Key Lessons from my £40m failure

Listen to the episode here: https://www.honeyiblewupthebusiness.com/e/v8591l98-lessons-from-40m-of-failure-with-jeremy-basset

Transcript:

JB:

My first graduate role was with Unilever, where I started in 2003, but my ‘innovation career’ was launched in 2009, when I was part of a small team tasked with the illustrious goal of ‘creating the future of Unilever’. Unlike many innovation teams, our ambitious vision was supported by resources and support from the company: we had significant financial budgets, we had access to Unilever’s R&D teams, and we reported through to Unilever’s global board. 

To cut a long story short: over a three year period, three other directors and myself, spent £40 million launching 22 ideas, and all of them failed. You could say we successful at spending money, and less successful at launching new ventures. 

DK:

I bet you learnt a lot from that.

Absolutely! As Bill Gates says, success is a lousy teacher, we learn far more from our failures than our success, and this was definitely true for me. 

The reality is that intrapreneurship is really difficult. But the big insight for me was that startups have already invented the future. 

Every time we launched one of these businesses, we’d look at the competitive landscape and what we’d see is that there were startups that were building components of the types of businesses which we were looking to launch, but we were quick to write them off. For each of those ideas that we were developing, startups were already there, they were already exploring the trend or opportunity and had already built a large part of the solution. 

For me, the big realisation was that the future already exists, it just hasn’t been scaled. And therefore, our role as a large corporate was not to invent the future, but to scale it. 

This insight gave rise to the Unilever Foundry, which was much more about saying: how do we work with startups to bring their solution to our scale?

The good news here, is that that model of ‘innovation through collaboration’ worked really, really well. In the initial three years of the Foundry, we launched over 200 partnerships and since then, my successors have over doubled that number to 400+ partnerships, of which about 50% are scaled. It is these types of partnerships that we’re now enabling and scaling through Co:cubed. 

At Co:cubed, we’re focused on helping corporates and startups collaborate. We take time to understand corporate challenges, then we scour our global network of 12 million solutions to find the world’s best solutions. We’ve now worked with over 50 of the Fortune 100 and their equivalents around the world, and we can safely say that this model of collaborative innovation has been proven to work, time and time again.

It’s really interesting. I want to just dial it back, because my jaw is still on the floor. 22 businesses and £40m is a big failure. Unilever Foundry sounds pretty disruptive though?

Disruption was not a word that was widely used at the time. It makes me sound very old, but at the time, Uber was just a premium chauffeur car service  in San Francisco. So it wasn’t even a two sided marketplace at that point. So the context was that this was very early on in that whole era of disruption. We could see that disruption was coming and we wanted to do something about it. And we could see that ‘disruption’ wasn’t enabled through the core business. So Unilever’s CTO, in his wisdom set up this unit creatively called ‘The New Businesses Unit’. And, like I said, our remit was to create the future of the company. I mean, it was quite bold – our goal was to launch five x €100 million revenue business, that’s a big business. You know, in today’s valuations, that’s definitely a unicorn, but it might be pushing a Decacorn in terms of valuation. It’s a bold ambition, and we failed miserably, REALLY miserably.

So you stood there at the start of the decade, you could see disruption was coming, and you’re full of confidence, full of optimism, and well resourced to move forward. At what point did you start to think maybe this isn’t going to pan out?

Indeed, this was a dream brief me. I was 28 years old, I’d had this itch to get back into entrepreneurship, similar to what I’d grown up in. And I’d been wanting to do that at scale at Unilever. I sort of pushed my way into this unit rather than being recruited for it. And, it was a huge privilege. 

There were four of us, four directors. We reported through the CTO. My boss said to me when I first started, “Jeremy, come back to me in three months and tell me what you want to do”. 

We had complete autonomy, as long as it fitted within Unilever’s strategy, which was to ‘help people look good, feel good and get more out of life’ – which gives room for pretty much any idea. 

So where did it all go wrong? 

I think entrepreneurship is defined by resilience, and so we expected failure and we talked about celebrating failure. We were eternally optimistic about it until we weren’t, which I think is quite natural for most entrepreneurs. 

We launched our first few businesses and they didn’t quite work out. But that’s okay and despite the disappointments it was an expected ‘part of the journey’. By the time four people had launched a handful of businesses, we pretty quickly racked up to a grand total of 22 ideas that had been launched and failed.

It got to a point where I started to think that there must be a better way to do it. So I jumped ship. Unfortunately, all my colleagues got a massive payout two months after, so I was absolutely gutted about that. But what it did afford me was a chance to take those learnings and put them to work in Unilever, and hopefully demonstrate to Unilever and perhaps to the industry, that there’s a different way to innovate. And that is innovation through collaboration and working with startups. 

I’m always interested in this kind of dawning, or rather when the dawning realisation kicks in, because, like you say, entrepreneurs are very resilient/ delusional. And there’s this fine line between delusional and brilliant, resilient, and you know, visionary. 

But what was that dawning for you? What were the feelings coming out of that? How did you feel looking back at your sort of the wreckage of these businesses? 

I was 28, passionate about creating these new businesses and still passionate about Unilever. I really enjoyed each of those three years I spent in the unit and I have absolutely no regrets. 

Having said that, it was not easy. 

Three of the other directors all had nervous breakdowns. Perhaps I did, but didn’t realise it. It was not easy work. I don’t think any of us have ever worked harder in our lives with less success. We had nothing to show for it at the end. So it was tough. Failure is failure, whether you’re an entrepreneur or a corporate. 

It’s difficult. There’s financial parts to it, which you have as an entrepreneur, which you don’t necessarily get as an intrapreneur. But I think the financial part is only a component of the emotional roller coaster, you go on and experience everything else. So it was tricky.

Part of me thought it was just a numbers game, that if we’d play it through, maybe it would be the 23rd venture that succeeded. I’d hear a terrible gambler inside me telling me to stay.

But I decided to get out early and I left it with lots of learnings and happy memories of the team. And excited about what was next in my career.

And what do you think those learnings were?

Well, yeah, good question, I think and they then feed into what we do at Co:cubed.

There were lots of rookie errors that we made, that I don’t think any corporate does today, or hopefully doesn’t do today. Like we would splash a million quid on basically coming up with an idea and a very basic prototype before it’s even launched. In retrospect, and it’s very obvious to say this today, you’d spend 10,000 pounds getting a crappy website up to launch where people click, then innovate and iterate from there. So there are some rookie errors that people don’t tend to make anymore. 

There were some organisational issues that we still see corporations making today. So, we were separate from the core, reporting straight through to the board, which meant that we didn’t have any accountability back into the core business, which also meant that we didn’t really have any access to the scale of the core business. And my big learning was that if you want to transform a corporation, you have to transform the core. 

As innovation leader, you have an opportunity, but definitely a responsibility to be bringing that core business with you. And that’s hard work to get them to engage in what you’re doing and to perhaps put their money where their mouth is. Unless you do that, you’ll never get access to that scale that the corporate brings. That was one thing.

The other thing was just the difference between intrapreneurship and entrepreneurship. Entrepreneurs would be quite critical if you’re just an intrapreneur. In retrospect, I think intrapreneurship, I still think, you know, as an entrepreneur, myself, intrapreneurship is a really tough gig. And, particularly if you’re in a large corporation with lots of stakeholders. 

As an entrepreneur you can see an opportunity and then you can build something. And if that doesn’t work, then they can pivot.  For instance at Co:cubed we’ve pivoted several times. If you’re in a corporate, you have to stick within a strategic remit. And so, and then you do have to engage people. 

I think investors can be tough stakeholders, but corporate leaders can also be quite demanding because they need to know everything that’s going on. It’s corporate risk, financial risk, but also perhaps political risks as well, that they need to be worried about. And so it takes time to manage that. 

So there’s a few lessons.

So essentially, you exited this thing, gracefully, a couple of months before it disappeared. And then created the Unilever Foundry. And so did you find yourself taking a lot of those lessons into the Foundry where you were working with the startups and using collaboration and partnership as a strategy?

The Foundry is basically the opposite of the New Businesses Unit in every respect. The Foundry was very much an enabler to the core business. Foundry was a breakeven cost-centre that had to charge the business units who use the services of the Foundry. We only ever took instruction from the core business and built what they said was needed. The New business Unit would spend about 1-2 million pounds per idea. At the early stage of Foundry, we spent £ 50k on a pilot, and then quickly ratcheted it up, but only once that pilot was successful. So the net result of that is that Unilever subsequently put 10s of millions of pounds as revenue into startups for using startup services or solid partnerships in various ways. 

What are the savings of the startup solutions versus the traditional ways of working? 

We Unilever Foundry well and truly paid back all of the loss that was made from the New Businesses Unit.

After a couple of years of running the Foundry, which was at the time very much a symbol of great innovation in and of itself, and is very well respected, you left and set up Co:cubed? What was that like? 

It was quite a shock. I mean, when you leave corporate, I guess you take a lot for granted. When you’re in a corporate, you go along to an event and are hounded by loads of people. Now no one really cares who you are. You’re staring at an inbox and you’re sort of waiting for an email to come in, which is like very unusual, you know, coming from an environment where you’re getting several 100 a day and couldn’t quite get back to all of them. So, yeah, it’s very different. 

I have to say though that I love entrepreneurship. You know, as an entrepreneur It doesn’t mean it’s not always successful, of course. But when it does work, it’s incredibly rewarding. 

The work we do at Co:cubed is a huge amount of fun. We work with loads of clients, in fact, we’ve worked with over 40 of the FTSE 100 over the last five years. This has given me great insight into different industries, working with some amazing clients and people, supported by a really fun team. The financial rewards are also great. 

In a corporation, if you work hard, you might get a small bonus, and perhaps a pay rise. As a startup, if you want to earn a bit more, just work a bit more. There’s a direct correlation in that you get rewarded for the effort you put in. More so I think, than a corporate. 

So that’s good. I also love being a founder because the buck stops with you. You have to deliver in terms of what your client needs. Also, if you are passionate about something, you don’t have to sell it to lots of different stakeholders before you move forward with it. And if people are happy to pay for it, then then that’s great. And if not, then you just iterate away from that. 

Timing is also important. I think the Foundry was launched at just the right time. It was sort of slightly ahead of the curve. And a lot of corporates are coming to us and saying, I love what you’re doing, how do you do it? 

And we were very open, you know, I’d always tell them exactly what we did. In fact, quite a bit was written about that. And, then I went back to them and said, why haven’t you launched your own version of the Foundry, what’s going on? And, and they all said, we don’t really know where to get started, we don’t have the capabilities. And so I said, well, you know, if we could help with that through consulting, would that be interesting? And we got a resounding yes. And was the impetus for starting Co:cubed. 

There’s a lot of heavy-lifting involved with creating the right startup partnerships, work that makes a lot more sense to be done by a third-party. We can do it far, far better, far more efficiently, and far more pain free than as a third party. So that’s exactly what we do. 

We help corporates either launch or optimise their accelerator or corporate venture funds. And then we do the ongoing deal flow and matchmaking of those as well. So we’re passionate about helping corporations work with startups. And we track and monitor over 12 million companies. 

Every day, we’re connecting startups to corporations who have come to us with their challenges. It is a lot of fun.

 

Trusted by 50 of the Fortune 100, Co:cubed works with corporates to understand their sustainability challenges, and then curates solutions and partnerships from a global network of over 12 million startups. Talk to us today about how we can help you deliver on your net-zero ambitions.