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Episode
104

Garth Watson

Co-Founder and Chief Legal Officer of Libryo

Ep
104

Impact By Ensuring Legal Compliance: Garth Watson of Libryo

Mar 29, 2022
With
Garth Watson
48:34

Impact By Ensuring Legal Compliance

Libryo co-founder Garth Watson joins us today to share how Libryo helps companies comply with regulations on environment, health, and safety all over the world. Initially beginning his career as a lawyer, Garth pivoted when he and his co-founders, Malcolm and Pete, saw a problem that needed to be solved regarding regulation and compliance.

In this episode, Garth shares how Libryo came to be and his advice to early stage entrepreneurs when it comes to overcoming challenges. It was no easy feat to get Libryo to what it is today, having raised nearly £4 million in funding and operating in more than 80 countries and over 500,000 sub-national jurisdictions, so there is definitely much to be learned from Garth and Libryo. Listen to this episode to find out more.

 

Garth's key lessons and quotes from this episode were:

  • “We've been very deliberate about building a company culture that's full of honor and encouragement and calling out the greatness in people.” (21:57)
  • “There's no such thing as a peacetime CEO and a wartime CEO. In running a startup, there's always a blend of both, so it's just a level adjustment.” (28:24)
  • “You don't want to mute your highs, you want to express the joy as best you can.” (31:46)

In this episode, we also talked about:

  • How Libryo works (6:10)
  • Surviving 2021 and why is the most challenging year for them (18:46)
  • How entrepreneurs make good decisions (25:03)
  • One of Garth’s most useful pieces of advice (31:36)
  • Garth’s vision for Libryo and the world (40:51)

Transcript of the episode

Maiko Schaffrath  00:00

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You are listening to Impact Hustlers, and I am your host, Maiko Schaffrath. I have made it my mission to inspire the next generation of entrepreneurs to solve some of the world's biggest social and environmental problems. And for this reason, I am speaking to some of the best entrepreneurs out there who are solving problems such as food waste, climate change, poverty, and homelessness.

My goal is that Impact Hustlers will inspire you, either by starting an impact business yourself, by joining the team of one, or by taking a small step, whatever that may be, towards being part of the solution to the world's biggest problems. 

In today's episode, I speak to Garth Watson, co-founder of Libryo, a platform helping companies comply with environmental health and safety regulations across the world.

While large corporates have extensive policies on compliance with environmental health and safety regulation, the actual implementation still really remains a challenge for many of them, and this leads to companies breaking the law, intentionally or unintentionally putting the employees of their suppliers at risk, and obviously leading to environmental damage, and ultimately exposing companies to reputational and financial risk.

Libryo is solving this problem, and I'm really excited to have Garth on the show to talk more about that. Thanks for joining me.

Garth Watson  02:43

Absolutely. Great to be here. Thanks, Maiko.

Maiko Schaffrath  02:46

Amazing. So, first of all, let's start with your personal story. You trained as a lawyer. You started your career in South Africa. Your personal story started there. So, tell us more about your background, your life story, and how you turned from lawyer to entrepreneur.

Garth Watson  03:05

Good question. Okay. So, firstly, let's start the story a little bit before I studied. I need to give a shout out to my mom. Yeah, I think my mom is a very passionate environmentalist and responsible for starting things like recycling programs at local schools and that kind of thing.

Actually, before I studied law, I studied environmental science, probably because of her influence. And then, I studied law and practiced law for about 10 years in Cape Town at a really great South African law firm, Gunston Strandvik. 

And it was during that period that I, with [name], the partners then at Gunston together with Pete Flynn, who's co-founder of Libryo, we jointly acquired an environmental consultancy called the Environmental Org Consultancy. It was a South African company and it serviced really great, leading companies and global brands in their South African operations to know what the regulation for them was. During that period, Pete and I collaborated to develop a software product, which we call the Standards and Legal System. 

And when I moved to the UK in 2015, I decided that would be the time to say bye-bye to practicing as a lawyer. I decided not to qualify as a solicitor in in the UK, and I thought, "Hey, let's just do some market research. Let's see if there is a need for what we've developed." And it felt like there was a real demand, and so we made the call to incorporate Libryo in the UK and get it funded by local VCs in London. And so, that's the very short story. 

It was significant as well that at that time, I was introduced to Malcolm, who's my other co-founder, Malcolm Gray, and his background was in asset management, and particularly, he headed up Investec Asset Management, now called Ninety One. He headed up their ESG stewardship program and policies. And so, he was one of the forerunners in the field of ESG. So, the three of us set out on the Libryo journey at that point.

Maiko Schaffrath  05:43

Amazing, and we'll dive a bit deeper into your journey also up to the present day in a bit. But before we do that, I'd love to cover a bit more what Libryo actually does, how it actually works. And before we do that, the problem you solve, really. I've summarized it briefly, but maybe in your own words, what's the problem and what's the size of this problem that you're solving? And then, how does Libryo actually do this?

Garth Watson  06:10

Thanks. So, if you're a global company, or somebody at a global company, and you're trying to make sure that you comply with the law across all of your operations, from jurisdiction to jurisdiction, the pain point is significant, the reason being is that law is exceptionally complicated. It's written in complicated words and phrases.

It's frequently updated. It's published from multiple sources, sometimes within one jurisdiction, but typically, an operation, say a factory or a mine, will be located in a number of locations, so take an American example. Federal law will apply, state law will apply, county law will apply, and then city law will apply, not to mention other regulators that may publish law that's relevant. That's just statutes. Then, there's courts. We typically don't deal with courts at the moment. 

The major need for our customers is statutes and regulation. And so, you could get that done by a lawyer, but that's real heavy lifting. It's the kind of work that a typical lawyer does not enjoy. It's really legal research. And so, often it gets outsourced or given to a junior. It's either done it really extensively and infrequently, or inaccurately, or not at all, and it's the kind of thing that a lot of companies resort to DIY Google and spreadsheets.

Credit to Excel. It's an amazing platform, but it wasn't really designed for legal compliance nor legal research. So, that's a vast pain point. We've tried really hard to figure out how big the market is for this. It's a combination of a number of different large markets. 

Anyone who's trying to figure out what the law requires for the sake of compliance at a specific operational site could be included as part of that market where the service providers or whether it's done internally, and according to bottom-up and top-down analysis, this is definitely a market in the tens of billions, and we think it's a latent market, too. In other words, if there was a product, people would buy it.

There's a mashup of different markets plus an accounting for these latent markets, and it's very large and hard to put a number to it, but it's definitely in the tens of billions, probably in the hundreds of billions in size. Yeah, so it's a significant opportunity.

Maiko Schaffrath  09:09

Amazing. And then, where are you at today? What's your current stage in terms of the traction you have with customers? What kind of companies are using this, and how are they using it?

Garth Watson  09:19

Thanks. We've invested very, very heavily in our product development and our legal data production. So, there's two aspects to the Libryo, the product and the modules and the features that it has. You could think of that as requirements, getting legal updates, then we've got an assess module in terms of which you can really drill down on what the law requires of you.

People, more than they want to know what the law is, they will actually want to know what does that do, so we've got a self audit, we call it Libryo assess module and then a whole host of other features which enable compliance. And then, the other side of Libryo is legal data production. 

So, a company wants to use those features that I mentioned, and they want to use it in Texas, they want to use it in California, then Germany, Italy, and so on and so forth. And so, one of the challenges for Libryo has actually been, how do we service a customer?

Even if we've got product market fit, they're right within the sweet spot, how do we actually deliver to them if they need us for multiple jurisdictions across the world? And so, we've invested exceptionally heavily in developing the data production capabilities and also rolling out legal data for many, many, many countries. Libryo's a very capital-intensive business in that regard. 

We've got coverage of some 84 sovereign states and over 500,000 sub-national jurisdictions like counties, cities, states, and the provinces, whatever they get called. And so, that's significant progress.

As far as customers concerned, we've got about 100 customers, many of which are enterprise customers in nature, and we typically serve them at either locally in one jurisdiction or across many jurisdictions, and the way we're growing is by those customers saying, "Hey, you're serving us in these states in America.

Could you also do Mexico? Could you also do you know, X, Y, Z foreign jurisdictions?," or, "Hey, you're doing environment, health, and safety. Could you do data protection? Could you do employment law?," and that's the way that's the way we're growing.

Maiko Schaffrath  11:57

Got it. And I assume, have you have you built pretty much the largest unified database of this type of information? What's already out there as an alternative?

Garth Watson  12:09

I'm going to say I don't know, because there's probably information that I don't know, but I haven't come across something like Libryo with the same degree of jurisdictional coverage. There are significant players in the space, the legal publishers.

Some of them are international in nature. None of them have the truly global coverage. All of them provide really top-quality regulatory and legal information, but it's not designed for anyone to use. 

It's designed for lawyers to use and legal librarians who are trained in legal research to use, and it's up to them to do the analysis and to figure out what are the applicable legal provisions, whereas what Libryo does is it enables the provision of what we call Libryo streams, and the Libryo streams contain all and only the relevant regulations that a given customer for specific operation has subscribed for. So, I'd like to say yes, but I don't know.

Maiko Schaffrath  13:20

Of course. Yeah, well, everything we know, it seems like that. Let's dive a bit deeper into some practical lessons and advice that people can extract from this episode, especially early stage entrepreneurs being on a similar journey. Obviously, the value of your product as we just discussed is being quite comprehensive, having all these different jurisdictions in there, having this one place to go for all your regulatory needs. Now, when you started the company, there [are] different approaches to take. 

Obviously, as a startup, you can't necessarily afford to have 100% coverage of the globe from day one. But at the same time, your customers are coming to you for that, or at least for something close to that, because I assume a lot of the customers that have this problem, as you said, are operating in all kinds of jurisdictions.

They're not just in one. If it's just one, it's probably better for them to just hire a small team for that quickly or something like that. I'm just wondering, how do you actually start a platform like this? Is it quite capital-intensive as you said, or was there a lean way of developing this product initially when you first started?

Garth Watson  14:37

Libryo is building a very capital-intensive business. We've benefited from many, many hindsight opportunities. We still haven't quite figured it out. As an early stage company, finding product market fit is hard enough. If you find product market fit, kind of it's yours to lose. I think Libryo has found product market fit.

But what's been a challenge for us is what I think of as product legal data production, market fit. So, like you rightly say, if we had all the data from day one, all we'd have to do is figure out product market fit, and we're off to the races. But if we had that global data set, that would be tremendously valuable data sets. It's like a fantasy question to talk about that. 

The question is, how do you build a global regulatory database incrementally? I guess the answer's in my own self-posed question, you do it incrementally, and how we sought to do it is on the back of customer demand. We got to a point early on where there was one deal, it was a deal for an international telephone operator, and it was probably the gutsiest deal that we've done.

We completed it, and we rolled out data for the whole of Sub-Saharan Africa. We went from two jurisdictions, well, two sovereign states, South Africa and the United Kingdom. I correct myself there, because South Africa is 11 provinces and 178 municipalities, and the United Kingdom to the whole of Sub-Saharan Africa.

It was cool, because it was EHS law for cellphone towers, so not a massive scope in terms of the domain, but a big scope in terms of coverage, and we really just used up all our pre-seed funding. 

It got us onto a trajectory, because it was a big deal. From there, we sought to do similar kinds of deals where they can leverage .Typically the thinking is, we have this coverage in terms of jurisdiction or domain coverage, domain being the areas of law, like environment, health and safety, data protection, so on and so forth.

We can roll this out for you pretty much immediately, but we're going to take time to deliver the rest, and most global enterprises have very long sale cycles. And so, a three- to six-month rollout, some of the time to most of the time, is acceptable.

And so, we seek to develop the database on the back of customer demand. Only though, if it's within the areas where we have product market fit. So, we're not just doing consulting, it is still software, but Libryo's unique in that we're not just SaaS, we're also a data company. So, it's novel in that regard.

Maiko Schaffrath  17:59

Love it. And then, how much did you raise to date, in terms of the funding that you needed to pull this off?

Garth Watson  18:05

We've currently raised £3.9 million.

Maiko Schaffrath  18:08

So far in total, throughout the whole journey?

Garth Watson  18:12

In total. Like founding to date, it's capital raised.

Maiko Schaffrath  18:18

Got it. One thing we talked about before was actually that, especially in the last year, you had quite a rough journey. I'm always really keen to dive deep into that, to extract lessons learned from that. It seems like you're through the worst at the moment. But talk us through last year, what happened and some of the lessons that you learned, and that must have been a very difficult year for you.

Garth Watson  18:46

Thanks. 2021 was super hard. Very, very challenging. We started out 2021 with what then was a good plan, and with the benefit of hindsight, I think was a good plan. So, if you take into account the discussion that we've had today so far, what do we need to get onto a hypergrowth revenue trajectory?

We need to roll out legal data, we need to be able to roll out legal data really quickly, and we also need to extend our coverage. So, it's a combination of having a lot of coverage, and also being able to say that we don't have the coverage that any given potential customer needs. To say, "Well, we can deliver this. We can roll it out for you in in a short space of time." 

We had raised some capital during the pandemic. During 2020 and 2021, things were opening up, and we thought if we execute on heavy investments into legal data production, we should be able to support our marketing and sales approaches. Our revenue should reach a certain level, enabling us to raise further capital.

We did that, and we're living in the good of it now. So, our legal data production capacities are really awesome right now. We've delivered some really great tooling, including some cool AR stuff, which was really accelerating our legal data rollouts, but the revenue didn't quite follow. It's not that we didn't grow; we grew really well. We just didn't grow at the rate that we needed in order to successfully raise Series A. 

And so, we are at a critical point, I mean, we were obviously managing runway and managing cash flow really carefully. But we had to make the call luck, we can't count on arrays. What we're going to have to do is keep the business sustainable, continue to manage our obligations to customers, all of whom are current subscribers, and many are on multi-year deals, and basically not impair the value of the company to a point where we basically just drive the thing off a cliff.

That's how startups die. All startups die because they ran out of money. That's always the reason. We had to cut pretty hard, and it was super painful. We've been very deliberate about building a company culture that's full of honor and encouragement and calling out the greatness in people. We did call the family like that, because you can't sack your family members. You're always family. But yeah, we had to let go and make 32 people redundant.

Maiko Schaffrath  22:30

Out of how big was the team at the time?

Garth Watson  22:33

We were in the 60s.

Maiko Schaffrath  22:35

You were 60 people and then half the team size, basically,

Garth Watson  22:39

Basically, half the team, it was a bit just more than 60. It was hard, and you might detect in my demeanor right now, it's obviously quite still quite close to the tear levels, not far below the glands. Probably one of the roughest four hours of my life was the four hours after we made the announcements to the company.

And then, I with Michelle, who's one of our captains, who I work closely with, she oversees legal data production. We just spent four hours on Zoom calling people and saying either, "You're staying. Congrats, this is how the future is going to look." Or, "Sorry, I don't know how to say this. But unfortunately, you're not going to be with Libryo beyond x date." That sucks. It's just one of those really sucky, sucky things.

Maiko Schaffrath  23:48

Yeah, it's probably the hardest, and I'm lucky to never have to make that type of decision. Maybe because I haven't been embarking on this type of ambitious journey that you've been on. I think that's how it starts as well, putting out such big intentions and actually pulling a lot of. But then, obviously, there is uncertainty in startups. 

These things are necessary, sometimes, so I appreciate you sharing this openly and honestly, and I just can't imagine the hours before announcing something like this, how terrifying that is and your head must turn in circles in terms of, is there a way to make it work?

Is there a way to keep people on somehow? But I guess in the end, it comes down to, do we have the money in the bank? Do we have the investors giving, investing? How was the time just before that announcement? How did you arrive at that decision? Was it relatively clear that you had to make the decision? How did you go about that process?

Garth Watson  25:03

What I've learned over the years is that there are a couple of ways, a couple of inputs to decisions. You've got spreadsheets and numbers, and then you've got other sources like non-financial data that ultimately translates into financial data. Making good decisions is about certainty. It's about taking the quantitative, cold, hard numbers, and it's about taking the qualitative stuff from all different inputs.

Whether it's hope from a sales conversation or whether it's you prayed, and in your spirit, you don't believe something, or whatever it is, and it's about bringing all those things together. With an abundance of counselors, there's victory. 

So, Pete, Mark, and I, we often diverge slightly, we don't see eye to eye on everything. But we've got a way of operating at Libryo where we agree together. You can't bury your head in the sand. There'd be a couple of defining moments for us as leaders at Libryo over the years, this was definitely one of them.

You have to make hard decisions, and then implement them as world class away as possible with tough mind and soft heart. And so, it was all about just doing that. To be honest, you're the first person that's asked a question like this, like a retroactive on the thing, sometime later. So, hopefully, that answer is good enough.

Maiko Schaffrath  26:59

Just a really quick break from this episode to let you know a little bit more about our podcast producer and content agency, Content Multiplied. With all the moving pieces of a business, you can't be stuck managing and creating new content all the time.

That's why I've started using Mhyla and her team at Content Multiplied. It's really an all-in-one content management and repurposing solution that can handle all your content needs. Visit them at contentmultiplied.com today. Contentmultiplied.com. Okay, let's get back to the episode. 

No, I think that's useful and insightful and I appreciate that. It does take you a while to process that and actually draw the conclusions for the long run as well. I think there's some real case studies out there. But then in a case by case is always different.

I don't know if you read it, but Hot Things from Ben Horowitz, which talks about the difference of a wartime CEO and a peacetime CEO. Did you feel like you had to make that transition in your head where you're suddenly from, "Hey, we're on this rocket ship, everything is amazing." With growing to making these tough decisions, did you feel like you had to switch something in your mind? What did you feel? or that wasn't the case?

Garth Watson  28:24

I think there's no such thing as a peacetime CEO and a wartime CEO. I think that in running a startup, there's always a blend of both, so it's just a level adjustment. We just accessed a level of, I guess, ability to suffer.

We dive deep into that and worked with that. And obviously, you draw on your reserves in different ways, but I don't think we've ever had peacetime or wartime, it's always a combination. I think we're always in a war actually. It's just, how do you feel during the war?

Maiko Schaffrath  29:11

I love that description. I think it's very much in line with what I've seen with people on the podcasts and entrepreneurs I've worked with. Some describe it as a roller coaster ride, like in the morning, everything looks great. In the afternoon, everything looks terrible. And then, half an hour later, it looks amazing again. It's just like on this journey constantly. You can't differentiate, now the current quarter is all peacetime, great.

Garth Watson  29:42

There's a thing that I that I read in a cycling magazine, and it was some professional cyclist somewhere, or triathlete or whatever, and their advice was something that they had been told by a coach, and the advice was, no matter how good or bad you feel, it won't last.

Which is great for long distance athletic exploits, because if you're feeling great, just enjoy it because you're going to slam yourself into hyperglycemia or something, or whatever. But if you're suffering, just pedal through it because it won't last, and I think it's the same in life, especially in entrepreneurship.

Maiko Schaffrath  30:31

Yeah, absolutely. I found a really interesting piece of advice that one of the founders, Tom McGillicuddy, the founder of Ticker, which is a FinTech, and actually, they're now called Circa 5000. It's a social impact investment app, and he was on the podcast and he shared some simple but quite powerful advice, I think. 

As a founder, you're on this journey with loads of highs and loads of lows, constantly navigating that. If you imagine it as a curve going up and down, literally a roller coaster, as a founder, you kind of need to stay in the middle, and not get too excited about the highs, because they're going to go as well, at some point.

There's going to be tough things and also not get too attached to the lows in terms of having this downward spiral in your head of everything is going to crash, you've got to be somewhere in the middle. That's the mentally challenging thing that founders need to do constantly.

Garth Watson  31:36

No, no, no, it's I disagree with that. I've heard it before as well, some sentiment similar to that. But because it's so hard at times, you don't want to mute your highs, you want to express the joy as best you can. You want to feel it to its full, you want to have those moments of peak self-actualization. Just the other day, I was looking through some of the stuff that our NLP team had done, and it was so sick.

I just got so excited. I called Pete, my co-founders and said, "Look at this, it's incredible," and we enjoyed that moment to the full. Because if you're going to have the other side of it, not that you don't deserve it, but why not experience the joy? But then yes, during the suffering, you've got to use that to your own advantage. You've got to be able to suffer well and play with the pain and use it to fuel you and so on and so forth.

Maiko Schaffrath  32:40

Got it. That's a really good different point of view on that. I love that. I think it's a good message to myself. Again, I'm not running actually a startup, I'm a solopreneur with a focus on Impact Hustlers, doing some consultancy work and building a bootstrap company with impact hustlers.

I think it's good advice. I'm somebody that, for example, almost never celebrates anything. We launched a community of founders this week, and I tend to go just to the negative in terms of, "This needs fixing, this needs fixing, this needs to improve," and I think a really good point on celebrating the highs, I think there's nothing wrong with that. You shouldn't be this cold hearted person.

Garth Watson  33:28

For stuff like that, you should always have a bottle of champagne in the fridge. You should always have that. So, not for everything, you can't be popping the cork every week, but for things like starting a new community and anything of significance. I mean, life's too short.

Maiko Schaffrath  33:49

I don't drink anything anymore, but I will have some non-alcoholic bubbly in the fridge from now on. I'll take that advice from you. Good, really good point.

Garth Watson  34:00

You can get some really good what's it called, that tea stuff.

Maiko Schaffrath  34:07

Yeah, sparkling tea. It's actually really nice, really nice.

Garth Watson  34:11

Have you tried? Champagne like kombucha, yeah.

Maiko Schaffrath  34:17

Got it. That's the key advice, key takeaway from this episode. Get some sparkling kombucha to celebrate. I want to cover one more thing about this difficult period last year and then obviously look into the future and the great things  ahead for you, rather than just dwelling on the past.

I think one specific thing that I'm keen to understand is one thing that's being faced with these difficult decisions of having to let go of employees, having to let go half your team. 

But then, the other one is how you actually communicate and handle it, and there's been a case recently in the US, I forgot the name of the company. But obviously, you're basically sending out an email, so you're all fired and pack your stuff, pretty much, and there was one Zoom meeting for the whole company saying, "Look,  basically half of you are fired," which is obviously not the way to go.

There's this George Clooney, what is it, Up in the Air movie where you hire these consultants to fire your employees, rather than doing it yourself. 

Obviously, there's lots of bad practice out there in terms of how to do this, especially with your employees. Their livelihood, depending on it, you may not be able to pay them loads of severance over.

So, how do you handle this in the best possible way in terms of communication to your employees, and what you can still do if people that listen to this are in a situation like this or will be? What advice do you have for them on that?

Garth Watson  35:58

I don't feel like I have advice. But I can say a few things that I think, which is you to do it the way you'd want it to be done to you. These processes exist in order to keep the ship afloat in a storm.

It would be lovely to say, "We're going to pay you off for a year." You're guaranteed a great job somewhere else, find yourself, use this opportunity to advantage. Say sorry, insert company name. But that's not the point, the point is to be able to cut costs quickly so that the company can carry on.

So, it's about providing the amount of severance pay that's due to everyone. If you can't do that, you've left it too late, really. That's where the spreadsheets come in. In terms of the fact that you're dealing with people, often people that are good friends, because it's a fiction to think that friends outside of business you might meet, you might hire a total stranger. 

But after a while you become friends with them, they become dear to you. I mean, there are people that we say goodbye to, who if I think too hard about it, I will start crying. I still can't believe that so and so and so and so is not working at Libryo. It's not a difficult question.

If you care about people, how do you have the conversation? What's the kindest way to do it? I remember that recent retrenchment, because the old pod talked about it. I just can't remember the name. But man, that is not the way to do it. And so, the way we did it, was we had an all company meeting.

It sucked, because it was on Zoom, but we're a remote-first company so it had to be, with employees around the world. What we did was we wrote a letter, explaining everything. 

Some of the stuff that I've explained in the call, how the company got to the point, why we have to do it, and we split it up, and we basically just read it out. But tried to make it like we weren't reading it, if you know what I mean. Like this is a company announcement. And then, immediately after that, I called Michelle, and we together had conversations with all of my team.

It was four hours’ worth, well not my team but those in the legal data production, ontology development and so on and so forth, that side of the business, and you just got to be yourself, and it's times like that where who you are is revealed. If you have got poor character, that's when the poor character comes out. On the upside as well, it's a time where character is revealed, I think.

Maiko Schaffrath  39:50

Absolutely. I think that was the case and we both watched the same episode. I just had a look again, it's a company called better.com which is a mortgage broker, I think, or a mortgage platform, I'm not quite sure about their business in detail. But I think it was about 700 or 900 employees being fired off Zoom.

I think that the CEO was put on leave after that, obviously I mean, by the board. But yeah, thank you very much for sharing your insights on that. I want to leave on a high note and cover a bit more what's going on right now. I think. It seems like you've been through the worst now.

You're building up again now, early 2022 as we're recording this, what's going on for Libryo right now, and how do you see the next year's evolve in terms of the product and the space and how you'll develop things? It was a bit of a fork.

Garth Watson  40:51

I started the forward looking thing. I mean, in the future, this database will be built out. So, we'll have that scenario, that fantasy scenario that you described at the start of the call, the start of the podcast, and it's not just environment, health and safety, but it's all legal domains.

Initially, the ones that could be filed and ESG environment, social and corporate governance, we're looking at anti-bribery and corruption, anti-modern slavery, data protection, supply chain stuff, and there [are] so many awesome megatrends that are currently under underway. 

The one is that non-financial reporting, there's a real movement towards companies voluntarily disclosing non-financial data, as well as a regulatory move significantly, so by the EU, to require the disclosure of non-financial information, so information relating to environment, health and safety, human rights, and not just in your company, but in your supply chain.

So, looking forward, the corporate sustainability, disclosure requirements, financial sustainability and reporting directive, the taxonomy regs, all of these things are going to be coming online in the next few years, in a material way.

And so, Libryo was actually, we didn't foresee these things coming online, but we've been looking at the evolution of non-financial reporting over the years, and it's all coming together in the regulatory space. Libryo was born for this, so in the future, that's what lies ahead for us. 

Our purpose is ensuring everyone knows what to do for a sustainable world, both on the compliance side, but also on the advocacy and compulsion side, both are important. And so, that's the future we're looking forward to.

That brings obviously, opportunities for us. We've got I think, a year or two, we're not raising fresh capital from outside investors at the moment. For me, that's exciting. Let's operate this company profitably, let's show the operating leverage we have, show what the margins actually look like, because it's very hard to look at margins especially when you have so many different data assets, each jurisdiction being a data asset. 

So, we're really excited about being able to prove out the cash return on capex, and that kind of stuff, and we'll have that opportunity over the next period. Super, super pumped about that. And yes, we're in a rebuilding phase. It's not like everything was bashed on, we lost great, great teammates.

But now it's not the case of leveraging the technology that we developed in order to support a smaller team. So, yeah, exciting times, in many ways, but also difficult times.

Maiko Schaffrath  44:38

Yeah, absolutely. Do you find that obviously, there's a lot of development in the space of climate as well, climate regulation, do you find that there will be much more need for a solution like this for companies to actually navigate that space?

I've spoken to a founder of a company called Climate Policy Radar, which is not quite about compliance, but more about exploring policies across the globe. But it becomes very complex very quickly. Is that some opportunity that you see right now that you're working on?

Garth Watson  45:12

Absolutely. Compliance has often got a negative view, because it's do no bad as opposed to just do good. But really, what society is doing at the moment is they're deciding on behalf of everyone who's not doing enough to do sufficient, do enough to overcome the challenges of climate change.

Leading the charge there, in many ways, is the EU, with the taxonomy regs I've mentioned just now, and it's coming into force already, in regards to climate businesses that are involved with objectives of climate change, adaptation and climate change mitigation. 

Part of that is, you've got to do those things, but then you've also got to do no significant harm to any of the other objectives like biodiversity and transition to a circular economy and marine protection, and that kind of thing.

And then, you've also got to comply with a whole host of regulations that are incorporated by reference into that. And then, there's the probably the most detailed set of regulations, the technical screening requirements that are also part of that, which read technical standards of very, very particular regulations. 

And so, companies are going to have to assess the compliance against that. And funds, the financial services sector is going to have to make sure that the companies that they invest in are within the taxonomy. They fall within the definition of a green investment.

And so, my question is, how do you do it without a product like Libryo, because the current data providers don't have that level of information, it's actually compliance information. So, yes, there's in the climate space and in the wider sustainability space, compliance information is seriously, seriously important.

Maiko Schaffrath  47:25

Amazing, a big role to play for you. A very brief answer for the next one for the last question is a quick summary. maybe one or two sentences, how does the world look like in 10 years if Libryo succeeds? How do you imagine it to look like?

Garth Watson  47:41

It already knows what to do for a just and sustainable world.

Maiko Schaffrath  47:45

Love that vision. Thank you so much. Thanks for sharing so openly on this true rollercoaster ride and can't wait to see what else you'll be working on or will be launching, be part of really important change that's happening. Garth, I really appreciate your time and your openness, and sharing your lessons learned. So, thank you so much.

Garth Watson  48:08

Thanks, Maiko. It's been great. Thanks very much.

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