Greg Marsh previously founded and sold for $250 million OneFineStay. He is now the cofounder and CEO of Nous which is a software company that deals with household utilities. The company has raised millions from investors such as Mosaic Ventures.
In this episode, you will learn:
- How Nous is helping homeowners in the UK
- Picking your investors
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About Greg Marsh:
Formerly a venture capital investor with Index Ventures in London, in 2009 Greg founded pioneering luxury accommodation marketplace onefinestay, which he led from inception through to acquisition by Accor Hotels in 2016 in a deal worth more than $200m. Greg has since taught at Harvard Business School, and served on the boards of several organisations including Amnesty International. He studied at Cambridge and HBS where he was a Fulbright Scholar and Ford Scholar.
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Read the Full Transcription of the Interview:
Alejandro: All righty hello everyone and welcome to the deal maker show. So today. We’re going to have the battle of accents here. You know we got the british accent. We got the spanglish you know the spanish accent. You know that I have but I think that we’re definitely going to enjoy our guest Today. We’re going to be talking about building scaling. Financing exiting I mean you name it. But but again I don’t want to make all of you wait any longer. Let’s welcome our guest to the Greg Marsh welcome to the show. So originally born in London you know the city where it always rains. So how was life growing up there.
Greg Marsh: Um, thanks, so having him had a ham but.
Greg Marsh: There’s a famous infamous medieval french document where ah frenchmen who committed truly heinous acts worse even than than being punished by murder were banished to the land of eternal rain they were sent over the channel. Permanent exiles. So yes, London is a rainy place but what it makes up for with bad weather in in sort of as a technology and entrepreneurship hub. You know we can. We can all attest and for me look it’s my home. So I grew up here and 1 of the few who stayed here thought. And a couple of occasions I thought about going west coast for a period of time I thought about going East Coast us for a period of time. We even flirted with moving to berlin after I sold my last business but I keep coming back here because I think it’s a very rare and unusual combination of things. It’s an entrepreneur right? where you have this one location unipolar. Ah, city you’ve got a political center an economic center a cultural center as well as being a large population and capital center and there’s not that many cities which can claim all of those all of those hats at once.
Alejandro: Now in your case you know, very interesting. You wc
Greg Marsh: I’ve been perennially indecisive I’ve I’ve never figured out what I want to do when I grow up. My sister is a doctor at about the age of 10 She announced I Want to be a doctor and then she goes and becomes a doctor. She did great I’m so pleased for her I’ve always been very envious of people who’ve known what they wanted to do and I felt like for a lot of my early. Career possibly even my later career I made decisions that kept my options open and so part of my career choice. My degree choice was around not really knowing what I wanted to do I Sometimes think I probably would have been happier if I just stayed with my first love which was computers I used to code as a kid and wrote computer against my bedroom and loved it. Um, but I. For whatever reason got Distracted. You know the British education system. Unfortunately one of its problems is it tends to it tends to sing a song sirens song about the humanities and it drags us into abstraction rather than keeping us applied. Um, so yeah I ended up reading Philosophy. It was at least it was more. Ah, more analytical discipline. There was a lot of logic in there and some and some sort of hard semi-math problems. But yeah I felt like most of the rest of my career I’ve been I’ve been so scrapping to get back into the more worldly more prag pragmatic stuff.
Alejandro: And you know it’s interesting. You know how when you think about the philosophy you know angle of things you know which is really discovering the why of things you know how do you tie that to you know to becoming an entrepreneur later on which is discovering you know. Obviously really the the why of problems. But then you know figuring out the solutions I guess your in your case, the first experience into the venture world was when you landed in apax when they had their venture practice. So that’s. That’s an interesting place to land after graduating from philos. So how do you land there and what was that experience with the venture world for the first time.
Greg Marsh: You know, look what what what? the quintessence of the study of philosophy is that it’s a generative discipline you are staying at the at the abstract creative end of thought right your before thoughts become disciplined enough routineized and rigorous enough to become functionally specialized at which point they become. History or they become maths or they become engineering and I think something similar applied about you know why? I’ve been continuously resistant to specializing in my career as well. Right? I mean entrepreneurship is a generative discipline. You are resistant to specializing as the chief exec of a startup you’re kind of a bit of everything and the moment you get. 2 dragged into 1 bit of detail you figure out right? There’s someone who’s way better at this than I am man to hire them to replace myself and in a sense you’re constantly replacing yourself and in in that generative role look venture capital I didn’t know quite that I wanted to run businesses I didn’t have the confidence to be able to start them again. You know. The Uk is getting better at in promoting and encouraging entrepreneurship as a legitimate business career. But I think we we have a long way to go still for that to be a default behavior pattern and certainly as the son of 2 lawyers where the kind of professional discipline was the expectation that. The the norm for me was I would have gone into a professional career investing represented this interesting interstice between that professionalized competence and something that was close to generative work and close to technology which has always been my first love so that was what attracted me to it I was looking for a way to kind of combine those interests in 1 place.
Greg Marsh: And you know it’s fun, right? I mean investing other people’s money is is a kick. It’s really,. It’s really intellectually rich and enjoyable. You get to be very lazy and other people do all the hard work if you’re in a good shop I mean Apax for a period of time later in my career Index ventures are really outstanding People. You get to work with in these in these places. And you get to sit in the middle of the the solar system and these crazy smart entrepreneurs revolve around you and that is an incredible luxury. Um I think it can also breed I don’t want to be disparaging about ah Investors. You know some of my best friends or investors. But I think it can also breed a kind of arrogance and a complacency I’m. You know I think I think the best investors are great investors because they know they’re not operators actually and I think the best operators um at some level know they couldn’t really be investors because they need they need to have their hands there because they need to grab it and play with it and and own it and build it and create and do that in a collaborative Way. So. As time’s gone on I think I’ve become more accepting of the person I actually am but certainly at the outside of my career I was really quite indecisive about whether I wanted to invest or whether I wanted to operate.
Alejandro: And in your case, you also did the reverse commute because you went from investing to becoming an entrepreneur I mean you were at Apax then you did a Harbor business school then you returned to Index So I guess you know while you were on the other side of the table as an investor.
Greg Marsh: At points.
Alejandro: What were th e 3key traits that you saw on founders that deserve the money and that could perhaps you know have the potential of building something great from those that you know still needed a little bit more to learn before you know they were fundable already.
Greg Marsh: Um, it is about teams um about individuals and teams. Usually it’s teams right? The research literature is pretty clear that founding teams are ah have both a low base around a higher overall return. Um. So so what are the qualities that predict success in successful entrepreneurs. Unfortunately like the literature on this one I mean this is my own experience. Yeah I’d love I’d love to have a great searing insight. The data is really bad on this. So if you reviewress back you ask as a bunch of works and former Hbs colleagues in mind did on this. Um. You you look at the scores that venture partners gave founding teams when they made the decision to finance a series a deal and then you you put that on one axis the other axis you put eventual outcome on an ah roi basis or you know cash on cash basis. And you’d expect to see some correlation. You’d expect the teams that were appraised as the best on the way in. But also the ones that delivered the best returns. Ah, it’s a mess. There’s an extremely low correlation between investor assessment of founding team quality and overall investment outcome above a hygiene threshold of founding team quality. But what this tells you at some level is there is an enormous amount of luck an enormous amount of part dependent outcome ah in in invent venture investing so you absolutely you want to make sure you’re backing smart people and people who are likely to be able to course correct on the early stages of their journey.
Greg Marsh: But it is a huge There’s a huge amount of uncertainty and any investor who says that they’re better at picking the smartest people is probably smoking something. Um, what I can say and I say quite confidently is that the thing I got from those interactions with founders ah during my index venture stage. So I was there. 2008 through ah 2005 through 2009 and through that through that 4 year period what what I what I took from it was was 2 things. The first is how widely different founders can be from 1 another and still be it. Successful. There is not 1 dominant behavior pattern or personality type or characteristic. Some are very driven and order driven people. Some are very you know, ah narrow people some are very broad people. Some are you know, very very difficult to work with some are very easy and accommodate. It’s not 1 path. Um, they’re already smart. They work incredibly hard. They’re all obsessed with their business. Um, they’ve all figured out. Thing. They’ve got a thing going on by the time you get through the door at a tier one fund. You’ve got something going on. Um, but the second thing I think he was it was it was about me getting less so at some level I was asking myself again and again one of the recognitions or acceptance I have about my own development as ah as an entrepreneur. Was it was me asking myself when I met these people could I do that and in some cases probably not some of the folks I interacted with I mean we just invested in Skype when I joined the index bench team I can you can pay yourself to Nicholas and and and yanus you’re like well heck no I mean they’re obviously in ah, an extremely high high high altitude. Those guys.
Greg Marsh: Um, but a lot of the founders me back right? Yeah, maybe I could do that. Maybe I don’t know maybe maybe I back myself to take that risk. Maybe I bat myself to give that a go and I think at some level accepting that I was never going to be able to let go of that until I had tried to climb that mountain myself until I had taken the risk and tried to play the game I would never let myself off the hook. When I first took the leap in 2009 to start my own business One fine Stay a lot of what went on in my head was look even if this goes wrong and I kind of expected at some level it would even if this goes wrong. Ah, the very least I will be humbled and I will be a better investor as a result right? I’ll go back tail between my legs to the guys and Index and say please give me my job back and I’m now qualified to invest your money in other people’s businesses because I now know just how hard it is and how how much good luck it requires mom.
Alejandro: But you you were already seeing that I mean you were already seeing it at at index and what you saw you know at apex and perhaps you know other friends that you had at Hbs that went out you know and started their own companies after the the masters program you saw how hard it was so I mean it sounds like. You wanted to to harm yourself I mean? Ah, why did you think you know after seeing all those founders seeing all these struggles that they were going after you know like you had this super comfortable job. You know the typical you know investor in rvc they are able to secure a job because they were successful as a founder in the past I mean it’s not easy to secure a. Vc job. Especially you know in 1 of the best firms in the world like index why why did you decide to make that shift first.
Greg Marsh: Yeah I think I think it’s I think at some level. It’s a bug not a feature I think the entrepreneurial spirit in this regard in a way I often advise people but like you say of acting right? if you could do something else and be happy. Do something else. Um, in my case I may I can only talk about my own experience with this. In my case I think it’s a recognition of my need for that level of kind of extreme stimulation and challenge. It’s ah a pretty pathological aversion to authority I don’t cope well with authority even wellbehaved and self-disciplined and. Good and well and sort of ah well- managed authority. Um I think a third thing is an intense desire to do work that is creative work investing is a tremendously fun job as it’s intellectually varied. You have a tremendous degree of leverage. You get rich slowly all of those good things. It is not terribly creative work and it is not terribly collaborative work. Um, and what I most enjoyed in my pre-index experience at gfx and then my post-ind index experience during the scaling phase of one by stay was I enjoyed building something creating something out of nothing out of hold cloth. And that intense relentless problem solving that you have to do to achieve that on the product side on the organization design side on the commercial problem solving side right? but also doing that with a team of people I mean I’ve I’m sure what talk about this but I’ve gone back in as an entrepreneur now in a new startup eighteen months ago
Greg Marsh: And very explicitly and deliberately chose again to do that with Co-founders. So like I’m not saying that investing is necessarily solitary. But as you become senior as an investor you do an awful lot of your work on your own and. And I don’t want to work on my own I get bored of myself I Want to be stimulated by other people I want that challenge I Want to work I Want to create something that has impact on the world with other people. Um, but unfortunately and as I say it’s above not a feature I don’t think I’m well suited to working for others. And so accepting some of those things about myself kind of you end up, you know I’m going to have to do this if I don’t do this or I don’t try and fail to do this and prove that I can’t do this I’m never going to respect myself and I think it was that as much as anything else in 2009 that got me off my ass to go start. Oneine state.
Alejandro: So then I.
Alejandro: Well how how did 1 find stay come to mind you know because obviously see ah problems you know and ideas they take some time you know to to to incubate but at what point do you realize this is it I got to really go after this one.
Greg Marsh: I nearly left twice before there were 2 other businesses that almost that almost got me there at the end of 2008 just before the collapse of Lehman Brothers I’d got as far as a founding team a business plan like early product staff I was paying a guy to work you know into evenings and weekends and so on and then the lehman collapse happened and that sequoia pitch deck went around saying r I p good times and I realized. That particular business I shan’t bore your listeners with the details all but but that particular business was not viable in a capital scarce environment 2007 was a capital rich environment two thousand and late Thousand Eight was a capital scarce environment and as a first timeout entrepreneur I was not going to be able to raise $10000000 coal to be able to build the business that that business would have required it. So at the start of 2009 I licked my wounds and I made a list and my list was kind of it was an analytic There’s a criteria sheet of like what are the minimum sufficient necessary sufficient conditions of a business model in the design inception phase of a business model. Have to be true in order for me to have conviction about going to start it given I knew on paper the chances of success were low I thought there was a lot of things that could go wrong, etc etc and I had a various head of set of rules. 1 was a counterfactual rule by London if this is a bit must be a business that if you could choose to start it anywhere you would choose to start it in London.
Greg Marsh: 2 a business that was intense that used technology intensively but was not a technology business in the sense that I am not I enjoy technology but I’m not a deep technologist and I knew that about myself 3 a business which did not require capital to get to product market validation again post-lehman there was not likely to be an abundance of capital. Etc. It’s about sort of 5 or 6 of these rules and so I went around essentially I sort of sat at my desk looking at other people’s business plans and media entrepreneurs kind of with these set of thoughts in the back of my head and one morning on the way to work I had I suppose an epiphany. And it was literally looking at these empty buildings in the center of mayfair and thinking how on a set all these places are empty. All of the time this is crazy. This is the most expensive and prime real estate in the world. How come. It’s empty and of course the simple insight is it’s empty because those who can travel travel a lot of this is sort of parked capital. There is a market failure here. And then the thought occurred to me I wonder what service would need to exist in order that folks who have really nice houses like these would make them available for short periods of time to visitors and that thought kind of got stuck in my head and it went round around around my head over the next few days and I had a strip to pisa and as a guest in a terrible airport hotel but I had terrible accommodation experience. Walking through the city one night thinking hang on a safe. This is what I want I want to stay in that apartment there in the center of town I don’t want to be staying at this miserable airport hotel. How can we fix its market failure now I’d read about ah airbnb and went on my own research. In fact I tried to meet the airbnb guys with an index venture hat on though, they’d just raised capital from sequoia at the time.
Greg Marsh: So I was kind of aware that there were pure play market models in in the ether though it was way early in that business’s journey and development I also had a sense that the last thing you wanted to do was compete with a pure play marketplace that was based in San Francisco if you were building that business in London you’re back to if you could start this business anywhere. You would choose to start it in London what must be true of the business model for that to be the case a pure play model is unlikely to succeed in London right? I mean you’re going to be competing with 1 hand tie behind your back against entrepreneurs in in the valley right? where they’ve just got. Ah, much greater density at the time particularly than even more so than today a much greater density of relevant product talent to marketing talent. So what was intriguing about onepoint day was it is a hybrid model. It requires an intense service operation component 1 fine oneen day looks from the outside like a curated airbnb. The inside of the business is’ all about operations and services. When we sold the business seven years later we had 700 people in the company and it’s an intensely complex operating business where you’ manage. Yeah, we raised we a bunch of money and we hired a bunch of people but a lot of those people were not doing product engineering wells a lot of those people we had a product engineering team. It’s the largest team in the business.
Alejandro: And you also had raised quite a big ah bit of money too. I mean you had raised what over eighty million bucks
Greg Marsh: But we also had a team of drivers. We had folks doing linen. We had folks doing warehouse management. We had folks doing hospitality and service management. The only way you can maintain a high level of service quality on the guest facingcing side or a high level of property management quality on the homeowner facingcing side. There were not third -party service providers in the markets where we operated that could deliver that service. We had to build those service functions ourselves right? So one fineins stay was from the very beginning at at inception and conceptualization phase a massively hybrid business. It was an operation. It was a luxury hospitality and operations business. With this curated marketplace over the top and so very first thinking about it’s like this is an unbelievably complex person to engineer and build It’s it’s multifunctional. You have to be good at a lot of different things to do this I knew I couldn’t do that on my own I didn’t want to do it on my own and so a lot of the early journey. What held me up from when I became obsessed with this. What got me what stopped me from jumping immediately was the need to find co-founders who could help me on that journey and it was actually when I found this great technologist. Ah who has postmersed business as a y combinator start up hadn’t worked out and I dragged him back to london but it was actually when my former colleague demetrius opted in. Who’s ah ah, a sort of saner and wiser individual like than me, he’s but sort of 8 years older than me and have a lot more management experience than I did it was when he said I think there’s something here. Let’s let’s build it together that I felt like okay this is crazy. It’s going to be unbelievably difficult but I kill myself I didn’t try and so heck.
Alejandro: Love it. Love it and now you guys raise quite a little bit of money I mean for this I mean over eighty million bucks you also had as investor index ventures so I’m sure it was not that hard to to get them on board now because they already knew you.
Greg Marsh: We tried.
Alejandro: But you really knew you know the investment side of things. So why did you choose the investors that you chose to write you know along you know in this journey with you. So.
Greg Marsh: I was I was actually I mean you say index week get involved. Ah I remember when I when I said I was leaving Danny Rymer sort of pulled me to 1 side. Hey Greg hey listen you know if you want to have someone to sit while they’re working on the business use our offices and I very expressly said. Thanks. But that’s that’s cool. It’s okay. I very deliberately distanced myself from the firm for the first nine months or so of my journey as an entrepreneur I think in part because I didn’t want this to feel like an index venture shot deal if I’d done that a I was anxious I could have got screwed on terms but b I was worried that if this was an index house deal. If index didn’t do it I was screwed. There was always going to be a bit of a risk of that for precisely. The reason you say there’s like an adverse signaling risk if you leave a tier one fund and the fund doesn’t follow but I thought my best chances of having a decent leverage at a series a stage and also my best chance of having a fallback plan if that doesn’t work out. Is going to be to have distance from index so I maintain distance from index for nearly a year and it was after we had sort of early traction and sort of a sharp growth trajectory that and actually after I had term sheets from a couple of the funds that at that stage I sort of opened the conversation again with the index guys and they made a decision within 2 hours and said let’s do this and so it was. And look yes I was happy to take their money clearly, it’s a fund that’s a firm I know and have a lot of respect for and in the end it was um I would also say that I really wanted an entrepreneur on the board and so ah, it was Robin Klein an index who ended up taking the board seat before Robin and Saul split out to build local globe.
Greg Marsh: As an independent fund so Robin was on our board for for for the first several years as as the index benches lead and again as someone who was on this entrepreneurial journey I felt like having a serial entrepreneur was was extremely attractive to me and I still feel you know at early stage where the very operationally complex business.
Alejandro: Got it.
Greg Marsh: You know I would always advise an entrepreneur to be to be very to be very enthusiastic about getting getting serial entrepreneurs or entrepreneurs on your board if you can um so.
Alejandro: Yeah I mean that that background operational expertise is key but I guess in your case you know I’m sure that the listeners are going to love you know, listening about the two hundred and fifty million dollars acquisition I mean first business first exit you know, first success I mean that’s pretty amazing. So. Ah, what point do you guys realize you know it’s time to pursue an acquisition and how did that happen walk us through that.
Greg Marsh: Um, one might say is a fascinating business as I’ve alluded to it is a fun it a deceptively difficult and complex business to operate um and after I guess it must have been five five and a half six years at ah at the pointy end I was. Physically and psychologically quite fatigued by it. Um I was also finding that the we were at an inflection point in the company’s development. We were either going to have to raise a lot of money I mean a couple 100000000 plus and build a large. Kind of make a big commitment to building out a brand so that we could have more control over our demand and engagement with the demand side of the business or we were going to have to partner and the partnership path we we got to know the ibnb guys a bit we got to know a bunch of the big hotel groups. Um. Was on first name terms with a bunch of the big hotel group ceos and what was increasingly clear in conversation with them was that they were extremely interested in what we were doing because they knew that airbnb was eating some of their lunch at least they knew that they couldn’t compete directly with airnb and they didn’t want to because they felt there was too much brand exposure doing this in an uncurated or unservice managed way. And so the attraction for them of the one finds stay partnership opportunity was that what 1 findst day did was service managed. It was curated. They could stick their brand on it and they didn’t worry about the risk of that and so.
Greg Marsh: It was a very natural fit from a marketing and distribution perspective I mean the conversations we had initially with Hayat and then we had them with a bunch of other the hotel majors and latterly acor was that look you’ve got a bunch of folks who stay with you for work purposes in shorts stay city center contexts principally they earn points. They want to spend their points for leisure travel 1 fine state is principally not exclusive, but principally a leisure travel product and so this is a very natural opportunity for points redemption and so there’s a very clear sort of strategic synergy on the um on the demand side. They were very interested in what we were doing. We started talking partnership. Ah, from a distribution perspective and of course big companies say well can we own a bit of it and the answer is well not really you either have to own it. You don’t own it and then Sebastian Bazan was the first to tip over who was the chief executive of that core into. Okay, then let’s own it and then it was ah then it was a discussion I say by that stage we had ah a fork in the road. Um, I look back on it I think yeah could I have taken it could I have done another 5 years Maybe maybe if I had the psychological resilience at that stage but it was a it was a hard business to run at scale and a lot of the thinking that’s animated the design of my current business mouse has been. But make sure you design a business which can be operated at scale and can be scaled fast or don’t play the venture capital game I got to know Nick Jones who’s just come come off. Ah what is it a 20 something year stint as the chief executive of soho house group. It has taken him.
Greg Marsh: Like twenty something years to build that business right? when you have these complex multi-local service operations with luxury hospitality attacks. These are very complex difficult businesses to build it takes time. And look who has financed that it’s not been technology. Venture capital firms who have a return horizon expectation which that isn’t well aligned with that class of business. So I think that some I think it was the right outcome um is a respectable outcome for the folks involved everyone made some money and um.
Greg Marsh: You know it’s good to see. It’s good to see you know some of the early team get well rewarded for their hard work and it’s good to see it continue as a brand under Acos ownership.
Alejandro: So I mean obviously that’s say when you finish the ah when you reach the finish line and and everyone you know he’s able to do so you know with with high flying colors. You know it’s a an absolutely very fulfilling. Um, you know I would say. Feeling for the founder now for everyone that really took the bet on you I guess in your case you know after you know they this tent you know this this this first rodeo you you know basically took some time you know to do advisory stuff. Government stuff. You know you? even you know were you? You were even teaching at day Harvard. Ah why why Nos I mean what why I mean at what point do you say hey you know I think I I’m ready I want I want to go out it again and I want to go with this.
Greg Marsh: Yeah, and I’m clearly too young to retire. Um and I wasn’t enjoy. Plural is fun but I wasn’t enjoying it enough I was finding it quite unfulfilling I found I was finding that um the ah that where things succeeded. It was usually because someone else was doing a great job in my heart of hearts I felt I mean you can always claim credit for someone else’s hard work but in my heart of hearts says like if if I invest in a company or I’m on a board and they’re doing well. It’s probably because you know the team is doing the right stuff where things are failing. There’s almost nothing you can do as a board director actually. But you can wring your hands and you could fire the chief executive in theory but in practice we know how that ends usually in earlystage companies. Um, so I mean I just wasn’t enjoying that that sort of ah actually Robin Klinein once said to me my my sometime monfe state board member who said you know being a board member’s like being a grandparent. And that was very insightful. You have to be able to let go of it. You have to be able to leave it alone at weekends and and leave it to the parents to make the hard parenting decisions. Um, and I guess I’m I’m I’m not ready for that at this stage of my career yet I mean I think I have some value as a board member but I I still need to build stuff. There’s still that that and that desire in me. The challenge then is like this is ah this is ah this is not a 3 year journey it’s a 10 year journey if things go well, it’s longer and sos you got to build something you deeply believe in if I reflect on my one fines day experience what I love was I love the creativity I love the brand building I love the teamwork I love the problem solving and the product work.
Greg Marsh: Um I liked the product but I didn’t ever fundamentally feel that the product was making the world a better place and I you know I was finding myself doing government advisory work I was doing charity work in a variety of different contexts. I was looking for ah a way of expressing my interests that included a powerful sense of social mission and social purpose and social impact and I wasn’t finding that in my day job. So I was having to do a portfolio of things to get that and a lot of the design thinking that went into the nous model was. Okay, how can I how can I live in 1 place. How can I do 1 thing that fulfills me both in terms of social impact but also ah building a business that I’m intensely proud of and so a lot of the early work was not trying to build the double bottom line business or start a charity but trying to design a business model. Which if it were to succeed on its own terms as a profit-seeking enterprise which it is I mean we’re a Bcorp but it’s still a profit-eeking enterprise if it succeeds on its own terms now so we’ll have I strongly believe a potent positive social externality. The nature of the problem we’re trying to solve and how we’re trying to solve it. Will lead to very significant real social benefit and I think that means that radically simplifies my life I don’t have to be on the board of a charity I don’t have to worry about you know, ah having other sort of meaning and purpose this is my meaning and my purpose I do this I have a family. Um.
Greg Marsh: I do a little bit of teaching because it’s nice to give back that way but actually this is something I want to build and I’m proud to build for the next decade in terms of the.
Alejandro: So then let’s talk about that real real quick then you know just show that the people that are listening get it. Why ended up being the business model of now. How do you might? How do you guys make money there. Okay.
Greg Marsh: Um, yeah, so now so very simply put now. So for your house. It is it will be an intelligent agent that makes all of the boring routine decisions about the stuff related to supplying services to your house. Who supplies your energy who supplies your broadband your mobile phone telephony your car insurance your home insurance your mortgage all of these decisions which added together but present probably 40% of the stuff that we spend money on as a household this class of. Non-discretionary recurring expenditure 40% of what we spend money on as a household. It’s 40% of gdp I mean as a spend category this is quite literally the larger spend category that there is and what characterizes as category of spending is that we underinvest as householders time and effort in it because. Who supplies your energy has no effect at all on how you consume the experience of using energy if you turn the light switch on the same electrons flow down the same cable and the same light bulb lights up irrespective of whether the energy is supplied by 1 company or another company. It is a commodity. And because it’s perceived as a commodity and substantively. It is 1 people underinvest in the procurement process and because people under avest in the procurement process vendors take advantage of households and the the kicker is when you dig into how much vendors take advantage cumulatively across energy mortgage insurance products and so on.
Greg Marsh: For a typical yeah uk household and the median household income. It’s about £1000 a year of overspent now £1000 a year for each of 30000000 uk households is just an enormous amount of money and that amount of money should be consumer surplus currently it is produce a surplus so we look at that and say well. How do we fix that. And clearly the current market structure militates against a solution because the current market structure is I as a householder want to get cheaper energy I go to a site I search for cheaper energy and I get cheaper energy but the supplier of the intermediary who who intermediates between me and the energy companies. Isn’t working for me as a household is working with energy companies the deal they are promoting is the one that they get paid the highest level of commission on and moreover it naturally equilibriates with a high low pricing model in the market where I am lured into switching my supply to a low price deal. And the supplier will walk me to high pricing over the next 2 to 3 years and so as a result unless I am hypervigilant as a consumer I’m going to end up getting screwed and that’s what happens consumers get screwed and the consumer groups that get most screwed are the ones who have the least money and often the ones who are least financially literate or sophisticated. They’re the ones who are the busiest so often parents with two young kids and a car and a dog. They don’t have time to deal with this stuff and so they get screwed and that’s not fair and it’s not right? and it’s silverable.
Alejandro: Well, ah, that’s the way that’s the way that it always happens and they always say you know like you were saying you know, definitely doing something that has an impact you know you were alluding to that you know earlier you know I think that you know I’m sure that now you know obviously the the second time around you know you guys have also you know, raised some money. Ah, from from outside investors I guess that you know imagine if I was to put you into a time machine and you were able to go back in time Greg you go back in time to that moment where you’re perhaps still at index and you’re wondering what to do? you know you’re wondering you know that you want to start a company by. You know you’re wondering you know what What’s that going to be if you had the opportunity of going back in time and giving that younger Greg one piece of advice before launching a business but would that be and why given what you know now.
Greg Marsh: Um, well am I advising myself as an early investor I was advising myself as a student I mean I go even further back in a sense. It was my anxiety and my lack of self-confidence that inhibited my doing this when I was in my early twenty s I mean the key thing is life gets really expensive, really fast and if you don’t. Jump and take those risks early. You know it doesn’t get easier now. The nature of the kind of business challenge. You might seek to solve as you become more senior changes I couldn’t have started 1 fine stay in my early twenty s I wouldn’t have tried to it was a stretch even in my as I turned 30 I wouldn’t have been able to conceive of how to start a business like now. Until I had a bunch more experience right? It’s a very very complex ambitious business which is a multi-care managed service with a ton of kind of regulatory and and technological and product complexity. Even now it’s a scratch but I feel like now I’m ready for this class of challenge. But the the problem you will try to solve. You know you will find you the important thing is the temperament and the attitude. So if I could advise myself it would be just get off your arms and take a risk back yourself. Trust us. Ah.
Alejandro: I love that I love that the problem will find you I love that Greg now for the people that are listening. You know that will love to reach out and say hi. What is the best way for them to do so okay.
Greg Marsh: I’m Greg at now Dotco N o us dot co I am always interested to chat, especially to folks who are thinking about building their own businesses I’d love to say I do a lot of investing I have done at the moment I just don’t have capacity because I am spending 80 hours a week on the main thing. But um, yeah look I mean 23 3 is going to be a huge year for us as a business we’re going to be doubling in size. We’ve got kind of great early product market traction and some tremendous early signal from market. So it’s exciting, but it’s a lot of work.
Alejandro: I love it. Well Greg thank you so much for being on the deal maker show today. It has been an on earth to have you with us.
Greg Marsh: Thank you Aandra for the good questions.
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