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The London South East, Investing Matters Podcast - Episode 3 featuring award winning tech innovator Elizabeth Gooch MBE

LSE 00:01

You are listening to Investing Matters brought to you in association with London South East. This is the show that provides informative educational and entertaining content from the world of investing. We do not give advice, so please do your own research.

Peter Higgins 00:18

Hello, and welcome to the new London South East podcast. This is the new Investing Matters Podcast with me, Peter Higgins. And today I have the great privilege of speaking with Elizabeth Gooch MBE, the award winning, innovative entrepreneur, businesswoman. And tech, someone say, maybe, but she's won lots of awards, and she's here with me today is very busy with lots and lots of other jobs. So we're quite blessed to have her with us today. How are you doing, Elizabeth?

Elizabeth Gooch MBE 00:50

I'm great. Thank you, Peter. It's really good to see you too.

Peter Higgins 00:53

Great. We're going to talk about some of your awards later. I want to start somewhere where most people haven't been before with you in an interview. So I like to be provocative as you know. But Elizabeth, I want to start with Patsy Fagan, and the ambitious Elizabeth that molded herself and her grandmother. Please, can you tell me about both of those individuals, please?

Elizabeth Gooch MBE 01:14

How did you find out about Patsy Fagan?

Peter Higgins 01:17

I’m a researcher mate, go ahead.

Elizabeth Gooch MBE 01:18

Patsy Fagan was my imaginary friend when I was a child. And I used to go to my grandmother's garden and have very long discussions with Patsy Fagan. I can't tell you what about I don't even know where the name came up what it was. He was a good friend. Let's just say that. I think I said he's not she got he was a good friend.

Peter Higgins 01:38

Absolutely. Yeah he was a he Okay. And your grandmother?

Elizabeth Gooch MBE 01:42

My grandmother was an amazing lady. She wasn't an entrepreneur, but she was the main breadwinner in the family. And my grandfather was deaf, actually. So I remember my grandfather is a very silent person we didn’t have aids for hearing weren't great back then. And he also used to switch his hearing aid off so we didn't have to listen to my grandmother so he spent a lot of time with his own thoughts in his own head totally ignoring my grandmother who was rabbiting on in the background, which she had the first car in the village had the first TV, she was always very first first first. And I don't think it was competitive.

It's just that she wanted these innovations in her life. And she went out and got them. So I was pretty much Granny reared and took inspiration from her really. So it was in her garden that I was actually chatting to Patsy Fagon, God knows why she was told me there was some garden that wants to meet me, or something like that, you wouldn't do that nowadays, which is very dangerous.

That means someone at the garden would go and not doing that. But in those days, we didn't care. We spent a lot of time playing outdoors. And I just didn't remember my father used to say to other children don't pay for your own end, which obviously you wouldn't say that even which because that has other connotations. But other people's ends was actually something that you did a lot of and creative play and all of that sort of stuff.

Peter Higgins 03:01

Yeah, that's a very Midlands term, isn't it play at your own ends. I want to move it forward. Now with your upbringing and touching on school education and first job and your thoughts then and not really getting any satisfaction of doing something really good when you were younger and thinking, You know what, sod this I'm off.

Elizabeth Gooch MBE 03:18

I think I've sodded off a few times. I didn't want to say that word. So I was actually very studious for many years, Grade A, GCS,E GCES, or whatever they were called. Yes, lots of them. took extra GCES because I wanted to do this that and the other. And I just I don't know what it was the same thing about me, I just became very rebellious. Anyway, I ended up telling the headmaster to f off and asked to go and play it someone else’s ends basically.

In other words, please go you're not welcome here. So I did. And my father was absolutely furious,because he got visions of maybe being a vet or a doctor or a lawyer or whatever. And all of these things he wanted me to do, which basically meant years and years and years of more study. And I just wanted to earn money. And I'm not sure why didn't come from a particularly wealthy background. And I was probably I guess it was my grandmother, you know, that working spirit was in me from my grandmother's inputs. So I wanted to go to work.

So he said, What if you're not going to go to university, you've got to go and get a job. So I got a job in a factory. And I absolutely adored it. And there I learned about production management, people in white coats actually manage the production line and wear white coats then, rather than people who are actually doing the actual stuff on the line.

But I learned about that. It's a very strong influence in my life, actually, my younger years and then I did sort of sod off and go, I'm going to do my own thing. But at that point, it was like look, if you're, if you're not going to university you've got to get a proper job, no daughter of mine is going to work in a factory. You need to get a job in a proper business, like financial services, but we all know what happened to Financial Services, don’t we?

Which the world turned upside down, and manufacturing became much more respectable. So I applied for jobs in financial services and also utilities. And I've blagged my way onto Midland bank graduate trainee scheme, and I say, blagged, but actually, it was helped greatly by the fact that the word undergraduates at that time, and so I got a position there.

But after six months, I was like, I don't want to do this. I'm bored. And I've spent six months going department to department watching work as a trainee and thinking, Oh, God, I can't stand this anymore. And I just said, I'm going to leave and they were like, no one leaves the Midland Bank trainee scheme, would you like to try this department over here?

And actually, what that department was, was the office version of work study, being rolled out across the bank working with Coopers & Lybrand to actually do it. And I went into that department, and I absolutely loved it. But I was asked to go and improve performance in these departments. And I go into these departments. You just imagine this the comptometer operators right now, these are big ladies who (does sound effects of the comptometer) all day long. And I don’t know why I thought they was big, but it just always seemed like very fit ladies, because this big handle that they had to pull in order to get it to work.

And you go in there and you tell them you're not working hard enough you're in a 75%, productive age 23 at this point. And basically being told excuse me, would you like to go run and jump and go play up your own ends?

Elizabeth Gooch MBE 06:37

Anyway, I happen to be doing this in one of these departments where they've got a real problem with backlogs of work, massive explosion in credit applications, and they just couldn't cope. And the girls will be stressed, and they were crying, and I just went, I know to solve this problem. And we laid it all out as desks in a line with a paper going down. Because a lot of paper, obviously, those days, all the paper go down the line and where there was a problem that we put extra staff in, we've got Lotus Notes things in because obviously spreadsheets Microsoft didn't exist, then that old and we cleared the backlogs and everybody stopped crying.

And he was like this is great, can you do it here can do it here can do it here. And I realized actually, that what I've done is bring production management into the office. So I kept applying for jobs, to become a manager of some of these departments that are sorted out and kept getting told you can be an assistant.

And I sort of I don't want to be anybody's assistant, you know, on the on the main, the main woman say I want to do my own show. So I left and started a business to implement production management in the office and improve performance in financial services throughout the world.

How audacious was that? Age 26. So that's how actually getting started with my first business actually developed an interesting thing was that I always wanted to have my own business, but I was scratching around waiting for the lightbulb moment to come and the lightbulb moment never came. But the need for a solution came through working with customers.

And that's something that I've carried through into my third career, which actually are now and helping startups to achieve that mythical 1 million of annual recurring revenue. What's the what's the secret sauce to actually doing that? So that's how I got started in business. Peter.

Peter Higgins 08:26

I love that story. And I love the fact you just decided to just go out on your own, because we're now in and around what 1988? Yeah, where EG Consulting, as it was called then started, just explained to me this this innovation that you saw, and what you want you to see regarding efficiencies, because this is why we're going through now with lots of other companies. And the need to do even more so whether it be for ESG reasons or for climate change reasons or, you know, fuel and CAPEX reasons. So what were you seeing that early, that was just wastage?

Elizabeth Gooch MBE 08:57

Everywhere was wastage and the interesting thing was financial services companies that I worked in used to say, we are people businesses, whilst at the same time never training their people in what to do, they would hire people bring them in and just shove them into teams and expect them to organically work out what needed to be done.

There was no definition of process. There was no production thinking in these back office areas, actually wasn't even call centers there back that it started to emerge about 1985, where you got to split out of telephone on paper. So it's all of this modular stuff that needed to be organized so that it could be worked efficiently.

And you know, that was just utter chaos, really how work actually happened. And generally what I would observe is that work happened when the customer chased. So people go, oh, God, yeah, I've got to go and do that, you know, this idea of an end to end SLA and service just didn't exist back then.

So because it's seen the results that this Production Management could actually do and there was starting to be interest in world class manufacturing in the service sector service sector starting to go hang on a bit, what's manufacturing doing over there?

I basically piggybacked on that message and went out and sold the concept of implementing production management in the office. So I've got a very glossy brochure produced, and I did mailshots and cold calling and I got on the train to London, I knocked on the doors, our financial services organization and the business literally, the only sales training ever had was ever was double glazing, knocking on doors, great training in rejection, got to say that and the door slammed in your face and you wouldn't do that career now easier is to go knocking on doors at night on a stranger's door.

And that's basically what I did went down to London to financial services institution and nagged people and secretaries until I got a in front of people to say, you know, this is what I can do for you.

And the messages about I can improve productivity by 20% resonated, people were obviously looking to cut cost back then service was spelt c-o-s-t in this sector. And the visionary customers that it attracted.

These are people who were interested in manufacturing, production management. They're interested in deming and quality and these sorts of things. Those visionary people were the ones that I have meetings with who said yeah, okay, let's go.

And the first customer was why would I buy from you and not from X, Y, Z, and quick as a flash of god knows why I did it and said because I will guarantee to deliver you 25% cost benefit. And then out to work like stink to make it work.

I'll tell you what to listen like you don't get paid unless you deliver to focus the mind to work out how to deliver enough to three clients are suddenly realized I'm sick to death of doing a spreadsheet for each one, so knocked up a piece of software.

Not me personally, because I don't do that. But one of the guys that I brought him to work with me not to do on a Sunday on a laptop. And away we went with our first iteration of a software product, which I think nowadays you might call an MVP.

We called it full blown product. We were installing it in customers and charging them for it. But yeah, it was given away for free or what maintenance to start with. And it was only when Clerical Medical called me big life and pensions business, big brand in Bristol to say can you go meet the IT director and our total dressing down because the software, the networks, and its support the network time and obviously, the networking, so we had to rebuild the software, and they actually funded back development. So they're became the first software product that we responded by client fees.

And we never raised any money to build the product to them out of using profit and working capital generated from client fees to actually build it. So that's how it happened.

Peter Higgins 13:01

That's pretty amazing then because essentially, it was Clerical Medical that actually, you know, your startup.

Elizabeth Gooch MBE 13:09

Yeah, I had some amazing customers and various anniversaries, 10-25 year anniversaries, those customers still came along, even though some had retired, you know, I still have Christmas cards with them even now.

And I would say our software became fantastic software that it was largely because of the client input that we had. We took a concept to them. And here's what we think your problem is, here's a solution, we believe can really add value and then go yes, what can it do this, this, this, this this. And over time, we ended up with this amazing platform that could do virtually anything that any customer in the service sector needed, particularly regulated industries that they needed. It was just amazing.

Peter Higgins 13:52

Well, it seems to have gone on extremelt well, because you grew the business, it grew very, very quickly. And then you've got your lifetime business partner with you now came into to the business. And in 2005, you'd be an usher to float this business on AIM. And I've read a few bits and pieces and somebody raised this money.

Peter Higgins 14:13

And some of it was used to saying, you know, maybe we went a bit too early, but you know, you go into 2005 It's listed on AIM. Everything's going great. And you know, you're going from strength to strength and just growing at a rapid speed and generating revenue. And everybody wants a piece of Elizabeth Gooch and now called EG Solutions and you're getting awards for everything. Yeah. And you're also in an arena which means tech means men.

Peter Higgins 14:44

You not going to get out of the way? You know?

Elizabeth Gooch MBE 14:47

Yeah, back then. Very few women in tech. Even now the industry average is 17%. We have 35% in EG and really struggled to get more. I wasn't actually because we didn't want more, but we struggled to get more and struggled to retain more as their lifestyles changed, because that does happen.

So you know, that was a you have to become quite flexible as an employer to retain women as they go through these life changes.

So it was pretty tough gig actually getting to that 35%, we have very diverse workforce in terms of every ist that you can think of sex, race, religion, ability, we have very diverse and very disparate workforce, I would say also, because it was spread all over the world, we would have skill wherever we needed that skill.

We were very advanced in terms of that from a working from home point of view. Although I have to say, as a little aside, I was actually the world's worst CEO for working from home policy back then. Now I'm the best CEO, as far as I know, go, oh, my God is so amazing.

I had this real belief back then, that the core team needed to be in the office for the purposes of team building and fairness to people that have to come to the office every day and I reckon some of my old team of public I do listen to her now going banging on about working from home, you don't need an office and her business is virtual. Just imagine all of that.

Peter Higgins 16:23

Well, this is growth, isn't it? This is about you getting older and wiser. And even you Elizabeth was talking about working smarter and more efficient back, then you're doing it now more for yourself.

Elizabeth Gooch MBE 16:33

I've evolved more in the last few years and in the previous 10. Trust me.

Peter Higgins 16:38

Really good to hear. Now, for people who don't understand and didn't really know about EGS features just give me a little synopsis of what they did and why it was so innovative. And ahead of his time. If it was Tesla or the back office back then he probably was so far ahead of everybody else people went, I don't need that until they actually desperately sought it out.

Elizabeth Gooch MBE 16:56

Yeah, well, I would say creating a market is probably one of the hardest things that any entrepreneur can do. And I actually do say to my startups, now, I don't mind this competition, because competition helps make the market but we invented a product.

And I'm going to say we because although it was my idea, I didn't build it all on my own. So we invented a solution. That became called back office workforce optimization. And I've mentioned already, the consultancy started off with production management in the office. And we changed it to back office workforce optimization, because I've also mentioned, you know, the split between Contact Center calls, and back office meant the call side went off.

And you know, vendors got involved and developed workforce management solutions for the front office and left the back office behind, there was nothing there. And that's where our solution played well. And so we could actually see over time that that would be sort of converging as a marketplace. And so the phrase back office workforce optimization was created largely by analysts who were late to the party, but that's the name that they put to it.

That helped enormously. But at the same time, it helped it brought in big competition. Now that big competition was great, because it also helped to build the market, they also became one of the acquirers further down the track. So that separate sort of story to it.

But back to what the solution did, basically, it helped businesses manage end to end complex processes very efficiently, and manage the people around the work so that the people, people's performance improved massively, because expectations of what they needed to do when in the right order and priorities etc, are managed for them by a system by a process.

And then what that enables the teams to do is actually perform really well as individuals rather than relying on the people to do the process. So the businesses then owned the process, the system owns the work and the people performed well in that environment. And implementing that software would deliver a minimum of 25% productivity improvement in six months, very often in the region of 35 to 50%.

Where does that productivity gap come from? And you may say, How can these organizations run with that much capacity, it couldn't see what that that that capacity was there, because the process management side was so inefficient. And once that was streamlined and automated, using the software, people then basically were able to focus on doing the core elements of the job rather than on managing work and chasing the tail and follow ups and all of that sort of thing. So that's where those savings actually came from.

Peter Higgins 19:38

That's brilliant. I mean, because obviously, you get recognized for this then you're winning all these awards, you will in UK tech entrepreneur, CEO of the Year awards, and so on and so forth. And then the Queen comes knocking for little old Elizabeth Gooch. Tell me about that.

Elizabeth Gooch MBE 19:53

I was in shock, had absolutely no idea anything about that came home I think from holiday and opened this envelope which looked very nice. And it said, she'd like to invite you to accept an award. And I was like, Oh my God.

In fact, even now just even saying it, I still got the tingles. I've never felt I deserved it to be honest, as they call it, imposter syndrome. Now, fraud despised, say, a portion of the actual experience of getting the award was amazing. Also, I mean, all mobile phones taken off you.

So you really do have to concentrate and are able to, and I say that's the right thing for them to do so that you get to build that experience. But it came about because of the work that we'd done with UK trade and investment and exports, and actually exporting to South Africa. And obviously, other territories, as well, as software eventually was used in 50 countries throughout the world. But yeah, amazing.

Peter Higgins 20:52

Absolutely phenomenal mate. I think it's deserved. I think the main thing for me, Elizabeth, and I've always said this, really is that one of the things about being successful is that you have to be true to yourself, you have to back yourself. And I think if you truly believe that you can do something, and you, you manifest it, you visualize it, you can achieve it. And I don't think enough people believe in themselves, and they get so many knock backs and people trying to undermine them, and all the rest of it. So, you know, I think you have to just carry on believing in your own ability sometimes.

Elizabeth Gooch MBE 21:22

Yeah, yes, I'm going say that.

Peter Higgins 21:24

So we've almost reached a little bit of a mini sort of peak in all things going really, really great. And we start the year, we're going to go to 2017. Now we're going to fast forward to 2017, right. And you know, where I'm going to go with this, if it pays off, right?

You start the year in February, everything's going tickety boo, you got a 692 grand contract, and everybody's went, whoo, we fast forward to September, and you get an another knock on the door that you don't want. And you've been taken over.

But prior to that, you were like, I'm not sure that this is the value we want to exit out. But you end up leaving anyway. Yeah, tell us a bit about it. Because this is about leadership now and this is about your managing companies, every single thing that you put into place sometimes doesn't go even when you put a plan in place, or I put a plan in place.

Elizabeth Gooch MBE 22:05

By the time we got to September, by the time we got to 2017 I was less than 25%. Shareholder, so that was one of the things that the professional investors were very keen on is that I would sell down over time. I mean, it would never happen, I don't think now, but I think our free float was about 32%, when we actually listed in 2012. And I still owned 68%. And at the beginning, it wasn't a problem.

But as governance requirements increased. That became a problem for investors who wanted to see me selling down so that I didn't have that controlling stake. So I think I was probably about 70% By the end.

But not 100% sure on the numbers now. And I think the key thing is a founding CEO, we wear a number of hats, you are an employee. So you're a salaried employee, a salary CEO the one hand, you're a director, on the other hand, so you have fiduciary duties, to take care of all of your stakeholders, including the company and the stakeholders.

You're also a shareholder, but you're one of many shareholders, you've got to look after the shareholders’ interests. So it's not a straight line of I want to do this anymore. And you've got to take into account the sort of the needs and requirements.

And this offer had come along a couple of times, actually. And the shareholders wanted to do it. And so I didn't have a controlling stake to stop it would even if I had, I wouldn't have used it.

Because as I say, You're you've got to take into account the needs of everyone else. And I think actually, there were two things that swung it for me one was the VC some which have come in at 6p were quite keen to sell.

So why wouldn't you? Yeah, I can get a good return here. But the other side is what's best for the company. And what the acquirer was actually offering was we're going to take the company global. And that's what we wanted to do.

It wasn't the decision that I personally wanted. But I believed it was the decision that was the right one to make at the time. There were some retail investors that were not happy. And an EIS investor that wasn't happy because it was within the three years that they've invested. So it wasn't good for them, but for the majority it was.

Peter Higgins 24:20

Yeah, I mean Verint were what a billion pound revenue company at the time as well. And they were offering I think it was a 50 plus percent premium 112 and a half pence. So the VCs at six pence were laughing their heads off weren’t they? So not everybody might be happy I understand that.

Elizabeth Gooch MBE 24:37

Including me. I wasn't happy with it.

Peter Higgins 24:39

I know you weren't because I think we were speaking at the time. I think you've handled it really well. And I couldn't believe it. What really staggered me was the fact they asked you and obviously you had a good relationship with the Verint team.

They asked you to stay on for three months just you know a bit of prepping stuff for them. And you did I was like, I wouldn't have done that. That shows something that you've got.

Elizabeth Gooch MBE 24:57

It was actually six, but I didn't know for that long, funny thing was a lot of the professional investors always used to say to me that one of them particularly used to say you put high control needs. And I go, no, not personal control needs, but control with a small c.

And I think the implication was about delegation and you know, letting go. But the reality wasn't built a team that can actually work without me. And I'd spent an awful lot of my time on the city side of the business rather than in the business. So Verint, were able to take a business that was well cooked, and didn't need a lot of sorting out, because it just worked. It was a great team.

Peter Higgins 25:35

Absolutely do exceptionally well. I mean, this is why Elizabeth, I think you're so sought after up and down the country to give talks on leadership, on startups on Angel Investing, and all the rest of it, you just did an actual tour de force as they say. So we're going to talk now about this new decade of what you're involved in and tech growth factory, which is your baby, I think, really, essentially, and you're helping UK tech startups and scale up, essentially, to get them into thriving businesses.

So let's talk about that now and what you've been doing, because I know you've been busy, it's so difficult to get a hold of you in the last couple of years. So tell us a bit about that?

Elizabeth Gooch MBE 26:13

Well, there's a lot of startups out there it's about 6,000 year that have been formed and about 35,000 startups and scaleups in the UK.

And the stats are dependent on which stat you read somewhere between 70 and 90%, will fail within the first three to five years.

So the stats vary, but the general message here is there is a lot of failure in startup world. And so my reason why is actually to help more of those to actually succeed and get over that period where failure rate is high.

And to the point where 1 million of annual recurring revenue, that's when serious professional investors start to get interested. But how do you get those pretty much left to chance. And there's a fair few theoretical programs, but it's still go away and do it yourself.

You know, I've actually been there and done that. I mean, part of the story that we didn't talk about EG we actually started before networking was rolled out massively in big corporations. So we started on standalone machines.

It wasn't even networked. The licensing model was perpetual. We started with zero revenue every year, that we then had to build and grow every time. It wasn't SaaS, it wasn't subscription at that point that just wasn't about it.

We pivoted to that in 2012 and we grew 6 million of annual recurring revenue in four years on three to five year contracts, but one of them was a seven year contract.

That was a massive growth in recurring revenue in a short period of time. And, you know, that was the thing that would have sustained us and taken us forward. And we could have achieved an awful lot more following that model.

But to survive, that's what these little businesses need to do is to get from A to B as safely as possible. Also, serious investors will come in and invest in them.

And I think there's two things that they need in place to get serious investors. One is yesterday, you get there, because you haven't proved it. There's a market that customers are interested.

But most importantly, there's a scalable, repeatable business model. Underneath that is investable, and actually the scalable repeatable business model that's investable engine, not the annual recurring revenue, because you can actually if you do it, right, you can get to 1 million with one or two contracts, that doesn't prove anything that just proves it use, we've solved two customers problems.

Let's, you know, build that scalable, repeatable engine that proves we can get velocity in a sales process and get volume through. And that becomes an investable proposition. Why am I doing it 100%, no repeats if I'm completely honest, just startup world and squeaky bum moments having lived like that for 30 years, I'm just addicted to it, I guess. And also being completely honest, I was looking around for the lightbulb moment to start again.

And again, it happened where the business evolved out of work that I was doing to help others. And while I was doing that work out of that evolved, what I call act three, I'm not going to make it more best act. That's my plan.

Peter Higgins 29:13

That's brilliant, because there was a little time or you still got the job. Actually, you took a NED role. If I'm correct.

Elizabeth Gooch MBE 29:19

I got a couple of those.

Peter Higgins 29:20

First one was that with ECSC?

Elizabeth Gooch MBE 29:22

Wasn't ECSC Yeah, actually, that was with a CEO who'd gone through pretty traumatic time himself with his board, and you're just kindred spirits on that board. Cyber obviously been, you know, the other thing I tried to do is to work with technologies that have got market interest and resonance that say, although having said that, I've got involved in some strange things like virtual reality and logistics, which I actually didn't continue with that word, you know, the one that got away. Just imagine what that would be training lorry drivers using virtual reality now, in the logistic industry that you think that might be in demand. Yes. Really? For me? Yes, it was. And I’d wish I’d done it.

Peter Higgins 30:07

Also learning Elizabeth. Yeah. So you're sticking around the tech and the innovations and all the rest of it, doing that with cyber ECSC.

You're doing that with Tech Hub, and all these other companies that you're seeing, and you're speaking to, and you're looking at all these companies all the time, the bit that I want to get from you, Elizabeth, right.

And this is very important for investors, you're investing in some of these companies. And you're also investing your time in some of these companies. Most of the ones that you're doing angel investing are a not listed. Right? But if the might, you know, have an exit at some stage, what are you looking for, other than the innovation, what you're looking for in the leaders, because I always think it's very important to choose really good leaders, you're doing your due diligence on these leaders, what are you looking for? And what should investors be looking for?

Elizabeth Gooch MBE 30:52

My very first principle, one of my own core values is making a difference, I have to make a difference and deliver value. And that value word, I think, is the key to success for a startup.

And the question I said there was, what is the value that you're actually delivering and who you delivering it for? And they sometimes look at me quizzically, and they go, but actually over here, I've built this thing of it's going to be the best XYZ in the world, and it's going to revolutionize whatever's going on.

Why? And what's it going to do? And who are you doing it for?

So I'm looking for a sort of three minute max answer, that actually they can say, we've developed this, it helps XYZ person to do ABC and improves our lives in this way. And what's the difference that you're going to make to someone? And is there enough of those, someone's to actually make a market to deliver the plan that you're suggesting you can deliver, which is always a hockey stick?

I'm used to seeing it yourself, everybody. He says, I'll stick with me. Like, that's just so unreal.

There's no such thing as a hockey stick is there? It's very importantly, in business. So that's the first thing I look for is what's the value that they're going to deliver? And what's the solution to do that, and I'm not really bothered about the tech, you know, I don't really care.

I think probably some of the worst businesses I see are the ones that are were built this and it's perfect. And I like well, actually, you put the money into the product, and you have not even spoken to the customers yet to find out what they want a firm believer that the customers can issue product for you, and tell you what will solve their problem in detail.

So that start with that one interesting point about leadership, because 9 times out of 10 and I'm one of those, the people that start businesses and find stuff, and invent things are not necessarily the leaders that should take those businesses forward forever, through every stage.

So I guess I'm looking for, at that point, people who have got the ability to get to that 1 million of annual recurring and lead their team to that point. And also the listening, ability to learn, not just from me, but from others about what are the right things that they need to do in order to achieve that.

So I'm looking for that you have to like for people, and I think sometimes you know, that started to go do we need to find it as needed now. And you know, I'm not going to do that with you.

I want to know who you are and find out who you are. First, you've got to get on. Good business is bumpy, as I've said. And if you fall out in the rough times, that's going to happen, you're going to fall out, but actually can you recover and get on with it and still be a good team thereafter. But the ability to listen, these I think is really key. That's the key leadership skill. And I will look for.

LSE 33:38

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Peter Higgins 33:54

With regards to one of your more recent engagements, it was Connexica. Yeah, you were .So that was quite an innovative company. And you've only recently finished working with them. You tell us a bit about that and how that went. And I'm going to talk about some of the others as well going forward.

Elizabeth Gooch MBE 34:09

Yeah, that's fine. Connexica was actually a partner who was working with EG. And we're going to develop and had developed their solution to actually provide a better business intelligence solution for our clients.

And so we basically looked at our product and go look, our core engine is our sweet spot. That's what we know best. But our we've got so much data in here. And data is a massive asset that organizations want to use.

But we're not the best people to actually extract that data and surface it and have a BI solution as well. That would mean would be two things at the same time. So we had a partnership with Connexica to actually provide their solution and amazing business intelligence tool that they developed.

And we were pretty much good to go when the acquisition happened, but of course they got their own BI tools and platform. And what they wanted was clients to have everything surface through that.

And so poor old Connexica who put a lot of effort and time into the solution will cut loose. And so the CEO just basically said, you know, I need some help, I'm in this position, can you help me.

And so I did. And I did that. And that business went from struggling cash strapped small average sales in 12, to 18 months to a million avoidable, avoid recurring revenue, 25,000 pounds average sale subscription model, enough cash to get itself through COVID unaided. And they did an amazing job.

And actually, they wanted to then go on and do other things. And I wanted to do other things. And I think that's one of the things I've learned from that experience is, I don't need to be involved forever, you can be involved for two to three years to help them through this position, and then they're ready for other people. And so it shouldn't hang around if they are ready to do something else. So that's that's what happened.

Peter Higgins 36:03

Shows how strong you are in resolute and how much resilience you had. I think the other thing that people don't know about you, Elizabeth, is your ability to help businesses not only to grow, but actually find and seek out funding to have the foundations to actually grow because all businesses need money.

A lot of companies got fantastic ideas, but they don't know where to source the money from or how to get people to invest into them. So you're sometimes investing alongside but also helping them find the monies as well. So you want to expand on that a little bit for me?

Elizabeth Gooch MBE 36:36

Yeah, well, my first advice to them is the first place you get money is from sales. So let's go out there and get sales, it's the cheapest money that you will ever raise. And then you know, there's a I mentioned already, you know, our first money that we raised was IPO wrong on every level nowadays, but at that time, there wasn't the network and the infrastructure in place that current tech companies have, and just what just didn't exist, your choices back then with bank lending, and banks, they only wanted to learn for manufacturing kit.

Or you could list so that's how we ended up where we were. So you know, that's, firstly, revise, let's not go to an IPO straightaway. There's a continuum here, your your own money, your sales, your friends and family, angel investors, yeah, then we get to the professional money, and we might get to an IPO or not further down the line, depending on what you actually want to do your business.

So helping them through that is something that I do. And I've worked with Minerva on the angel side, and take businesses to the Angel Network. And there's a lot of angels out there willing to help.

Now, obviously went very quiet through COVID. Raising through COVID was a bit of a challenge, but was done. And then obviously, I've got the network of people that I work with in the city and still do that I can take them to as well. And I try and advise them, you know, it's always try and get a little bit of grown up money.

And they go, What do you mean about that, so it's getting the money from the next level. So you start to act as if. So if you're acting as if you have got outside money, when you go to get outside money, the outside investors are going to go oh, you know, we're talking about you're ready for that.

And the same, you know, as you go forward. So getting that, I'm going to say governments with a small g to you don't want anything really heavy, and you certainly don't want PRC costs, but you want a good financial reporting deck, you want good KPIs that monitor where you go in. And you want to adapt, right, correct accounting principles and the way you recognize revenue.

So when people lift the lid, do a bit of dd that's all fine. I'm going to worry about that. Let's concentrate on market product, etc. So that's the way I help them, and also take the hockey stick and the Gartner Magic Quadrant out of the deck.

Because everybody's everybody always thinks their solution is top right corner of the Gartner quadrant. And they always go 10 billion in seconds. They think that's the message that investors want to hear. And I don't think they do investors want to know, what's the milestones that you're going to go on? And why are you here now. So that's helped me know.

Peter Higgins 39:06

Brilliant. I mean, one of the companies that you've been involved with for a little while, Expandly, your recently became the CEO of that. And it unlike all we've taken on a CEO role, that's absolutely phenomenal. So I want to talk to me about that.

Because that seems to be really a really sweet spot right now with E-commerce and everything being sold online. And you seem to be ahead of the game here in consolidating that and making sure that businesses can just go in one place and just do whatever they want to do. So tell us about Expandly?

Elizabeth Gooch MBE 39:34

Well, the interesting thing, it's exactly what EG Software was we were doing that in the back office, bringing all of these different channels of work together phone, paper, computer, whatever, whatever messages, prints, all that stuff into one single front end so that an agent or whatever you want to call them.

Sitting then has got a single channel of work. It's exactly the same for retailers that sell on multiple channels and with the added complexity of these channels change virtually every week. And the rules within these channels that are owned by, you know, the likes of Amazon, eBay, all the different channels that you can think of they're all the rules are different.

There's nothing standard across that sector. So for retailers been able to manage that minefield, it's very high level of manual tasks, very administrative, increased cost. This is immediate read across from the GE side with, for me, the brain challenge that I had was a massive learning curve of the E-commerce world, and these channels and actually getting to grips with them.

But I inherited a COO CFO who's one of the best people I've ever worked with, really, really strong, and we have a good relationship. And together, we're turning that business around, and it needed a lot of reengineering under the hood, in a way we get to see really interesting.

Peter Higgins 41:00

Now it looks interesting, I looked at it and I thought, Wow, you guys are competing with some real behemoths there and getting stuff done. And the fact that you've been recognized as well by other other companies that are looking at Expandly is really amazing. But with my investing head on, I'm thinking I'm taking the role of CEO, what's the cunning three year five year plan? Are you looking at becoming a behemoth? Are you looking at floating it? Possibly? Are you looking for a trade exit?

Elizabeth Gooch MBE 41:23

No secret. I mean, the main, the main goal is restoring shareholder value. And in fact, it's a secondary goal, because our first goal is helping retailers sell more or more channels and make more profit.

That's our goal. So our goal is very customer focused, which the business hadn't traditionally been. And with the subsidiary goal of restoring shareholder value, so some shareholders come in and and which raise the price that we invested at. And obviously, we're very disappointed when, you know, the business didn't achieve its targets.

So there's some big numbers that need to be delivered to prepare that. But most angels are looking for an exit, aren't they really? I mean, that's the bridge everybody's looking for?

How do I monetize this investment that I've made? How do I get my return? So you have to look at all options. And this industry is very fragmented, there's competition in there, it will consolidate. And so the options are be consolidated all via consolidate or for sure. It's all to pay for at the minute, we're working on that immediate goal, but X million of annual recurring revenue to restore shareholder value. And when we get there, then, you know, what's our next option? And obviously, we won't leave it till we do get there. You know, you focus on what you've got to do today, whilst being mindful of the future.

Peter Higgins 42:45

Like that. I saw something really interesting when I was doing some of my research and one of the companies that you're involved in, is the social messaging solution company. Nivo. Yeah. And I saw something related to CLS Money.

They were looking at mortgages and each mortgage. You know, we're just at COP26 Elizabeth. So it's fantastic. But it's mortgage or whatever contract they when they've got a relationship partnership now with a company called more:trees, they're going to plant a tree, I think, wow, how many companies could do that and plant a million trees and just deal with this climate issue?

Elizabeth Gooch MBE 43:16

There's a story there and I'm sure you're asking that question for a reason. They certainly don't be so well go on. So the CEO and founder and its family, Alan Wilson, he developed the more:trees solution, and sold it to The Hook Group after he left expanding. So that's the connection. Cool beans. Right. And what a great what a great exit about little business. No, we just developed it and started it and doubled it. So it's amazing story themes.

Peter Higgins 43:48

Absolutely. Lovely story. I've got a couple more questions, but I wanted to touch really on you did a lot in the middle and you do a lot now in Manchester, and then all of a sudden, so you're popping up in Scotland with Aveni you're everywhere mate.

Elizabeth Gooch MBE 44:00

The world is a small place, I don't have to travel there anymore. Zoom takes you everywhere.

Peter Higgins 44:07

So if you don't go to Scotland, Scotland will come to you. I get it, I get it.

Elizabeth Gooch MBE 44:11

Well, it's worse than that. Because there are people that say, would you come to our Christmas party? No, I can't do three Christmas parties in different cities at the same time. So how do I manage that now, so someone's going to lose but anyway, but lockdown and virtual working means you can help anyone anywhere.

Peter Higgins 44:27

So you've got Aveni, a Scottish software company that one came to my attention and looking at it and think, oh, AI, I love my AI. Now I'm looking at all these different companies again, what niche they’re in regarding AI and how can they do it? So just tell us a little bit about AI? And what drew you to that company?

Elizabeth Gooch MBE 44:42

Actually not the technology because I said this already, but I actually don't care about the technology per se I'm going to receive somebody comes along with something very old and stupid that I wouldn't get involved in it, but it's what is it doing?

That is the important thing for me and the value that it adds. Now it's even more in that I know speech analytics, but it's speech analytics plus, this is the next generation of speech analytics and speech analytics, obviously very intensely journalistic solutions of call centers.

So we've worked alongside these tools for 25 years. And obviously, we're down but as they developed to date, so I know the marketplace. But why is it a plus, that sector was very homogenized, where the solutions were the solutions and you worked this way you did this that and the other. And as with all things, businesses, then go well actually done the basics.

Now, what's next, very helpfully, the case of Aveni, what came along was a lot of government regulation around monitoring vulnerable customers. And that resonated with me monitoring vulnerable customers and being able to identify periods of vulnerable customer, through your interactions with them. And so all businesses have been regulated to monitor vulnerabilities and that many vulnerabilities, it could be your inability to pay, it could be that your sold some financial services products that are inappropriate for you.

It could be, you know, the elderly, unable to get out to read the meter, it could even be someone with trans impermeability, who's got an illness or whatever, you know, can’t XYZ.

But businesses have got to identify who these are. And what this solution enables businesses to do is 100% monitor every call. Whereas speech analytics would do that. But there's still quite a bit of human interaction, it's about 30%, better accuracy on the monitoring side 100% of calls monitored.

So all of those vulnerabilities get picked up. And that, to me was the thing and I can help them because they're in a marketplace that I know, so resonated, what the solution was, what it was doing, but also in a marketplace that I know I can help them say, and they do amazingly well actually.

Peter Higgins 46:55

I just find it fascinating and brilliant that given all of the journey that you've had so far since pre 1988, that all these businesses now are finally almost finally, recognizing your sheer quality and brilliance, Elizabeth and I just love it. I feel really proud to know that you're out there doing good, you know, and these companies are doing what they're doing.

Elizabeth Gooch MBE 47:15

I just want to help more Pete. That's the thing.

Peter Higgins 47:15

But it's brilliant. And I want to finish off with this last listed company that you're working with, because we started the conversation with you saying about your dad saying you play at your own end and find you in a ship broking company, Braemar Seascope, now, Braemar Shipping.

Elizabeth Gooch MBE 47:37

I asked him. Why me? Why me is because the new CEO, it's a very federated module. And he wants to bring the businesses together. He wants to grow rapidly. So all of that operational stuff that I've done before about how to bring teams together and to decentralized decentralized models. And if that all comes into play, he wants automation.

He wants to automate things. So he makes it more efficient, so that he can feel his growth, do more with less resources, and more with the same resource, whichever way he wants to go. So he wants to do that.

And he wants to offer solutions to his customers. So it has a technology side to it. And so for that reason, I said yes. And like the first one was, what that means, what does it mean? So I did go and sort of absorb myself in it.

But culturally, I absolutely loved that business. And I love the people in it. And they have made massive progress in a very short space of time to bring decentralized businesses together as one team, which you know that one team philosophy is really something that I'm really keen on. So I said, Yes, I would do it and I'm really glad I did.

Peter Higgins 48:50

How you having to go down and around to work all their various sites and put a hard hat on your lovely hair, Elizabeth?

Elizabeth Gooch MBE 48:58

I was scheduled to do that. Going to Felixstowe on a ship, and actually see all of this happening. And the Port Authority stopped it because of the latest increasing COVID case. Well, the plan was most definitely hard hats. Yes. And boots, steel toe cap boots. It's just massive ships, and you just have this thing of stuff moving and how do you move it more efficiently? And that's, you know, that's just a bigger process. As far as I'm concerned.

Peter Higgins 49:30

I think it's fantastic. You've been working now for X amount of decades, mainly in industries dominated by men. And finally being recognized for your true worth. I think it's absolutely awesome.

I want to close with one final question, really. And it's about investing and it's about tech. As investors we're always looking or I'm looking at some of them that are interested in tech companies are looking for innovative companies. Now, you've said in this interview, that you're not always looking at the tech you're looking at the leaders are you looking at you know how to make it more efficient?

There are companies now still carrying a lot of inefficiencies. What would you say to an investor that's looking at a company that's having a deep dive that they should be looking for where companies are carrying to maybe the wrong term?

The fact you're looking at really efficient companies that are going to be able to keep maintain their margins and not be struggling with that or just running inefficiently, what they should look out for?

Elizabeth Gooch MBE 50:25

So are you talking about the tech companies themselves? Are we talking about their potential customers?

Peter Higgins 50:31

Companies in general, I think, but also looking out for the amber flags. And the red flags, say, this is an inefficient company look out.

Elizabeth Gooch MBE 50:38

I'm going to turn it on its head slightly Peter and say to you that there will always be inefficiency, because things can always be improved. So from an investor perspective, I would be looking for the businesses that have worked out what the value proposition is that they deliver to their customers.

And if we're talking specifically about efficiency, can they articulate what that is, but it doesn't necessarily have to be efficiency, does it? You've mentioned ESG already, it could be things in that area.

Although I have to say I do feel still the ESG has been more mandated and people businesses are doing it because they have to rather than because they see the value of it. But I think you know, that's the key is to actually get them to articulate if you're going to invest in a business get them to articulate what is the value that they add. And if they say increase sales, it's better services, increased efficiency, show me the measurements. What's that measurement? Articulate for me? What that actually means? Things like this process used to take 90 days now takes nine seconds you know, whatever that is measurable look for measurable indicators and customer testimonials that actually say yes, it does do it.

Peter Higgins 51:52

Brilliant answer. Love that. Elizabeth, we've been talking for a little while now. I'm going to conclude this. Thank you ever so much. That was me Peter Higgins on the Investing Matters podcast for London South East with the phenomenal investor entrepreneur. MBE. Scale up mentor visionary Elizabeth Gooch MBE. Thank you very much. Take care. God bless.

LSE 52:16

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