

And the world doesn't move

26:37

particularly fast in the policy world. You've

26:39

lived it, right? So I'd be interested in your

26:42

view of how it improves. But right now, as

26:44

it happens, we are in a particularly fast period

26:47

of change because of AI. And

26:51

the UK is leading in communication

26:53

on safety. It's got this big event coming up in

26:56

the AI safety event in November.

26:58

And there's a lot of impetus

27:01

around that, the moment of energy around that. And I think it's really

27:03

important we get it right because the real risk actually

27:06

is not, in my view, the Terminator turning up next

27:08

week. Maybe let's let

27:10

you know, maybe we need to watch out for it. But

27:12

it's not going here next week. It's that we

27:15

pass regulation now, which locks everyone else out, locks

27:17

out competition, only supports the big team. And

27:20

if you'd written legislation around

27:22

the internet in 1997, we'd all be using

27:25

Internet Explorer still and

27:27

probably Dial-Up Modems. So I

27:29

think it's really important that we're open-minded and flexible.

27:31

And so one of my roles here

27:34

today and then in a couple of weeks' time is to speak

27:36

up a little bit for the AI little person.

27:39

Yeah, yeah. And you're also on the advisory

27:41

board at Demos as well? Demos, yeah. Yeah,

27:44

yeah. I'm a trustee of the charity. Yeah. Which

27:47

is another way that you play a role in the policy

27:50

space.

27:53

What are some of the exciting companies that we should

27:56

check out that we may not have heard of?

28:01

I'm always at risk of talking my own book. I'm

28:04

very aware of that. But I can

28:06

tell you, what's really excited

28:08

me recently is existing

28:11

businesses which have found ways of

28:13

using AI to massively open up

28:16

their services to new people who couldn't use them before.

28:19

So to try and explain that a little bit more, we

28:21

invested in a company called Photo Room. And Photo Room is

28:23

very popular. It's not the top

28:26

number one app in photography

28:29

on the App Store. It's a mobile-based photography

28:31

app. Very, very popular. Hundreds

28:34

of millions of downloads, tens of millions of users. And

28:36

you could do stuff like, hey, I want to sell

28:38

a nice pair of shoes on Depop or Etsy. Can you take

28:40

this bad photo of mine and make it a nice photo? You

28:43

did that absolutely fine. But

28:45

now they've used Genitive AI to allow

28:47

you to do so much more so you

28:49

can change the color, you can change the style, you can edit

28:51

the background, you can take suggestions from the AI

28:54

of the angle you should position them at and what works

28:56

well on a Google ad versus a Twitter ad or

28:59

X ad. And what's really interesting

29:01

about that is that that level

29:03

of sophistication in photography was only accessible

29:05

to someone who'd spent probably five years using Adobe Photoshop

29:08

and really knew how to use that expensive

29:10

licensed software. But now, thanks to AI,

29:12

tens of millions more people can start

29:15

doing advanced photography. Clio is

29:17

another example. Clio is a great company. He's been

29:19

doing what's going to bolt into investment, helps provide

29:21

financial advice to Gen Z and

29:24

navigate this very weird world

29:26

of work as well as provide some financial solutions

29:28

for them when needed. And

29:30

Barney's actually very transparent

29:33

about this kind of stuff and he's a phenomenal

29:35

CEO. But he's adopted AI to just massively

29:39

expand the advice it can give, his

29:42

platform can give to people so that they are getting higher

29:44

and higher quality financial advice for nothing,

29:46

for free in many cases. And

29:48

once again, that's AI opening up

29:51

a product which already existed, financial advice,

29:53

in a way where millions more people could start accessing

29:56

this productivity tool. So where I'm really excited is

29:58

anywhere that's happening. It's

30:00

happening a lot at the moment. And I could talk to

30:02

about another 20 companies in the Baldur's portfolio as well

30:04

if you'd like me, but not

30:06

a bad idea. What are your

30:08

predictions for the venture capital market

30:11

over the next couple of years, right? Like it's been,

30:14

you probably saw the peak of the market in 2021. What

30:16

are you seeing the next few years? Yeah, I mean, so

30:18

the short-term bad, midterm

30:22

good, long-term great. And I'll explain

30:24

that. So in the short-term bad, year

30:26

on year, venture capital investment's down about 40%.

30:29

If you look at H1 2022 to H1 2023, particularly acute in growth stage. So

30:35

stage where the UK, to be honest with you, has always struggled a little

30:37

bit. But those rounds, those

30:39

hundred million dollar plus rounds, many of which from Tygo

30:42

and SoftBank and COTU, they're happening less. And

30:47

the demand side for software, so

30:51

mid-sized businesses and large businesses buying software

30:53

has also come down. People's willingness to spend on software has

30:55

come down as well, right? For obvious reasons.

30:58

Energy crisis and cost of living crisis and inflation. So

31:01

the demand side is down and the funding side is

31:03

down a lot. That's bad. Good

31:05

news is over the last five years, it's up. We

31:09

in the UK in particular are huge adopters

31:11

of early stage technologies, whether

31:13

that's your mobile,

31:16

your online banking, your e-commerce, and

31:18

the amount of venture capital, even in this

31:20

very depressed market. And I would say we're approaching

31:23

the bottom of the super cycle that often technology

31:26

goes through and financial forensics go

31:28

through. Even now, more capital

31:30

is available than it was five years ago. There's more willingness for

31:32

people to try new things. There's more supportive

31:34

culture around it. So midterm

31:37

actually quite positive. And in the long run, I'm

31:39

super positive. And I say that because if you

31:42

look at the technologies which accelerated

31:45

a lot of the birth and growth of

31:47

great startups in the last decade, so mobile and

31:50

cloud being the two obvious ones.

31:52

We are seeing the events in

31:55

terms of falling costs and increase in power

31:57

of so many more fundamental technologies that make it happen.

32:00

So it seems like a really trite thing

32:02

to say right now, but energy costs are going to come down radically

32:05

over the next five years as new technologies come to market. If

32:07

countries get them right, if they get the regulation right,

32:10

they get technology right, that's a huge opportunity. Cheaper

32:12

energy is an amazing thing for innovation.

32:15

Same with AI and the power of compute. What you

32:17

can do now with pre-trained AI models

32:19

at a lower cost and with higher output is phenomenal.

32:23

If you look at solar PV's, if you look at the cost of robotics, if

32:25

you look at the cost of cameras which are essential to computer

32:27

vision, applications which are essential to robotics

32:30

as well, or

32:33

security, or health, all

32:35

of these things are getting cheaper and becoming more

32:37

widely available. That's what fundamentally

32:40

underpins innovation. When you

32:42

see these multiple ways of

32:44

general purpose technologies becoming available

32:47

to people as long as we get the

32:49

culture around them right, the funding around them

32:51

right, the regulation around them right, I

32:53

think we're in a really exciting period to go out and start

32:55

a new company and I think venture

32:57

capital is one of the best asset classes to support

32:59

that. Who in your industry

33:02

inspires you? It's a phenomenal question. You can see my level

33:04

of ambition. The

33:06

person I'm amazed by is Mike Morris. Mike

33:12

Morris is back just about every single breakthrough

33:14

coming you can imagine. He started his career as

33:16

a journalist and

33:19

he met Steve Jobs, interviewed Steve Jobs and was like, this guy's

33:21

the future. I want

33:23

to find a way to invest in him. With

33:26

that he built Sequoia. Sequoia is arguably

33:30

the best, if not one of the best venture funds in

33:32

the world consistently over many funds over

33:34

many decades. Mike Morris is just one

33:36

person there, right, but he's just phenomenal. When

33:38

he talks about people

33:41

and when he talks about technology, he speaks with

33:44

an amazing clarity. I don't agree with everything

33:46

he says, but he really does give amazing

33:48

clarity. He got to write a book with Sir Alex

33:50

Ferguson, which is a life dream.

33:53

I think someone like Mike Morris who really... farther

34:00

this industry is exceptional.

34:03

But most of the people that I work

34:05

with are founders, not other VCs,

34:07

obviously external to Boulderton. And

34:11

it's really the founders I work with. I think that

34:13

the really privileged

34:16

part of my job is, and so

34:18

it's a hard job, getting it right, it's hard, very few

34:20

funds get to two or three funds, we're on our approaching

34:23

our ninth early stage fund and second

34:25

growth fund. The really

34:28

privileged bit is I get to meet maybe

34:30

a thousand entrepreneurs a year, whether

34:33

it's a phone call or Zoom or in person. And

34:36

I am lucky enough to work on a regular

34:39

basis with the ones we invest in. And

34:42

I won't pick out individuals because it feels a bit unfair.

34:44

But really, it's those people I sit in board meetings

34:46

with every day and say, Oh my God, what you've achieved

34:49

in this month is more than a lot of people

34:51

could ever achieve. But just because the way you

34:53

build this business or the sector you're in, I think

34:56

that's the profile

34:58

of person I enjoy working with. But you've...

35:00

I mean, it's a useful example of the funnel,

35:02

right? You meet a thousand people, what you invest in 20

35:05

a year perhaps? Well, Boulderton does. I'll probably

35:07

lead two or three of those investments. Yeah,

35:10

it's a 0.02. Yeah. I

35:13

mean, raising rent capital is the process of exhausting

35:15

all the no's. And there's

35:18

a lot of no's out there. And it

35:20

should be hard. We are an asset

35:22

class where we say, unlike any bank,

35:25

we're not securing the money we invest in you in any asset. We

35:27

don't want your home. We don't want the IP to the company necessarily.

35:30

You can do with it more or less what you want. We have a veto

35:32

on certain things. But if you suddenly

35:34

say, James, that great idea I had

35:37

last week, actually, it's rubbish. We're launching something new.

35:39

As a board member, 90% of

35:41

the time, you've got a good reason for it and say, go for it. We've

35:43

never said, give us our money back. You

35:48

know, we wait around for a decade, often longer,

35:51

to ask for money back. A lot of people say, well, you know, finance

35:53

is short term, we wait at least a decade, in the

35:55

best investments, we had longer to

35:57

try and get our money back or even hope to get our money back.

36:00

It's really patient and we are

36:02

incredibly accepting of failure. We

36:04

almost expect a lot of our investments to fail

36:07

just statistically. They will, even if we don't think when we

36:09

invest, they will. So it's an asset class. It's

36:11

really unique, very

36:13

suited to high innovation companies, but as a result,

36:16

just, you know, is, is, and should be hard

36:18

to access. Um, because not

36:20

all companies will fit that profile. Definitely.

36:22

When's the book out? November

36:25

23rd startup century, startup century, why

36:28

we're all becoming entrepreneurs and how to make it work. Comes

36:30

out November 23rd and all good bookshops

36:32

in the UK. It's also online pre-order

36:35

now on Amazon elsewhere. You can go

36:37

to startup hyphen century.com and

36:39

you can chat with the book. So

36:42

I have put the book into an AI model.

36:45

Uh, so this book talks back, you can ask it

36:47

questions. Um, and obviously if

36:49

you like the responses to the questions, you

36:52

can buy the book. And if you don't like them, you can blame opening. I.

36:54

For that is very cool. Well,

36:57

I would, people should definitely go and check

36:59

that out. Right? Like it's awesome. Hyphen century.com.

37:02

Yeah. That's brilliant. Uh, James, thanks

37:05

so much for coming on Jimmy's jobs. The feature has been a real

37:07

pleasure to have you on. Great speaking to you.