It is an obvious observation that the long-term impact of COVID-19 will be felt far and wide, long after the dust has settled on the periods of lockdown and social isolation. Whilst normality will return, there will no doubt be some aspects of our behaviour that are permanently changed by the experiences of these past months, particularly where digital technologies have provided solutions to the significant disruption; fledgling technologies have been thrust into the mainstream and given market exposure that would have previously seemed impossible, and positive consumer experiences throughout this period will lay the foundation for exponential growth late in 2020 and beyond.
A recent survey conducted by the Royal Society of Arts found that only 9% of Britons want life to return to ‘normal’ post-COVID19, suggesting there is real appetite for societal change. In light of this, the following sectors (no doubt amongst others) will likely see significant opportunity driven by our recent experiences, and the resulting changes in consumer behaviour.
The closing of the UK’s schools and universities in mid-March, as part of a broader global practice, have left millions of children, teenagers and students facing the prospect of months of home education, overseen by their parents or their own self discipline.
This shutdown has ignited a fire under the Edtech sector, whose technologies have gone from luxury to necessity, providing the tools to ensure learning can continue effectively, and students (and parents) remained engaged with their education. Players have been afforded a unique opportunity to showcase their products across a wide audience, and success here could cause permanent, positive disruption to the sector as whole.
Solutions exist across the entire supply chain, with examples including Teacher Enablement and Content Delivery tools, Learning Management Systems, Parent Engagement solutions, as well as AI-assisted and AR/VR learning platforms. Many commentators believe it is only a matter of time before online education becomes the norm, and our recent experiences will only accelerate this eventuality.
This is not a mature sector, however, with many of the technologies still under development. As such, many players are using the opportunity to offer their products on a free trial basis, however positive outcomes here will no doubt see Edtech establish itself as a boom sector in 2021 and beyond.
Ones to watch; Third Space Learning, BibliU, MarcoPolo Learning, Sparx, Tutorful
Remote Working Technologies
With working from home being the ‘normal’ for the majority of the workforce for the foreseeable future, it is likely that our experiences now will alter our perceptions of this practice, and what can be achieved when working remotely.
Prior to COVID-19, it is estimated that only 5% of the UK’s working population regularly worked from home, meaning huge numbers are now experiencing this practice for the first time. As workers become more comfortable with this arrangement, it is likely that large numbers will expect greater flexibility to work remotely once normality returns, and employers will need to be sympathetic to these expectations. Outdated attitudes here could be potentially harmful to company morale and productivity, so this shift in mindset will be important for companies to consider.
Digital Collaboration Tools are not new; geographically dispersed businesses have used these technologies for years, and in 2019 the market was estimated to be worth over $30 bn. Technologies such as video conferencing, project management, analytics and file sharing tools, enterprise social networks and employee portal platforms are already mature, however demand is set to grow exponentially as more widespread remote working practices are adopted, giving start-up players ripe opportunity to challenge the established providers.
Additionally, with this sudden growth, new opportunities will arise as the ecosystem expands; for example, as more and more employees work from home, solutions to foster company culture and employee retention, promote employee socialisation, and support employee mental health and combat loneliness will become critical to company success.
Ones to watch; LoopUp, Huddle, Starleaf, Cognisess, Unmind, Hive HR
Another human behaviour that looks set to alter significantly following our experiences with COVID-19 concerns our approach to fitness, with millions of gym-goers forced to consider other approaches to exercise after the doors shut in early March.
Fitness Technology has been gathering momentum in recent years, showcased by Google’s $2bn acquisition of FitBit in January this year, and Peloton’s $1.1bn IPO in 2019, however as consumers look for new ways to keep exercise varied and interesting whilst in lockdown, digital solutions supporting home exercise have a better market opportunity than ever before.
Apps offering training guidance, exercise programmes and tracking, socialisation and gamification have seen significant uptake, and positive consumer experiences here combined with a different attitude to enclosed public spaces may drastically alter how we approach exercise once normality returns. This is a particularly fragmented market at present, so opportunities will be extensive should our approaches indeed change significantly.
Ones to watch; Freeletics, Aaptiv, 8fit, Virtuagym, WatchFit
Whilst this is not an exhaustive list of sectors, and there will of course be other technology markets that are presented with significant opportunities due to experiences of COVID-19 and the subsequent lockdowns (e-commerce, healthtech, cleantech for example) these will be the areas that I will be keeping a keen eye on, and I’m intrigued to see how these develop in the coming months.
Prior to lockdown, mental health technology start-ups had been gathering exciting momentum, with global investment rising from £120m in 2014 to over £580m in 2019. Clearly the investment community recognises the huge importance of mental health, and the part technology has to play in ensuring our society is able to deal with the pressures of modern life, and rightly so.
Such technologies are now needed more than ever, with the impact of COVID19 likely to have significant long-term implications for individuals’ mental health; our post-COVID19 world will only exasperate existing concerns, and create new worries along the way. With increased professional isolation driven by an uplift in working from home practices, social isolation caused by restrictions on socialisation and leisure activities, heightened fears around personal health, family welfare, job security, the economy and ‘the future’ in general, the need for robust, readily available mental health support looks set to increase sharply in the coming months.
Even before the pandemic, the Mental Health Foundation estimated that there would be over 2 million people suffering from mental health problems by 2030 in the UK alone. With this in mind, the following are some of the UK companies I’ll be watching, as they look to keep people happy, healthy, and thriving as we adjust to the new normal;
Founded in London in 2016, Unmind is developing a digital wellbeing platform for workplaces, which is often a key trigger for mental health issues. Their technology allows employees to proactively measure and manage their mental health through scientifically-backed assessments, tools, training, and signposting, and is trusted by a number of renowned businesses, including British Airways, John Lewis, and Just Eat. The company has raised over £12m to date, and now employs over 50 people. With workplace challenges only set to increase in the coming months, with concerns around job insecurity, trading conditions, and isolation due to increased working from home all adding to employee’s day-to-day worries, their technology is well placed to help businesses support their staff through unprecedented times and beyond.
Spill are a London-based technology company developing a message-based therapy app focused on making mental health support more accessible, allowing its users to engage remotely with an appointed qualified therapist whenever they need to talk. Available to businesses as a tool to support their employees, Spill are also able to provide tracking and insights relating to the impact of mental health aspects of performance and attendance. Founded in 2017 and still at Seed stage, they are already working with companies such as Rightmove, Monzo and WhiteHat.
Ieso Digital Health
Cambridge-based Ieso Digital Health specialise in delivering online, evidence-based psychological therapy through their proprietary, AI-enabled platform, which connects patients with qualified therapists and allows for this therapy to be provided in written form (with typed conversation shown to remove the pressure of having a face-to-face conversation, whilst delivering effective outcomes). Furthermore, their technology is available to individuals through the NHS, rather than as an employee benefit, meaning anyone can access it. With the ubiquitous nature of mental health issues, this universal accessibility is an important differentiator compared to some of the companies in this space, and having already raised nearly £30m in funding, this awarding-winning business looks set to remain an important player in this market for the foreseeable future.
Also based in Cambridge, Psyomics are a seed-stage mental health company spun out of the University of Cambridge, who combine both digital and biological technologies to provide tools for faster diagnosis and prevention of mental health challenges in both workplace and clinical settings. Delivering effective treatment is often a major challenge for healthcare providers, not least because successful diagnosis can be a difficult and lengthy process; Psyomics’ technology seeks to remedy this by utilising both digital approaches and the latest developments in biomarker technology to allow for increased diagnostic accuracy and more personalised care recommendations, to enable faster recovery.
Hello Tomo is a London-based start-up founded in 2016, which look to combine the best aspects of social media with proven therapeutics techniques to help individuals work through mental health issues. Based on Behavioural Activation, a core element of Cognitive Behavioural Therapies used by psychiatrists, their app allows individuals to access an online peer-support network, and provides scheduled daily habits proven to support mental wellbeing. Once the individual completes their scheduled task, the app prompts them to upload a photo as a reminder of their progress, which is then shared anonymously with a small group of people, to celebrate the progress with others and motivate everyone to achieve their goals.
We are now working in unprecedented times. Executive Leadership hiring will continue in any economy, however with a prolonged period of self-isolation and working from home, businesses are faced with a unique challenge; how do you hire with confidence when opportunities to meet are so severely restricted?
A typical executive search process involves numerous in-depth face-to-face meetings with key stakeholders across a business, yet with social isolation now the norm, such a process has become impossible. Yet many senior hires remain business-critical, so hiring committees must now utilise alternative means to qualify and assess leadership.
At Bailey Fisher, we’ve used remote interviewing with increasing regularity over recent years. Below are the key practices that we integrate into our processes to ensure a thorough assessment and a great candidate experience.
Process Planning & Clear Candidate Management and Communication
These are also unprecedented times for candidates, who are likely about to embark on an assessment process unlike anything they’ve experienced before. Each stage of the assessment should be carefully planned and agreed across all stakeholders, and communicated to candidates in full as early as possible; candidates must know what to expect and what each step aims to achieve. Candidate experience is always crucially important, and even more so in this environment, so a clear, considered, professional process will inspire huge confidence in your business.
Use of Technology
Embrace technology at every step; you’ll be using video conferencing already, options are free, high quality and easy to use, and have supplemented interview processes for several years. Today’s technologies allow for multiple invitees, screen sharing, and anytime-access from phones and tablets, meaning board presentations and multi-person interviews from anywhere in the world are all possible. Supplementary assessment methods (discussed below) are generally delivered online and can provide valuable insight into character and ambition.
Whilst a formal F2F meeting may be preferred at closing stages, our experience suggests all other interview stages can be successfully managed remotely; when combined with appropriate candidate management, you may be surprised at how well you can assess a candidate’s suitability without meeting them in person.
Extensive 360 Referencing
Deep referencing has always been a cornerstone of good executive search practice, and is more important than ever in the current situation. Think strategically about referees, and pick several targeted individuals to address specific requirements, from operational capability, to strategic vision, to cultural fit. Timing may be sensitive, so this will need to be managed closely with the candidate to ensure discretion, however you can quickly build up a complete picture of an individual’s suitability if handled appropriately, and this will often instil confidence over and above the interview process itself.
Supplementary Assessment Methods
In our experience, supplementary psychometric assessment methods can be divisive; whilst some hiring committees consider such testing as extremely valuable, others view these methods with scepticism. What is clear, however, is that such testing can provide important insight and food for thought to guide your interview focus and support your decision making. Tests are easy to deliver, and have been proven as reliable indicators of future performance and cultural fit; as such, they are a valuable tool in the current environment. The range of tests available is diverse, however, so be clear in your goal, do your own research, and choose a testing method accordingly.
We are living in strange times, and whilst the current environment is not ideal, there are straightforward, easy to execute practices that will ensure leadership hiring is able to continue despite COVID-19. With the right planning, forethought and discipline, it is possible to remotely work through all but the very final stages of a candidate assessment process, and be confident that when the time for a closing F2F meeting does arrive, such a meeting is very much a formality. In some cases, you may even find you’re able to hire without any F2F meeting at all.
In business as in nature, those who thrive are not the strongest, but those most adaptable to change. Integrating these practices into your senior hiring processes will ensure you’re able to keep momentum, and hire quickly and confidently when the time comes.
This article is by James Houlder, Director of Research & Operations
In collaboration with Silicon Valley Bank and Penningtons Manches Cooper, Bailey Fisher hosted discussion focusing on the potential challenges and opportunities of scaling a growing healthcare business in the US. We were joined by Nigel Pitchford, Kym Denny and Paul Kinnon, who generously shared their hard-won experience as our expert speakers. Key considerations from the discussion are summarised below:
Ensure you really understand commercialised healthcare
The US healthcare market is vastly different to that of the UK. It’s an obvious point, but it’s crucially important to understand how this system works, as it is not necessarily intuitive. The differences are numerous, however perhaps most important is an understanding of the payer model, and therefore who exerts the real influence when driving new technologies into practice; unlike the UK, healthcare in the US is ultimately paid for by employers and insurers, and it is therefore these parties who exert this influence, over and above the doctors and medical specialists themselves.
Strongly consider US VC involvement, but be realistic about what they can bring
In addition to the obvious differences between the US and UK healthcare markets, there are a host of more subtle nuances to be navigated as you grow. It is worth seeking investment from US VCs who have a more inherent understanding of the market and local knowledge networks, in addition to any US headcount you may choose to employ. British VCs will support this strategy, as the advantages are many and obvious, though ensure you remain realistic in your expectations; you will likely be entering unchartered territory with new technologies, and even local experts will be learning as they go. Be prepared to pivot, and adapt your strategy as appropriate.
Be ambitious, believe in the opportunity, and don’t be afraid of failure
An oft-quoted difference between US and UK VC funding is the sheer size of investment rounds. Whereas the UK mindset is more cautious, with local market opportunity restricted by the NHS’ own modest budgets, the nature of the US healthcare market means the commercial opportunities are huge, and US VCs therefore expect significant exit values, and early investment rounds to be aligned to this potential. US VCs expect to see boundless ambition, unwavering self-belief, and commitment to a US strategy, in addition to a clear commercial proposition. This ambition relates to both investment requirements and growth plans, so be bold in your attitudes.
Understand your value proposition, and communicate this early across all stakeholders
US VCs will be expecting significant exit potential if they are to fund your plans to expand, and as such their key interest will be your commercial plan and value proposition, rather than the science underpinning your product. However, the importance of this value proposition (essentially why customers will choose your product or service over others) extends beyond securing funding; the message needs to be clear and understood by all stakeholders (investors, payers, end-users, KOLs, patients, employees) as early as possible, and will require constant review and fine-tuning. This commercial value must sit at the heart of your strategy, and be understood across your organisation, as it is ultimately what will define your growth and success.
Know the key opinion leaders in your space, build relationship with them, and leverage them
Identifying and engaging with the US-based key opinion leaders in your space will be crucial to your company’s success, beyond simply providing guidance around market and product strategy; they are an additional guide through the intricacies of the US healthcare system, and are often the lynchpins linking the various relevant facets of your market; from payers (employers/insurers) to doctors to regulators and beyond, their influence will play a key part in your growth and success, so these relationships have to be a priority.
When the timing is right, consider relocating
Whilst a small local workforce is an important first step in growing your company in the US, the sheer size of commercial opportunity means that this may well become your most important market, and a time will likely come when it is worth considering relocating your company HQ stateside. Whilst smaller enterprises can be managed successfully from any location, a business that is scaling in such a key location will soon require more immediate and frequent access to a host of local resources, and positioning decision-making nearby is an obvious benefit; with rich technical, commercial and management talent pools, world leading technical authorities and knowledge networks, experienced and diverse investors, and significantly greater commercial opportunity, the advantages of a US-based HQ are numerous. The trick, however, is knowing the right moment to make the move!
Bailey Fisher hosted local business owners from across the East Anglian region to discuss the importance of employee engagement and retention as a crucial part of a company’s hiring strategy.
Inevitably, what constitutes employee engagement differs from business to business, and around the table it was apparent that investment was being made into a variety of objectives to offer a better employment experience. Training and development was a consistent theme, as was the opportunity to participate in charitable endeavour; clear and consistent leadership, direction and a sense of worth.
Business owners can of course benefit hugely from a happy and motivated workforce. Research shows that 39% of employees work harder if they are happy, and highly engaged employees are 87% less likely to leave than their less engaged counterparts. A challenge for the future appears to be understanding how to motivate current and future generations of workers where salary is already being seen as insufficient in itself to attract and retain talent. Workplace culture assumes greater importance, as does more frequent questioning of a business’s carbon footprint, its approach to flexible working and uptake of disruptive technologies. There is already a greater understanding and acceptance that people will change roles and careers more regularly, and this makes the case for having a strong sense of engagement and retention policies ever more important.
Our thanks go to Ian White, CEO of Beckett Investment Management, for initiating discussion, and to our event partners Peter Gale and Ellie Newell of C. Hoare & Co and Richard Lane of Farrer & Co.
Discussion took place at the Private Markets Dinner, part of Bailey Fisher’s Leadership Series.
With our focus on supporting earlier stage, high growth companies, we often discuss senior hiring plans with first-time executives, for whom a Retained Search is a new and perhaps unknown process. This is often weighed against other, more immediate options, which can appear more attractive from both a cost and a timescale perspective.
So why choose a Retained Search process over other options?
The key benefits are numerous, however the following points stand out:
- Specific Targeting – a business’ product, market and proposed strategy often mean a very specific blend of skills and experience is required in an Executive’s background, and it is likely the candidate pool is both geographically dispersed and somewhat limited. In addition to helping define and better understand your role’s requirements, a retained search process will employ dedicated research resources to analyse hiring markets in depth, and ensure all relevant talent is identified, targeted and considered. Whilst this seems obvious, this is not always appreciated when comparing against other approaches.
- Candidate Visibility and Availability – a common theme among high-performing Executives is that they are usually well employed in stimulating, exciting and well-rewarded positions, at the forefront of their markets, where they are both professionally and emotionally invested in the business’ future plans. It is therefore not surprising that A-Grade Executives are rarely actively seeking new opportunities. That said, with relevant opportunities for progression often infrequent, one finds these Executives may be open to discussing something really special, if approached appropriately by a trusted contact. An experienced Search consultant will be able to leverage trusted networks built over many years to ensure these passive candidates are approached discreetly and briefed accordingly.
- Expert Consultation Throughout – hiring Senior Executives is not easy, and people are a highly unpredictable commodity; whether it be candidate identification, engagement, assessment or the eventual negotiation, there will always be unforeseen, and often significant, challenges through a recruitment process, and Executives on both sides of the Boardroom Table rightfully expect a professional, knowledgeable and trustworthy Consultant to navigate them through these difficulties. Often, it is the steady hand of the Consultant which ensures a successful outcome, and is a key part of the value-add that a Retained Search process offers.
Whilst there are many further, more subtle benefits to using a Retained Search process, we find that these are the key differentiators, and their value cannot be overstated. The right executive can often be the difference between business success and stagnation, whilst the wrong executive may cause significant and lasting damage. Indeed, the cost of making the wrong hire often far outweighs the cost of the Retained Search process, and as such it is right to consider the approach as an important investment in the future success of a company.
We were pleased to partner with UBS Wealth Management to present a Global Economic Update by Paul Donovan, Global Wealth Management Chief Economist for UBS.
One of the first challenges in trying to understand the economy today is that the quality of economic data is not what it was. Most economic data was designed in the 1930s. The way economic data views the world is not well suited to the changes that are happening today. Patterns of employment are changing. The rise of self-employment, home working, and having multiple jobs confuses data. The difference between investment spending and consumer spending has become blurred. GDP measured a manufacturing based economy very well – it was, after all, designed to help maximise wartime production. It is becoming less and less useful, however, in a more service sector based economy.
The result is that we have to be careful in being too precise about economies. The broad trends are probably correct, but the details are almost certainly not. There are, nonetheless, trends that we see emerging today. The trend of ever more trade taxes from the United States has upset the global trade system. Trade taxes hurt listed companies more than they hurt the wider economy, because the overwhelming majority of global trade is conducted inside companies (moving goods from subsidiary to subsidiary).
Trade taxes are also more damaging to investment than to the consumer. This is because investment goods form a disproportionately large part of global trade. Trade taxes are thus a disproportionate tax on investment. It is also because the uncertainty around global supply chains seems to be causing companies to rethink their investment plans. So far, this has not really been noticed by the consumer. The investment slowdown is causing a global economic slowdown. Only if this spills over into labour markets and the consumer would a recession be threatened.
More on these and other topics can be found at ubs.com/pauldonovan – where you can also sign up for the daily podcast covering the key economic issues.
Paul Donovan spoke at Bailey Fisher’s Leadership Series event in partnership with UBS Wealth Management. The event was attended by CFOs from UK-based growth technology businesses.
It was clear from the evening’s discussion that there are concerns surrounding the availability of liquidity. The opportunity to use AIM no longer seems to be a viable option for the UK’s early stage tech sector. Perhaps the sweet spot for entry has changed to reflect a slightly more mature business type.
Private Equity continues to provide an alternative route for those with profitable growth, but it is the Series A to C companies that see the greatest challenge in securing funding to accelerate. There is a lot of money available but not from the traditional sources. You need to look far and wide and at what price?
As an interesting anecdote, views as to the role of a Founder / CEO post-investment differ widely. For the majority, the strength of the team continues to be one of the key factors in deciding on investment. For others, however, there seemed to be little patience for those who fail to meet the demands of new investors and are unable to drive growth as quickly as expected. Thanks to our co-hosts Silicon Valley Bank & Taylor Vinters and our guests for sharing their experiences and insight.
We are delighted that Martin Frost will be joining us as guest speaker for our next Technology Leadership Dinner.
Martin is CEO of pioneering medical robotics business, CMR Surgical, the latest Cambridge company to achieve unicorn status following a recent $240m Series C round. The Series C funding is Europe’s largest private financing round to date for a medical technology business, and will fund CMR Surgical’s continued global commercial scale up.
Martin will join us in Cambridge on 12 November to share his insights into leading a business through rapid global expansion. The dinner is the latest in Bailey Fisher’s Leadership Series of events for business leaders of growth technology businesses. This event is hosted in partnership with Mills & Reeve and Grant Thornton, and will be attended by CEOs and other C-suite leaders from the Cambridge cluster and wider UK technology sector.
Rodney Appiah, Director of Foresight Group shared an investor’s perspective over dinner with leaders of privately owned companies. Rodney gave an insightful, candid view of what private equity investors look for in a business and, post-investment, what the relationship between the company and its new investors might look like.
Rodney talked about the importance of building long-term shareholder value; the benefits of a strong, motivated senior leadership team and offering something to your customer that is both different, and defensible. He quoted Simon Sinek, author of Start with Why: How Great Leaders Inspire Everyone to Take Action, “People don’t buy what you do, they buy why you do it…”
There was much discussion around exit options, with trade sale, MBO/MBI and equity release enjoying plenty of airtime, and inviting debate from various guests as to which route was more appropriate in their situation. Rodney talked through various case studies post-investment, leading to exchange of views on how to ensure that investor and shareholders remain aligned, the right talent is used to supplement and support existing management, relationships are managed and exit strategies are fully understood.
The dinner was hosted by Andrew Moore, Managing Director of Bailey Fisher, in association with Farrer & Co and PwC. The dinner took place at Downing College, Cambridge as part of Bailey Fisher’s Leadership Series. Attendees included business owners and leaders from Aspall, Plextek, Go Ape, Amina Technologies, Howard Group, Pinkster Gin, Sydney Hart, Wren Investment Office and Hoare & Co amongst others.