CEO & Co-founder
In this episode, OLIO Co-founder & CEO Tessa Cook tells the story of scaling her product to 250,000 users, raising investment from Accel Ventures & the misconceptions about social startups.
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[0:21] Maiko: In today's episode, I'm joined by Tessa Cook, founder and CEO of Olio, an app that allows you to share food with your neighbors, with the mission to eliminate food waste. She has raised investments from top VCs, such as SL, for example, and is now scaling her company across the UK. Welcome, Tessa, thanks very much for joining us.
[00:39] Tessa: Thank you for having me.
[00:41] Maiko: You were brought, way before you started your company as the first Managing Director of Wonga after the big PR disaster around that company. So, after the founders had left the company, with a big mess, and the scandal, and basically a time where many are argued that the company had lost its focused on its customers, and maybe wasn't really in it anymore for the social good, or the impact that it might have initially aimed for. So, you were brought in to turn it around, and you managed to turn that around. What lessons did you learn in that time, in terms of the role of companies and having a social impact and a positive impact on society?
[1:26] Tessa: You're absolutely right, that was a company that started off with a great mission, and vision, but along the way, went very much off pace. And there are a number of factors that I think contributed towards that, the key ones were really not keeping a close enough eye on who their real customers were, and really understanding those customers. So, one of the very first things that I did when I joined the organization was go and sit in the call center and listen to the customers who were speaking to us and that gave some really good insight about who they really were. I think the second reason for the organization ending up where it was, was due to the pace of the growth. And I think a lot of that was due to having attracted large amounts of capital, having very aggressive top line numbers to hit and that therefore means that the organization becomes very focused on those top line metrics.
[2:25] Maiko: So, what would you advise from that time? What would you advise to founders that maybe don't even run a social impact startup, but are just a conventional company and growing that company? What would you advise in terms of still keeping an eye on doing good?
[2:37] Tessa: I think it's about ensuring that you have doing good metrics on your dashboard from day one and you measure those and scrutinize those just as much as your top line metrics. That probably is one of the key things to sort of keep you focused.
[2:56] Maiko: Obviously, if you look at your career, you've worked for Wonga as a managing director, you work for Dyson, for BCG, as a consultant, so, fairly traditional industries and sectors, what inspired you to start a start up in social impact sector and how did you come up with going into that sector?
[3:15] Tessa: So, I'm a farmer's daughter originally. So, the world of business was always one that was very far away from me. I studied Social and Political Sciences at Cambridge and there, it became very clear to me that I wanted to do something positive in the world, but I had no idea what or where, or how. And so, I did what a lot of people do, they sort of graduated and went into consulting. I then spent the next 10 or 15 years in industry, again, very much enjoying what I was doing but I didn't at the end of the day feel truly personally fulfilled by it. I loved my career, but I didn't feel like I had contributed something that I was proud of. And so, I've had a growing desire, over probably the kind of 5 to 8 years prior to setting up Olio to do something that I was proud of and I was excited by and I was yet inspired by, instead of always being inspired by other people's stories.
[04:11] Tessa: And the light bulb moment for Olio came two and a half years ago, now when I was moving to a new country, I had some good food that we hadn't managed to eat, and the removal men said I had to throw it all away. And being a farmer's daughter and someone who just hate the idea of throwing away food, this wasn't something was going to happen. So, I set out to the streets to try and find someone to give that food to and I failed. And it was through that process that I thought, this is crazy, this is beautiful, delicious food, why isn't there an app where I can share it with someone who would like to have this and that was really the genesis of Olio. And then when I researched the problem of food waste, and realized, I mean I was absolutely horrified to discover what an enormous problem it is. And the more we learn so, a third of all the food we waste, that we produce globally goes to waste, the third largest source of greenhouse gas emissions, 800 million people in the world go hungry, the more I learned about this problem, the more I just got immersed in it and felt like I really wanted to help solve it.
[5:08] Maiko: What would you suggest looking back at the time when you're still, I think had your job, right? So, you were still working? You were coming up with this idea and wanted to go more into social impact space? What would you advise for entrepreneurs that are just starting out, might still have a full-time job at a very conventional career where they might not see a future and want to have a social impact, what would you love to have known back then when you started out, when starting a social impact company?
[5:35] Tessa: I honestly couldn't have dreamed just how transformational it has been on a personal level to wake up every single day, knowing that you're doing something you're proud of, and that makes a difference and it's impacting other people's lives. It's just absolutely transformational. So, I would really, really encourage people, I unfortunately hear too many people who say I'm going to work until I'm 50, 55, I want to make a lot of money and then I'm going to do something positive for the world. And I just want to scream at them and say no, do it yesterday. So, probably my biggest regret is that I didn't do it earlier.
[6:12] Maiko: How can people integrate it into their life, doing social or impactful things with what they do every day? Even maybe if they might not be, kind of, predestined to become an entrepreneur, but what do you think? How can this traditional model of okay, earn your money, donate a percent or 5%, or whatever it might be, into transforming to work every day on creating good impact?
[6:37] Tessa: Yeah, I definitely think there is a model, which is halfway in between that, which is using your spare time and also using your spending power to do things that are having a positive impact. So, in particular, we are all consumers, every single pound we spend is a vote. And if you are buying products and services that come from perhaps an ethically dubious background, then you are voting and saying that's okay, I'm fine with that. So, one of the biggest things you can do is just make sure that every time you buy something, you're thinking about the origin, the sustainability of that product. So, that doesn't require much time at all, perhaps a little bit of research. The next step up is around looking at your spare time and we do all hopefully have some spare time. And there's just an incredible array of volunteering opportunities, mentoring opportunities and so there are lots of ways in which you can start to get involved in the impact world.
[7:37] Maiko: Looking at the tech sector, obviously, still, most of it is quite conventional and even being scrutinized for its force for social good. But do you think that technology, like you see, with Olio, can play a bigger role in actually solving the world's biggest problems and can it do that better than maybe sometimes politicians or NGOs might be able to?
[7:59] Tessa: Yeah, I mean, so we are very much motivated by the fact that the status quo today is unsustainable, and very scary. So, we're throwing away a third of all the food we produce. And let's take just the UK as an example, UK households throw a 13 billion pounds worth of food that could have been eaten, that's 700-pound sterling for the average family. Alongside that, we have over 8 million people who are living in food poverty, who don't necessarily know where the next meal is going to come from. It's very clear that conventional businesses and the politics and government are not solving those problems, because they still exist on the scale that they are today. And this is where technology, like Olio, actually, we are really focused on creating a platform that not only sort of connects neighbors with each other, so we can share but also, we're enabling other people who are passionate about stopping food waste and helping tackle hidden hunger.
[08:54] Tessa: And we're inviting them to come on to our platform and to spread the word to use our marketing materials and to get Olio kick started in their local community, so they can solve the problem sort of on the streets immediately around them. And we really do feel like we are creating a sort of a grassroots community movement, which is really trying to solve these terrible problems of food waste and hidden hunger.
[9:18] Maiko: Should policy and should politicians focus more on giving entrepreneur the job of fixing some of our problems?
[9:24] Tessa: I think they can create an environment that is conducive for startups to start to fix some of these problems. But in our experience, what we have learned is that, sadly, government and local government is pretty slow to move. And so, we have had to sort of crack on, I guess, despite that, and I'm sure that in time, we're already working with some local governments across the UK, local authorities, and I'm sure with time we'll start to work with more and more of them. But obviously, we would like to be working with all of them, yesterday,
[10:00] Maiko: Mentioning your round that you raised, I think earlier this year, you closed around with investors like Mustard Seed, SL ventures. So, really like investors and Mustard Seed in the case, they are social impact investor, a seller is not right? So, they invest in very traditional tech startups usually, and also usually invest at a bit later stage than you are. So, how did you go about running social impact startup approaching a fund like them? And how did you go about securing that funding and actually getting investment from a mainstream VC firm.
[10:37] Tessa: So, we, I don't think we necessarily thought of ourselves as a social impact startup at the beginning. That's an identity, I guess, that we've taken on as we've learned more about the space in which we're operating. I approached Sonali from Excel who I'd worked with previously, I did the classic sort of asked for advice and get investment. So, I wasn't planning to raise funding from Excel at that point in time but I was seeking advice to make sure that we didn't do anything at our seed stage that would preclude us from being an attractive investment for them further down the line and just pitched really the enormity of the problem, the huge wide space opportunity to solve it, we had some good, very early data, showing that we had a model that could work. And Sonali was very much backing as a team to unlock that opportunity.
[11:34] Tessa: That was our seed round, we then closed a pre-series A, which was Excel following on and that was where Mustard Seed and Quartier, number of other impact-oriented angel investors came on board. And I think similarly, they were very motivated by the problem that we were trying to solve, and the very unique solution that we had coupled with the team that was making it happen.
[11:56] Maiko: So, what's the focus and the reason for them to invest mainly because you were aiming at social impact, or was it just basically, they looked at your business, and they thought, okay, this could really be a really big business and that's the reason why we want to invest?
[12:07] Tessa: I think different invest, if I'm being honest, different investors of ours sit at different places along the spectrum. So, we have, obviously Excel who are very much a classic Silicon Valley VC and we were absolutely presenting a multiple billion-dollar opportunity to them. And that's very exciting, then we have some other investors who are very much focused on the impact in terms of the co2 emissions that are being saved, the number of, neighbor to neighbor connections that are taking place, etc. For us, Sasha and I, we are motivated by both were motivated by our impact, but also, we believe that having a sustainable robust business model is the most effective way for us to scale and therefore for us to have the impact that we want. So, we don't see them as mutually exclusive, but we recognize that, often it puts us in a slightly strange space, because some people think we should be a charity and some charities think we're far too commercial, and we are this sort of hybrid that sits in the middle. And I think the B Corp. identification, accreditation is probably the closest thing that we found that really resonates with us as leaders of Olio.
[13:24] Maiko: Do you feel like you're sometimes falling in the gap there? Because obviously, a lot of traditional investors might be like, oh, that's a social impact stuff, somebody else can do it and then there's some social impact funds. But again, like the big money is obviously in the mainstream, so like, how do you not fall through these gaps?
[13:40] Tessa: We definitely feel a little bit like an adolescent teenager, so nothing quite fits. We have definitely experienced that the large amounts of capital are still in traditional VC, where the concern, the primary overriding concern is about financial returns and there is very little regard necessarily for your mission. On the opposite end of the spectrum, you have the impact investors who are very mission aligned and impact aligned, but unfortunately, don't have nearly the same level of capital to deploy. And so, who ironically, sometimes end up being more risk averse. Even though theoretically, I think they would like to have the patient capital that's required for impact investing. So, there is definitely a big gap in the middle.
[14:30] Maiko: So, what needs to change that, do we just more impact VCs need to pop up or what needs to change?
[14:36] Tessa: I am hoping, you know, just a personal opinion. But a lot of change tends to happen when some early adopters create awareness and drive some initial change. But true prevent profound or seismic transformational change actually takes place when the large existing incumbent players change and adapt their business models. So, if you were to take an analogy of fashion, for example, there are lots of brilliant fashion startups that are that are Eco conscious and have sustainable business models. But true impact is going to happen when H&M and Topshop and players like that re-engineer their supply chains to make them sort of truly sustainable.
[15:20] Tessa: And so, I suspect that similar might happen in the VC world and we're already starting to see some larger funds committing larger sums of money to impact investing. And as more data comes about to show that actually impact investing is the smart thing to do, because it's what's going to deliver long term returns, then I think, I hope that in 5 years’ time, in 10 years’ time certainly we’ll be looking at a very different environment.
[15:48] Maiko: So, you just mentioned the big companies need to change, they can really make the big impact. Are you at all, Olio, focusing on that as well, partnering with those companies and actually enabling them to have an impact as well?
[15:59] Tessa: Yeah, absolutely. So, one of our sorts of early challenges, ironically, has been that demand for surplus food has been insanely high. So, 40% of all food listings on the app are requested in less than an hour. And so, for us to satisfy that demand, we've now started partnering with supermarket chains, and bakeries and cafes, etc. We provide a service whereby our volunteers will collect unsold food at the end of the day, take it home, add it to the app and redistribute it to the local community. And that's then enabling these large corporates to have zero food waste stores, something that 5 years ago was not on their radar screen, now actually is a top priority from the sea level down, the need to have sustainable business operations and zero food waste.
[16:46] Maiko: Looking at Olio, I think you've run the business about almost 2 years now, is that right? In that journey, what are the most common misconceptions about Olio but also about social impact startups in general, that you're encountering all the time that you disagree with and that needs to change? Are there any misconceptions that you encounter, of, oh, a nice little charity project, cool that you do it but--?
[17:10] Tessa: Yeah, I think that is something that is frustrating, which is that when you're dealing with something that has social good as mission, there is just a default assumption that you must be a charity. And we find that very frustrating, because we don't want, you know, we can think of very few examples of charities that have scaled to have truly global impact very quickly. And also, we don't want to spend the rest of our lives in a constant fundraising mode, we want to have a sustainable repeatable business model. So, yeah, it's very frustrating that people must assume that because we're dealing with food and redistributing food, that must mean that we're a charity.
[17:51] Maiko: So, what's your vision with Olio, what's your big vision that you want to accomplish in the next 20 years?
[17:55] Tessa: Well, we have an unashamedly bold vision, because the planet needs it, quite frankly. And that is that we will have hundreds of millions of people using Olio to share our most precious resource, which is food and drink. And we, today are on a quarter a million users, and we've achieved that in just over a year and a half of being live in the UK. And absolutely, we're well on our way to getting our first million, then 10 million, then hundred million users.
[18:24] Maiko: All right. That's a good challenge. I wish you all the best for that. Thank you very much for joining our podcast and all the best for your company and for you.
[18:34] Tessa: Thank you very much.
[18:35] Maiko: Thank you very much.