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Brand Growth Heroes ranks in the top 1.5% of ALL podcasts globally. With +25 years' experience working for brand giants and as coach to over 400 challenger brand founders, Fiona Fitz asks the questions you need the answers to from the founders of wildly successful consumer goods brands driving transformational growth.
Do you know that is such a brilliant question?
Joanna:I think, for me, I knew I had created a brand that I believe in a 100%. I mean, there is not one crack of doubt in my belief in my brand, and that is vital.
Fiona:Welcome to Brand Growth Heroes, the leading podcast for the founders of Challenger Grocery Brands. I'm your host, Fiona Fitts. My 25 years at global giants such as Nestle and Challenger Brands such as GU Chocolate Foods, Chobani, and Strong Roots, as well as coached over 400 scaling brands, means I have the experience to ask the questions that truly matter and get you the insight that will inspire you to think differently and drive serious growth for your brand. In this latest episode, I chat with Joanna Jensen, the founder of Child's Pharm. This multi award winning natural skin care brand was founded, like 99% of businesses born to female founders, from Joanna's own need for something that didn't exist in the category at the time.
Fiona:A bath time solution for her child with medically diagnosed eczema. Joanna scaled the business to £20,000,000 and decided that the time was right to source additional funding for growth, but instead sold to PZ Cousins, who owns brands like Imperial Leather, Saint Tropez, and Carex. She describes herself as being a driven workaholic, but she's also a brilliant mentor and advocate of female founders and female founded businesses. She's also an investor in some of the businesses we've had on the show, including Freya Bone Broth and Hunter and Gather. During our chat, Joanna gives us many of what I call those 500 k moments, including advice on margins, cash flow, when to hire and at what level, what to look for in your team, and more.
Fiona:By the way, if you're listening to this on Spotify, you'll find a place where it says ask a question. So ask away. If you have any questions about this episode or anything that you thought was helpful or useful, please let me know. Joanna Jensen of Charles Farm, thank you so much for coming on Brangare Theories. You are so welcome to come on the show today.
Joanna:Thank you very much for having me, Phoebe. I'm delighted to be here.
Fiona:So many people have been telling me to have you on the show for so long now, because we've both worked with Elantra, and we'll talk a little bit about that in in a while. But for those of our listeners who don't know Childs Farm, which will be very few of them in the UK, I think. Tell everybody, what is Childs Farm? How and why did you found the business? And eventually, we'll get to the fabulous story of how you exited and what you are doing now.
Joanna:Well, Childs Farm was like most female founders. It was a needs requirement. I had a daughter born with medically diagnosed eczema, and there was nothing in the baby and child personal care aisle that could cope with that. So I took it upon myself to create this myself. And I did that in 2011.
Joanna:And child's farm very quickly became the leading brand in that category because we managed to do something that no one else had done, create a product that actually soothed sensitive and eczema prone skin, had fragrance, felt nice, smelt nice, looked nice, fun, bright, colorful packaging, all based on my kids and the, ponies and other pets. Bathtime is meant to be fun. And you're a parent. I'm a parent. And, you know, sometimes bath time can be heinous because you're knackered, and it's the last thing you want to do.
Joanna:But it should be fun for everyone. It should be an enjoyable situation. But for kids with poorly skin, it it is less so. And they're expected to use stuff that looks very medicinal, blue and white, smells of nasty chemicals. And I thought, no.
Joanna:Not for my kids. And so many other people are in that boat. 1 in 5 under fives in the UK suffers from atopic eczema. So it it wasn't hard. I think I say that.
Joanna:It wasn't hard. It was hard. It was a category that needed reform. It was a crusty, dusty dinosaur of a category, and it needed a little sprinkle of love.
Fiona:So did you start by making the products in your kitchen, or did you go straight to co manufacturers? Because you had quite a lot of serious jobs in finance and in property, didn't you? So you're quite commercial and focused. So are I'm wondering whether you did it the same way as many of us would have, which is, like, stir things up in your kitchen, or did you go straight out looking for a co manufacturer?
Joanna:I did have a bit of a mix and stuff. But to be honest, again, you know, I because I knew what I wanted in terms of natural and naturally derived ingredients. And I knew what I didn't want. And I also wanted to trial with the fragrances. But once I'd got something and I thought, okay, this can work, then I went to a 3rd party because frankly, life's too short.
Fiona:Okay. Great. I love it. I love it.
Joanna:And I didn't really fancy sterilizing my kitchen and inviting the local health and health and safety and trading standards around. So, yes, definitely did it with someone who knew what they were doing.
Fiona:So when you ended up on shelves first and I what I loved I was listening to another podcast you did recently was you talk about, you know, 2 years treading the streets in in a white van. And one of the very earliest podcasts I did was, with Gary Lavin of Vit It, which you probably see the Vit It vitamin drinks all around the world. And Gary always talks about the fact that, you know, he didn't that business didn't take off until he got into his wholesalers van and pretended he was one of their team for 5 months in Dublin and got all the listings himself. And I love that, you know. So you did that, and that got you your your independent stores, was it?
Joanna:Yeah. And I mean, a bit like bit like Gary, I went round with our 3rd party distribute pharmacy distributor too and literally went pharmacy to pharmacy. And, I mean, that was that was hard work. That was tough. But, yeah, I mean, if you want to do this, you can't sit back and expect they're all going to come flooding to you.
Joanna:I think part of me did. Mhmm. I thought people will come to me and waitresses will just say, oh, yeah. No. Brilliant.
Joanna:I had no idea how retail works. And then it was a rude awakening, then I rolled up my sleeves and got on with it.
Fiona:But no better way, right, than when you're going into a pharmacy and learning about, okay, can I do a transfer payment now or do I have to send them an invoice? And, you know, whether the cases come in first or they pull from the distributor. Like, you're learning rather than going straight to a retailer and wondering about JVPs, you're actually learning on the ground. I'm sure that was a really great, grounding for you.
Joanna:Oh, for sure. Because it also taught you about cash as well, because I was very trusting. And I would give people stock, and I would say, you know, give them 30 days. And I didn't get paid, ever. My first sale, I never got paid for.
Joanna:And you learn that fairly quickly that don't trust anyone.
Fiona:I know. I'm still learning that 25 years in. Believe it or not, it's recently happened to me. So it happens to it happens to us all, doesn't it? Because you do Yeah.
Fiona:You do trust. Quick one. I'm thrilled to share that Strong Roots is continuing their support of brand growth heroes for another season. Finding quick and easy meal solutions that are also better for you can be a real challenge for busy families like mine. That's where Strong Roots comes in for us.
Fiona:Their veg packed frozen foods make it incredibly easy to enjoy delicious plant based meals that everyone in my family loves, whilst doing a little good for the planet too. We love their sweet potato fries, crispy cauliflower hash browns, and yummy spinach bites. Honestly, their products are a lifesaver for us on busy weeknights. What's even more important though is that Strong Roots is committed to using clean ingredients that are better for you and better for the planet. They're actually one of the pioneers in terms of having their carbon cloud on the front of pack for full transparency of their impact on the planet.
Fiona:And as a b corp, they're committed to improving this number as well as all the ways they do business. I've been fortunate enough to work with Strong Roots since 2016, and I'm proud to support a company that's always striving to do better. So head to the freezer aisle and try Strong Roots for yourself. Don't forget to look at their ingredients on the back of pack. I think you'll be as surprised as I was at just how clean, tasty, frozen food can actually be.
Fiona:Thanks to the team at Strong Roots for their continued support this season. Good for you, good for the planet, good made easy. So what what are the things I'm wondering? So when I first came across you, it was so I've I've lived, for the last 5 years on the Isle of Man, because my husband's family are all based here. And before that, I lived in Ireland for, about 8 years.
Fiona:And before that, it was France and and then the UK. So I I didn't get to meet you, Charles Farm, until I was in the Isle of Man. And the thing that struck me, and I all I think I already had the podcast at that point. The thing that struck me was, oh my god. I have never come across this brand, but the amount of facings that you have on shelf was just quite mind blowing for what I thought was a fairly new brand.
Fiona:Right? And I remember reading, I think you you got to your 1st 1,000,000 in 2018. Yeah?
Joanna:Yeah. Pretty quick.
Fiona:So so that means that basically the time I saw you, 2019, 2020, you were a fairly young brand yet you had 8, 12, 16 facings. How did you make that happen? So what was it that meant that you could get that many facings on shelf so early on?
Joanna:Well, by by 2019, we were the number one brand in the category. So that was,
Fiona:Oh my god.
Joanna:Ahead of Johnson's baby, ahead of baby Dove, ahead of them all, ahead of Aveeno.
Fiona:So how did that happen?
Joanna:Because we did exactly what we said on the packaging. So we were suitable for sensitive and eczema prone skin, and we had an MHRA approved sample on that, which, of course, numerous companies, who shall remain nameless, kept on shopping us to the MHRA and saying that we couldn't have this and kept on writing to me and saying we couldn't say this. And, you know, I had the last bloody laugh on that, didn't I?
Fiona:What's the MRHA, just for those of us who don't know?
Joanna:That is the agency that deals with medicinals, medicines, and health care.
Fiona:Like the FDA in the States?
Joanna:Yeah. Exactly. And and what they do, you've got 2 you've got 2 parts of them. 1, which is for medical proposition, so products. So for example, dandruff is a medically diagnosed condition.
Joanna:So therefore, that needs approval by the MHRA. But something like, personal care, it it's dealt with by the Borderlines Agency. And so for me, I was proactive and created that relationship with the Borderlines Agency. So I showed them my labels before I had them printed. But we had every right to say we were suitable for sensitive and eczema prone skin.
Joanna:And we actually made it so that the trade body for personal care, which is is the CTPA or the CPTA, I can never get it the right way around, actually changed their wording. I asked them for help on the wording, and they said you'll never get it changed. So I went straight to the MHRA and did it myself. And that meant that we could say on our products we were suitable for sensitive and eczema prone skin, and nobody else could at that stage. We created a product that people absolutely loved because it did what it said on the tin.
Joanna:It smelled great, It felt great, and it soothed sensitive and eczema prone skin. And there was nothing out there that did that. And we were using natural origin ingredients. We were really eco conscious about our packaging. And all you needed and all we needed was at the time before Facebook was monetized was a couple of moms posting photographs of their children before and after using our baby moisturizer, and the difference was profound.
Joanna:It was then caught by the press. We were known as this miracle cream that cured eczema, and it just went mad. And for us, the two things that made a profound difference was, 1, we had a fantastic product. Fantastic products. You can market the bottom of anything, but unless you've got an amazing product, don't bother.
Joanna:And 2, we had people that were so moved by the results, they wanted to share them with everyone and anyone. And that completely changed our business. So that began really 2016, this kind of Facebook momentum, and it drove that business. And we I mean, still by 2018, we still didn't have a listing in Sainsbury's.
Fiona:Okay.
Joanna:They had to list us because if they didn't, they wouldn't get their share of the the category.
Fiona:So at this point, you were still Boots and Waitrose, was it?
Joanna:Boots, Waitrose, Tesco's came on actually, Asda came on fairly swiftly. Morrisons, Tesco's, they were all quite the Sainsbury's was the last. And, actually, it was quite a tricky buyer. And, I mean, I she she really did not like me. And I phoned her every week.
Joanna:I didn't care. And I just said to her, you have got to have us. Do you know I I would post it. I sent it the whole time. Look how much your market share is moving literally week on week.
Joanna:And then in the end, they came to us.
Fiona:Can can I ask you? Because one of the things that really strikes me about and I I we're only saying hello for the very first time today, but I have listened to lots of of episodes that you've done with other fabulous podcasters. One of the things that strikes me is you have a wonderful sense of confidence and belief in what you're doing and what you were doing, but also confidence in the in the business sense that it makes for the people you were selling to. And it's something that with the founders I work with, they don't yet have that confidence because they are unsure that it makes business sense for their buyers to take their brand on a lot of the time. Gosh.
Fiona:Yeah. And and it's very difficult to work with that because they might be much younger, they may not have had the same career or experience that say you've had or I've had, and maybe their product is another variant of something, a need state that's already been answered by the category. All of that to ask the question, how much do you think that that confidence came from your experience and your own personality, or did it come from the fact that you knew that that category needs state or that shopper need had not yet been answered?
Joanna:Do you know that is such a brilliant question because
Joanna:I was talking to somebody the other day. I really struggle with stage fries
Fiona:Oh.
Joanna:In things that I'm not a 100% confident on.
Fiona:Okay.
Joanna:And so that's not I can stand up and talk to a room full of people. I can do live telly, live radio. I have no problem. Stick me on a horse. Put me on a set pair of skis.
Joanna:Even though, you know, really quite competent, particularly horses, I will get really nervous. And I think for me, I knew I had created a brand that I believe in a 100%. I mean, there is not one crack of doubt in my belief in my brand, and that is vital. You cannot have any doubts in what you've created. If you do, you've got to address them.
Joanna:Mhmm. You can't go to a buyer. Mhmm. Selling with passion, love, all of the above, if you don't believe it. How on earth are they going to believe it if you don't?
Fiona:You know, this is this is we on on the mini MBA, the the Brancher theory's mini MBA, we have a phrase that we've coined with this first cohort and it is, a $500,000 moment. And you have just given me a $500,000 moment. What we what we say that those moments are is when you have that moment in your brain where something clicks and you realize that that moment or that click is going to either save you $500 in the next 12 months or it's going to make you $500 in the next 12 months. But you are so right because the wrangling, the mental wrangling and the emotional wrangling that a lot of the founders that are out there on Linkedin or that I would work with, they're still not a 100% clear or a 100% sure of where their brand offers clear value versus all of the alternatives. And if they can get to that, then they will be able to sit in front of investors, you know, when they're raising money or buyers and frankly be as confident as as you are.
Joanna:Yeah. The you've got to if you don't believe it, and I've got this sticker on my computer, actually, and it's a Walt Disney quote. If you can dream it, you can do it. You have got to dream it, and then everything will flow. If you allow your own self doubts, your own concerns to get in the way, your energy is being depleted.
Joanna:It's not being it's not being funneled in the right areas. And being a founder and having, you know, a small business and having employees, you know, that's tough enough as it is, isn't it? Yeah. Why make more agro for yourself? Why make everything more difficult by just not believing?
Joanna:And there's a brilliant, and I'll I'll leave it at that because you can go and look at it, which actually is great for your students. Bob Newman did a clip, and it's it's about just stop it. If you are doing things that are standing in the way of your success, stop it. Just stop it.
Fiona:I'll put that clip in the show notes for anyone listening.
Joanna:I'll send you a link to it's it's genius. It is we are, particularly post COVID, turned into a nation of nasal gazers. We have just got to get on with it. Life life, it's so short. Why are we so
Fiona:I know. But you know what? To be fair, there are 100 of thousands of people out there who are getting on with it and who are giving it socks. And and I heard you talk about, you know, eating out of the bin. Who are eating out of the bin?
Fiona:And and and I work with a lot of them, and they are giving it everything. I think the point I was more making was that there are so many alternatives out there in so many categories. Whether it's sustainable home care or whether it's, guilt free snacking or whether it is, you know, period pants. There are so many alternatives and this comes down to that age old debate between Byron Sharp and Mark Ritson. Is it about differentiation or is it about distinctiveness?
Fiona:I believe that you have to have a distinct answer to a distinct need or at least a distinctive a different answer, a better answer to a need than alternatives. Because if you're just
Joanna:I agree.
Fiona:Yeah. If you're just the same answer in a slightly more brand distinctive way, well, then it's gonna be all about above the line and shouting. Whereas, if you've got something like child's farm and you fundamentally make a child's skin, you know, clear of eczema after a certain number of weeks, that is a totally different answer to a need state that a lot of mothers have. Right?
Joanna:Yeah. Well, look. I went into a category that hadn't been touched for years, for years. And I, I mean, I I'm an angel investor, as you know, Fi. And I look at a lot of brands.
Joanna:A lot come across my desk. And the ones that get filed under thanks but no thanks are the ones that are in a busy category trying to do something that is not differentiated from the next person, or it's going to be somebody doing something in a busy category, which is not a big category in the first place. So one of the first things that I ask people is, you know, how much is this category worth? How much of this category would you have to own for your business to be worth, I don't know, £50, a £100,000,000? And if you don't know that when you start, go and find it out.
Joanna:Yeah. Because without knowing, you could be sweating blood, sweat, and tears. Yeah. And, actually, your reward is never going to be a reward that's going to give you what it is that you're looking for.
Fiona:Yeah.
Joanna:And it's a it's a stage at the beginning of your journey that I find so many people miss out on. And I you know, my category was only in the UK, was only worth £150,000,000. But I knew that if I could get 20% of that category, I would be the lead in the category, and I had all the opportunity with international.
Fiona:So let's go back to the the phase of growth where so all of those retailers had come, like, got you on board. Eventually, you got Sainsbury's on board. What kind of turnover fork was the business doing at that point?
Joanna:I think 2019, I can probably tell you, actually.
Fiona:In one of your amazing files, I read that you have a wonderful sense of filing. I am
Joanna:just oh my lord. I say in a previous life, I was a housekeeper in a big house, and I knew where every single sheet was.
Fiona:So just for those of you who are not watching the video, Joanna is now searching her filing system. I can see her eyes move to find out exactly the turnover.
Joanna:So when I we were 2015, we were just shy of turning over a1000000. So that was we went into Boots and Waitrose in 2014.
Fiona:Okay.
Joanna:2015, we were turning just shy of a1000000. So by when we were the number 1 in the UK for the first time, we were turning over 17,000,000. So that was 2019. So we went from shy of a1000000 to 17,000,000 in 5 years.
Fiona:My gosh.
Joanna:So the the lumps were just under 1, then 2, 6, 14, 17, and then the following year, we went up to 20.
Fiona:That's amazing. Say those say those lumps again.
Joanna:So I wanna start in 2,014. Turnover was 400, 15, 900, 16, 2,000,000, 17, 6,000,000, 18, 14,000, 19, 17,000,000, 20, 20,000,000.
Fiona:Okay. So continued, but quite steady adding on 3,000,000 each time. It wasn't like it was doubling, but it was really steady and quick.
Joanna:We we had triple digit growth right at the very beginning. And and I think the one where we were, I mean, we were Sunday Times top 10 fastest growing business, I think, 2017. We were growing at such a pace. But, again, remember, we know it's a £150,000,000 business in the UK. With, you know, 17 turning over 70 6, 17,000,000, we had, I think we had 18% market share.
Joanna:So you've got to look at it and see how much is realistic. When we came into the business in 2,012, Johnson's had 32% market share. When we got 2019, they were at 13.
Fiona:Do you know what it's exactly like? It is exactly like when Chobani, the Greek yogurt in the states, went into yogurt in the states, and the market share of Greek or strange yogurt in the states that when they went in was 4% of all yogurt was Greek restrained. And by the time well, when I joined was 2,010, 2011, the market share of Greek yogurt in the states was 46%, and Danan's market share was at about 30%, and Chobani's was equal to theirs. So in space of 5 years.
Joanna:You just can't underestimate how much of a dusty category you can steal.
Fiona:And the other thing is is that and I might send you this link, because this is this might be this is quite an interesting one for you. I think when you're doing that your talks and stuff. Hamdi, the founder of Chobani, he always talks about when he went to, fruit puree manufacturers in the States and said, give me some peach. They would say, well, look, we're gonna give you some pear with peach flavoring. And he'd be like, you're gonna what?
Fiona:What do you mean you're gonna give me some pear with peach flavoring? He said, you know, yogurts weren't yogurts. They were made from weird and wonderful things. They were yogurts, but they weren't made in the same way that we would expect a yogurt to be made. But he said, why aren't the incumbents doing this?
Fiona:Why aren't these big companies making it properly? And that's what you did. You did exactly the same thing. Right?
Joanna:Yeah. We just I mean, you know, in 2016, baby baby, Johnson's baby, you can remember the yellow shampoo? Yeah. That yellow came from cow's hooves.
Fiona:Lovely. Like old granny nails, basically.
Joanna:And they were still using formaldehyde in their formulations in 2016. So when I say it was a dusty category, a bit like your yogurt example, we came in using natural, naturally derived. We knew where every ingredient came from, and we we specifically bought certain ingredients because of their socioeconomic impact. We were we knew where our box plastic for our bottles came from. As early as 2017, we were using 30% recycled plastic.
Fiona:What was the impact on your margin though? So for you know, you obviously you must have had a much more expensive per unit economics, you know, margin, much more expensive product to produce, including packaging than, say, Johnson and Johnson. I'm not talking about volume related, but just
Joanna:No. But it it doesn't take a rocket scientist to work it out. If you can sell a bottle of Johnson's baby shampoo for a pound in pound land, it's not gonna be top quality, is it?
Fiona:No. But did that mean that your so what where did where was your head on margin all the way through this? What journey did
Joanna:you go? I knew well, I knew what our margin should be, and by and large, we were at it consistently the whole way through. So in personal care, you know, you really wanna make, between 50 60% margin. Now you're not gonna make that straight away. You're building up to this.
Joanna:You've gotta get ahead of steam because, of course, your volume will completely determine how big that margin is.
Fiona:Including logistics or just product packaging?
Joanna:That was all product and manufacturing and not logistics.
Fiona:So product packs. Okay. That's fine as long as we know.
Joanna:So we we managed to be within that band fairly quickly. But, of course, you know, with our turnover increasing so dramatically, we were able to get reduction you know, COGS reductions consistently. And I think this is the other thing as well. You know, I talk to a lot of people who are all starting out their journey, and they've got 10 SKUs. So 10 SKUs, which means you're tying up capital for 10 SKUs, which means you're having to get slightly different things to those 10 SKUs.
Joanna:My view is start with 3 to 5. Make sure that your packaging is uniform. Don't put everything in something different. Why did we have clear plastic well, sort of opaque plastic bottles with labels on them? It meant that we could have the same bottle for every product.
Fiona:Yeah.
Joanna:And the only thing I did, which was different and my head of supply chain used to complain the whole time, was we had a different colored lid for different products, which I refused to change. Because when you're washing a child, you're not going to look at the label, but you can see the blue lid
Fiona:or the
Joanna:pink lid or the red lid, and you know what you're doing. What we did do, though, was decrease the size of the lids but keep the color because it was great for identification. Plus, it was stand out on shelf. I mean, the three things for us were word-of-mouth, stand out on shelf, and sampling. You know, you brand in hand, you wanted people to try it, and that was a huge part of our our, our strategy.
Joanna:But the stand out on shelf you know, you saw 14 16 facings in the Isle of Man when you first came across Charles Farm. Well, because it looked really good. People were drawn to it. And the other thing that that that a lot of, newbies don't really understand, and it took me a while to understand, was that supermarkets, in particular, grocers, they are they want to draw women in. They want to draw parents in.
Fiona:Okay.
Joanna:Which is why if you go to Asda, you'll find loads of car seats on discount or nappies on discount as you walk in. They want to bring the parents in. So one of the aisles that they're always gonna go to is baby food and baby toiletries. So think again where parents will shop. You know, where will and by and large, I'm not being sexist, but it will be the mom, will go and do that shop.
Joanna:Where will she be going? Because that's another way to understand which categories,
Fiona:have got That's really interesting. Interest. I wonder what percentage value of all grocery spend is made by moms with kids. I'm gonna find that out.
Joanna:That's a very good question. Actually, somebody told me the other day, the economic spend in the UK in the next couple of years, 65% of it is going to be in the hands of women.
Fiona:Wow. If anyone here is listening from Kantar and you want to drop me a line on LinkedIn answering
Joanna:the
Fiona:question in retail grocery, the, percentage of all value spend in the major grocers by mothers with children, that would be or parents with children, that would be really helpful.
Joanna:Tesco's is the one that would give you that, I think. Tesco's on Boots.
Fiona:If this episode is inspiring you to think about new ways that you can drive growth for your business, don't forget to click follow or subscribe on your favorite podcast app and even leave a review. Your small gesture has a big impact on me and my business and will be truly appreciated. Okay. So I've got loads of questions really quick. So you're growing Yeah.
Fiona:Yeah. Loads. One of the big issues that, or challenges that the people I work with struggle with, and that's, you know, the kind of the 2 to 10,000,000.
Joanna:Yeah.
Fiona:I need to make I need there's only 3 of us at the moment. I need to hire, do I hire somebody really senior who's got experience, or do I hire someone junior? And then I've hired someone senior. Oops. It was the wrong fit, and now I'm screwed.
Fiona:And I've just wasted a whole lot of money. And what's your experience and your advice?
Joanna:Oh my god. It you know, this is the hardest thing. Of anything you're going to do, staff is the hardest thing you will do. And my my lessons learned are get as many people as possible to interview an individual, build according to where you are because someone who'll get you to 5,000,000 might not necessarily get you to 10.
Fiona:Yep.
Joanna:And someone who gets you to 10 might not go necessarily get you to 20.
Fiona:Mhmm.
Joanna:You're looking for robust. You're looking for resilient. You're looking for really quick thinking. You're thinking looking for someone who's got as much passion about your brand as you do. They take it absolutely to heart, but they don't take anything personally.
Joanna:We've all had those people where you said, particularly designers, oh, I don't really like that. And they've gone away in a corner and cried. It's not about you. It's about this isn't you know, have you done it to to the brief? And the chances are if you haven't done it to the brief, I'm not gonna like it because it's not to the brief.
Joanna:I would suggest that it's I I mean, it's a minefield out there. It is an absolute minefield out there. I went for the best I could afford every time. But at the same time, my first hire, Olivia, she came straight out of university. But she worked with horses, so she was didn't give 2 figs about getting up early in the morning, lugging stuff around.
Joanna:She would do everything she was asked to do. And if it didn't make sense, she had enough intellectual curiosity to work out how to do it. And then would say, oh, do you know how to do this? And if I said no, no idea. Oh, okay.
Joanna:I'll find out.
Fiona:But what about that stage where you get to where you are considering a really senior hire, like, say, for example, your first head of your 1st sales director, and you're not sure whether it should just be a senior NAM or whether it should be a director?
Joanna:I would always leave those director roles. They are proven roles. They're not given.
Fiona:Brilliant.
Joanna:That is brilliant. The moment you hire someone into the role of sales director and it's a disaster, you can't get rid of them.
Fiona:Okay. This is great. This is great.
Joanna:So you you always and, again, if you want to incentivize somebody with shares, they've gotta do their time first.
Fiona:Mhmm.
Joanna:Because, actually, doing EMI options is time consuming, and it costs money. So I always said, you've got to have worked here for a year, and you have got delivered on everything that you said that you would. And that made it really, really easy. And then we would you know, it would go to the board. And I say board, it was me and 2 other shareholders.
Joanna:And we would determine whether or not that we wanted to offer them EMI options. But the bar has to be quite high because, you know, you want people who are not gonna be distracted by being offered shares in a business. And as I say, it's expensive. It's an it's an expensive thing to do because you have to do all the log everything with HMRC. But be very conscious of what the rules about hiring people are in this country.
Joanna:Be aware every time you make a hire. Okay. I've got an empty seat on the bus. Is this the best person to fill that seat? If they are not, it's better that seat was left empty.
Joanna:There should always be some tension in a startup anyhow. You shouldn't no one should be sitting around twiddling their thumbs. I mean, Olivia, when she started with me, if she there wasn't anything to do. She'd give the kids a riding lesson. So there was always something for her to do.
Joanna:So, you know, you want that tension. You want everyone to be busy. What you don't want, which is what can happen when you bring too many people in, is people have got too much free time, And then they start, you know, chatting. And they start dropping the ball. And they're just more interested in Love Island than winning at Tesco's.
Joanna:And these things, you know, as a founder, god, they piss you off. They really piss you off.
Fiona:Were you tough?
Joanna:Because you're giving your soul to I was I was a dragon.
Fiona:Were you? And were people scared of you?
Joanna:Oh, god. Terrified. Were they? I mean, yeah. I I had a coach for a while.
Joanna:And she said, you know, people are terrified of you because, a, you make it look as easy as breathing, b, you know, you're not in your first flush of youth, and you've had some huge success in the past. You know, everything from the fact that, you know, I had a few famous friends, All of this used to make people absolutely terrified. Whereas the people that were really good used to laugh at me or roll their eyes at me. Andrew Rayner, he was my head of sales, and he left P&G to come to me. And he left P and G.
Joanna:And this was his motivation. He said, it's really boring.
Fiona:Okay.
Joanna:All we do is sit in meetings, and then we have meetings about the meeting. It's really boring. I want to do stuff. Mhmm. And he came to me.
Joanna:He knows Excel inside out. If you wanted a presentation deck to go to a retailer, he'd have it done in an hour and a half. And it would be knockout. Yeah. And you're looking for those types of people every time.
Joanna:If I said to him, Reina, why haven't you done this? He'd turn around and go, oh, yeah. I know. I forgot. Don't worry.
Joanna:I'll do it in a minute. And he would. He was you you know, your perfect employees stick their hand up when they make a complete cook up and say, take ownership and say, that was me. Sorry. I'll sort it out right now.
Joanna:They take ownership of everything, whether it's good, bad, or indifferent. And they if you say, well, that's crap, they'll turn around and say, oh oh, well, I'll do it again. You know, I unfortunately, I come from the generation where I remember spending 2 days working on something. And I didn't go didn't literally didn't go to sleep, handed it into my boss, and they threw it at me. And they said, this is utter shit.
Joanna:Do it again. Mhmm. And I went, oh, okay. So I went to I didn't cry. I didn't go and tell everyone.
Joanna:I was too embarrassed. I thought, god, I'm sick. And I went and did it. I asked someone, and I said, well, how would you present this differently? And those are the people you're looking for, robust, resilient, and caring.
Fiona:I have a theory. I call them what this and I don't know if you'll agree or not, but I call them alpha followers. So I believe that many really successful founders are quite enigmatic and, you know, these big thinkers and visionary, and they can really see the way. And then if they can put this posse of alpha followers around them who are like they're not necessarily entrepreneurs, but they're intrepreneurs. So they can find new creative ways of doing things and setting up processes that don't feel like processes and leading their own teams, but they are absolutely dedicated to the cause.
Fiona:And they're all kind of in awe of this founder. You know? And I I've seen it time and time again, though, whether it was my time in Gu, my time in Chibani, my time in Strong Roots. You know, you've got this little army of 5 or 6 senior team leaders who will almost die for the cause, are not going anywhere because they love it so much, and they are brilliant people managers and leaders, and, they're great with the trade, and they're great with customers, and they're great with product, and they just get it.
Joanna:Yeah. I was really lucky. And over time, I had Rayna. I had Lou doing my r and d, Becky doing supply chain. We never found someone in marketing.
Joanna:My HR was just stellar. Laura was brilliant. We just had this group of people. We're all very different, our approaches. If you did an insights on all of us, we were all profoundly different.
Fiona:Okay.
Joanna:But it was a really good gel and a mix. And then when we did the sale, I had Will Bola who came on board as the MD for the business to to keep the business going. And because we were going to do private equity, he was then building a team. And, you know, we had they were all intellectually curious. They were all dedicated, everything that you said.
Joanna:And, you know, I remember doing the deal, and I phoned Louise Norman, who was head of r and d, at 3 in the morning. And I said, I'm sorry, Lou, but I need this by 7. She said, no. Yeah. That's fine.
Joanna:Yeah. I'll phone you back in half an hour. Wow. And and, you know, that was exceptional circumstances. But these guys wouldn't think twice about phoning you at a weekend.
Fiona:Now that wouldn't necessarily be acceptable today in today's world, and we could talk about that for a very long time. And I have, you know, I I'm collecting these little books that I keep finding at the tip, which is, when you live on the Isle of Man, that is a thing that you do is you go to the tip. And there's all sorts of antiques and all sorts of wonderful, weird and wonderful things. But recently, I found a free little booklet of jokes from FHM Magazine. Do you remember FHM Magazine?
Joanna:Oh, god. Yes. That must be all that must have been canceled.
Fiona:So well, no. It was it's a little book, and I've kept it. I'm gonna do a LinkedIn post about it. But, basically, I would love a lot of the founders that I work with now to understand that it takes some time for me to get my head around the world that they are creating today. Because when I was growing up in from 1999 in Nestle all the way through, we were told to wear a nice skirt for when Tesco was coming in, make sure that we, we were given lessons on, you know, what to wear.
Fiona:And if we had to wear trousers, they had to be feminine and tailored. And at the same time, FHM, it was perfectly acceptable for them to have a little joke book on big boobs and, you know, what to say to a woman when you had her your pint on her head. I mean, no joke. And then I found another one recently, and it's why women don't why women can't read maps or something else. And it was written by a man and and and my husband.
Fiona:And I just think the world has changed so utterly, and one of the things that is changing is that you can't necessarily ask employees to work in the middle of the night or work weekends. And sometimes, that is what it has taken for companies in the past to succeed in the way they've succeeded, but it wouldn't necessarily work today. And I was wondering how you feel about that.
Joanna:Oh, I think we take life far too seriously. We expect so much for without any investment if I mean, look, I'm 54. I worked in the city. I was known as Posh Totti. Did it bother me?
Joanna:No. Not in the slightest. I got told off because I wore clothes that made me look like I was going to a drinks party. Did I care? No.
Fiona:Mhmm.
Joanna:Because we're so worried now, and I boil most of this down to social media. We're so worried about what we look like, what we wear, how people perceive us. We've lost our ability to be individuals. We we are such a herd now. And if you've got all your mates who are finishing at 5 and clocking off, then you're gonna finish at 5 and clock off with all of your mates.
Joanna:But, you know, there is still now, and I would say my stepchildren are most definitely in this category as are my own children, that people will just work regardless of what those hours and that commitment is because they are conscientious, and they want to do well. Mhmm. The trouble is they are few and far between now. I think I would say to anybody out there, if you really, really, really want to succeed, do what I do. And that would be whenever I was asked to get something by the end of end of the week, I would do it by the end of the day.
Fiona:Yeah. It's great to
Joanna:see. Didn't go to university. I worked I ended up working in the city. I was an executive director of the biggest bank in the world, and I had 2 b's at a level. And how did I do it?
Joanna:By working bloody hard. How did I get paid? You know, massive bonuses? By working bloody hard. And so for me, working hard was just in my DNA.
Joanna:Mhmm. I didn't want to be an also ran. I wanted money. Money was a motivator. Again, hire people that are motivated by money.
Joanna:Hire people that are motivated by recognition for their success. Don't hire people that in their first interview ask whether you do free Pilates yoga. And is it okay if I leave at 2 on a Thursday? Because I like to go to my meditation class.
Fiona:You are hardcore. You know that. I love it.
Joanna:I love it. But, June, I just I just want these people to win. And and look, this whole country is crumbling around us, and everyone is blaming a government. This is not a government. This is our attitude.
Joanna:Since COVID, we need to smile and put our big knickers on and go out. And if we want it, how do you think you know, how does a footballer make it? How does an athlete make it? How does a singer make it? Because they're resilient, and they just get on with it.
Fiona:Yeah. 40000 hours, not 10000 hours anymore. You were talking about and I'm conscious of time, and I really wanna get these questions in about, how you decided to exit. Well, first of all, funding. As you and that was a real Irish, wasn't it?
Fiona:Funding. As you so you have just mentioned big bonuses. Does that mean that you didn't need to worry about cash flow all the way through that you were able to fund it through your big bonuses? Or did you have the same funding worries as everybody else in terms of managing cash flow as you grew?
Joanna:I think I was probably a lot worse than anyone else. Everything was gone. I had a disastrous marriage, and everything all years of accumulation of success and wealth was lost literally overnight.
Fiona:Oh, gosh.
Joanna:And so then I was on my own with 2 small children, and I had enough money to pay the rent for a year. And I spent what free cash I had doing up the office rather than doing anything to the house that we were renting so we could keep the business going. And the day after I moved in, having been turned down 4 days before we were meant to sign in the money transferred by VC, I was had a meeting with a chap called Andrew Leek, who had heard about my need for cash through a distressed angel broker. Oh. There are such things out there, beer and partners, and we met.
Joanna:And even, I love it. Absolutely. I'm in. Look. I did have I did have listings ready to go in Boots and Waitrose, so it wasn't that I was a no hope Nancy.
Joanna:And I think I was kept awake pretty much every night for the next 10 years by cash flow.
Fiona:Oh god. Are you serious?
Joanna:It is it is a killer, and and, you know, I did actually, there was one thing that both Andrew and I did, which was inspired our our we both had the same financial adviser, and he told us about something called, SAS, a self administered pension fund. And having worked in the city for so many years and I'd squirreled away so much into a pension, I was fully invested in my pension. Of course, you can't touch it, but you can. If you have a self administered pension fund, you can lend a business of which you are a director up to 50%. And we actually both Andrew and I did that, and I lent my business half a1000000 out of my pension.
Fiona:Oh, okay.
Joanna:Because I thought, if I'm gonna go down, let's go down in flames.
Fiona:With style.
Joanna:Yeah. Let's just do it. Let's put it all on black. Oh,
Fiona:my gosh.
Joanna:What I did, which is what I did. And it saved us having to do it saved us having to do another round of funding, but it also saved me being diluted. Okay.
Fiona:Because also you couldn't have done that if you didn't believe. You knew. You knew. You knew.
Joanna:Exactly.
Fiona:This is great.
Joanna:And, oh, it's so important. So this they still exist, the self administered pension fund. You know, it it's only worth it if you've got and you can also you can do pretty bit pretty much any business, by investing in yourself as long as you are a director of the business.
Fiona:Wow. That's really interesting. Big nugget out there for all you listeners. I don't think any of us knew that.
Joanna:No.
Fiona:So you got your first round of funding, and then I think you had a second. But let's get to the exit. You decided to exit, and you did it really, really quickly, didn't you? Like, within I
Joanna:think we did. We'd well, we'd we decided in the June of 2021 that we were going to get some private equity investments. We got a investment a a teaser out September, October of that year, and we got an I'm out just after Christmas. We then had bids in early January, and then we went back. Loads of meetings.
Joanna:I mean, literally put a string in my back and pull it. I could me and Will could chat for an hour and a half without drawing breath. And then we did a second round, but final final offers in. We accepted, funny enough, a trade offer to sell, and we did that in 3 weeks because the day we accepted the offer was the day that Putin invaded Ukraine.
Fiona:Jesus.
Joanna:And I just called everyone on a call, and I said, right. We are gonna work night and day because we're up against the clock. And I think about 4 weeks after our transaction went through, the shutters came down, and there was a dry period for about a year when no transactions happened. So we it wasn't luck. It was grit, determination, bloody mindedness, and hard work.
Fiona:And knowing when to call us. Knowing when to call us.
Joanna:Yes. And and and this is the thing. I'm not frightened about calling something. I make a decision. And this is something else I believe very strongly about.
Joanna:To be a successful founder, you need to be able to make a decision. You cannot afford to procrastinate. I think there's too much time is spent on getting the whole team together. Let's hear everyone's views. There are times for that, but there were times where you actually lead by saying, this is what we're going to do.
Joanna:Mhmm. Yeah. And I think too infrequently, that mode is dialed up. And you have to yes. You want everyone to have their 10¢ worth, and you want to get people involved.
Joanna:But the sign of a really good founder is someone who just knows when to say, nope. Not appropriate right now. This is what we're going to do and why. So let's do it.
Fiona:That is brilliant. And and we've had so many, nuggets so far. Before we wrap up, I want to ask you about your new role as chair of the EIS. What's the name of the body?
Joanna:EIS Association.
Fiona:EIS Association. Tell us about this because this is really important for everybody listening.
Joanna:Oh my goodness. I am so thrilled to be able to do this. So EIS SEIS and EIS are absolute lifeblood of investing in SMEs in the UK. And they were created 30 years ago, and have made a profound difference to the ability for small businesses to seek investment. So since they started, 32,000,000,000 has been raised in 56,000 businesses.
Joanna:So this is huge.
Fiona:Mhmm.
Joanna:And as someone who has benefited from SEIS and EIS in the actual three fundraisers I did for Charles Farm, I'm now on the other side of the fence. And I am an angel investor, and I am benefiting as an investor in getting the income tax rebate from being an investor and potentially when my brands exit from having a tax free exit. Wow. So what never ceases to amaze me, and this was me as well, is how few people know about EIS and SEIS. I didn't know about it until I met Andrew Leek.
Joanna:I had no idea you couldn't invest in a business under this this circumstance, and, also, it's meant for me as an investor that I can maximize my investment portfolio. And I'm heavily geared towards small businesses. Of course, I I, I love them, and I am totally invested in female founders. But it is something you can you can sign up as a member, as an entrepreneur for a £100 a year, and this gives you access to everything you could possibly need. So new legislation coming through, advice, user groups, work throughs.
Joanna:It is utterly fantastic. I would say it is a no brainer if you're a small business and at some stage you're going to want to raise external money. Sign up for this because this is like finger on the pulse stuff. You will really understand what's going on.
Fiona:So a lot of my community out there is, is using this, but there's and I don't know exactly what it is. But wasn't there some change recently that said, oh, yeah. There's a change in the legislation, which means I'm no longer able to be this. Or that was there, like, a movement of the amount that you're allowed to ask for?
Joanna:There were there were 2 things that happened. 1 was that the amount that as an investor, that you could not how much you could not how much you could invest, but how much your net worth would have to be before you could invest. And this made it prohibitively difficult for women to become investors Okay. In EIS and SEIS. And thankfully, my dear friend, Emma Sinclair, spat the dummy on this one, and it was reversed.
Joanna:Oh, god. Okay. That's good news. Stays the same. The other interesting thing, though, is and, again, if you're a member of the EISA EISA, so the EIS Association, you have a voice for this, is that every 10 years, this has to be renewed.
Joanna:And the government renewed this legislation earlier this year. It expires in April 2025. But because of Northern Ireland and the Windsor framework, it has not been ratified by the EU. And so as soon as this election is over, I am going to be kicking and screaming about this and that we have to ignore the EU on EIS because the I EU thinks that this is state aid. It's insane.
Joanna:So we're saying, I don't care what the EU says. This has to be pushed through, and this ad has to be part of what the Treasury is offering. I also, in my tenure, I want to be sure that we know the split between men and women, different gender, as well as race. I want to see where the bias is and where we need to help those people that are simply not either aware of this funding or receiving enough of it. I've only got 4 years, but my god, I certainly intend on kicking ass.
Fiona:Well, listen. I cannot wait to see what ass you kick because I know you will. It has been absolutely brilliant to talk to you today, and I think we've got a humongous amount of 500 k moments out of that, people. Thank you so much, Joanna. Thank you so much for joining us and giving us all of your energy and passion and wisdom.
Fiona:It's been an absolute joy.
Joanna:Oh, thank you for having me. I just love talking about this stuff.
Fiona:And it shows, and we love listening. So thank you so much.
Joanna:Oh, bless you.
Fiona:Thank you so much for listening. I hope you got as much out of the conversation with Joanna as I did. So what stood out for me is the biggest 500 k moment today? It was her absolute belief and knowledge that what she was offering to shoppers, but also trade customers, was completely distinct and unique and answering a need that wasn't been solved currently by the category. What am I gonna ask anyone I'm working with is how do we all get to that place where we're clear that the solution that we're offering is one that doesn't exist out there.
Fiona:That way, I believe we can go into any negotiation, whether it's with a buyer, whether it's with an investor, and feel just as confident as Joanna does. Thanks again, and don't forget to subscribe and keep an eye out for the next episode where I'll be talking to another successful founder of a challenger brand. Who will share more valuable insights into driving growth. See you then. As always, thanks again to my tech guru and sound engineer, Gip again of Balagroove and my podcast producer, Catherine of Social Cues.