Building Africa's development through entrepreneurs and investment

Podcast transcription - 7th November 2018

Alan Cowley:                    Welcome to another Invested Investor podcast. This week I'm sat opposite Tamara Giltsoff. Tamara was recently the Head of Innovation at the Department of International Development. She co-founded a company called Product Health. And this week we'll be talking about impact investment, the lean start-up methodology, and unlocking capital. So, Tamara, let's hear a little bit about your background please.

Tamara Giltsoff:              Thank you. It's great to be part of this. I'll roll back a little bit. I come from a creative background originally, so I studied design originally, and then brought my design and creative skills into business in the late '90s, where I first met Nat Billington, who went on to become my co-founder of Product Health. And so, I guess I'm a slightly unusual combination of creative thinker and designer with business acumen and commercial leadership mixed with a very strong focus on impact, and the impact focus is really ... I guess I'm a natural innovator and I see big challenges in the world, and I see them as opportunities. I've been very driven by those big opportunities partly because I'm fascinated by them, and there's a sort of sense of purpose to my work, but also because I genuinely see intractable problems as opportunities to create value, as well as solve the problems.

Alan Cowley:                    Okay, so where did the opportunity for Product Health come from?

Tamara Giltsoff:              Nat and I have known each other for a long time, as I said. I had been working with Telef√≥nica for about a year looking at Internet of Things, connected devices enabled business models, largely in the consumer market through 02, and Nat at that point had just launched Synergy Growth Investment Fund. And I think Nat and his business partner, Steve, had promised each other to sort of keep a bit of space to incubate ideas themselves, both engineers by background.

Nat and I would talk regularly about business that we were working on, and Nat sat down and said, "I'm doing this really interesting piece of research with Oxford University on batteries, and I'm combining the world expertise on battery chemistry and battery behaviour with Oxford's smartest machine learning guys." And he talked about putting sensing and communications on the battery, capturing data from the battery, and analysing it. I said, "Well, that sounds quite similar to this Internet of Things phrasing that we've been talking about in Telefónica and commercial business." And he said, "Yeah, you know what? I think this is an Internet of Things play," not that that really means anything other than ... but it's a sort of technology phrase, I suppose.

And I had always been interested in technology that enables new business models. Nat was very technical and an engineer, and I was and still am very interested in what technology can enable in terms of the business models that it unlocks. He also said to me, "Well, we've got this first potential customer," which is a company called BBOX, "and they are currently making, manufacturing, or overseeing the manufacturing of small solar home system devices," so think small solar panel, battery box, a set of devices like lights and small radios, although I don't think they were doing radios at that time.

Alan Cowley:                    Are they based in the UK?

Tamara Giltsoff:              They were distributing in Africa, so they're based out of the UK. And he said, "From what I understand of this market, in order for low income communities to get access to these solar systems," and obviously the price of solar panels had plummeted at that point so there's this sort of convergence of these different technologies, "they need to be able to sell these on a pay as you go basis, or pay over time basis." So, what we know is that low income communities can pay on a daily basis, so what they were using for energy, or for light, was typically kerosene at that point, so you could pay on a daily basis for something. You can't necessarily put $250 up front to pay for the unit. But if you connect the device remotely, you will control the device, you have some sort of management over that asset, and therefor the ability to do payment over time.

And so that really was the sort of business opportunity that this connected device. And then the clever piece behind it, we thought not only we're going to connect the battery unit, we can also start to understand how it's being used by the end user in very remote parts of rural Africa, let's just say, if that's where we're distributing, or that's where BBOX were distributing, and then we can anticipate in advance if it's going to fail, or if there's a problem with the battery to begin with, or if it's being misused, so if it's being overused and undercharged consistently, and we can prevent that.

And so in conversation, and that was sort of basically the conversation, perhaps not as sophisticated at that point, but that was the opportunity that we started to play around with, and it combined a number of things for me that was interesting. One, clean energy. I'd been very and still am very passionate about addressing the climate challenge, an energy challenge, and as was Nat. Two, a business model that could reach people that otherwise wouldn't have access to this type of energy and clean energy. And three, sort of solving a problem around when you distribute in remote places. How do you make sure those assets are maintained and protected? And I was also interested in, and the market hasn't quite gotten there yet, but what happens at the end of life of those assets and that material in those assets. So, it really piqued my interest.

And I think the other thing that was interesting for me was discussing this with Nat. So another big theme in my career, and I really believe for businesses and start-ups, is the importance of relationships. Nat and I had worked together previously at Oyster Partners, which went on to become LBI. He sold that, I think, in about 2003 or 2004, so I worked for him and with him at that point, and we always shared business ideas throughout our career. He was a great friend, but also we could move between deep friendship to business relationship. And I thought, "What a great opportunity. I'm really interested intellectually in this business opportunity." I had been doing some business with Nokia in Africa, and that was the other interest area, and there's an opportunity to do something with Nat.

We've got a very good working relationship as well as personal relationship, and I know Nat's background. He's a successful entrepreneur, and so that was enough for us to come together. And I think for him, he was a brilliant businessman and a fantastic engineer, but he really appreciated the creative perspective on things, and very much my kind of focus on the business model and business developmental, I guess, or innovation, however you want to describe it. But really understanding what is the problem we're trying to solve here and how do we use that to help inform our product development. I think it was a great balance of two people with different skills, so we set about beginning that relationship. I think that was in 2012, I'm going to say.

Alan Cowley:                    When you started Product Health?

Tamara Giltsoff:              We started ...

Alan Cowley:                    The thinking about it?

Tamara Giltsoff:              ... the thinking around it.

Alan Cowley:                    So from Product Health, you moved on to the Department of International Development.

Tamara Giltsoff:              Mm-hmm (affirmative).

Alan Cowley:                    How did that transition happen? How did you end up at DFID?

Tamara Giltsoff:              Yeah. Product Health sort of started to come to a natural end for natural reasons and I was also ... a bit of a strange time for me in business. Nat had passed away, I'd just lost my father, and my mother was very unwell, so I actually sort of stepped out, I think, by December 2015; I was advising Product Health. In January 2016, I think it was really early January, Nat's best friend, Lorenzo Wood, that he built his business with, Oyster Partners, just sent me this link to this job description. He said nothing in the email, I just got this link. And I clicked on it because it was Lorenzo. It was a link to the job at DFID, Head of Innovation at DFID. At that point, I wasn't looking for a job actually, at all, and I certainly wasn't looking for a job in government. Never had done before. Never would imagine I would work in government.

I knew DFID quite well because they'd taken a strong interest in our work at Product Health because we were very much playing one of the markets that they had supported, which was their off-grid energy market, both on the mini-grid side and the solar home system market, so access to clean energy for rural off-grid communities in developing economies, and it's all sorts of impact we're using this to support that market from a development perspective. So I knew DFID through the work we were doing at Product Health, and we actually had received a grant from DFID through the GSMA, which is the mobile industry body that runs a number of innovation funds for DFID, mobile for development funds, so I already had a relationship with DFID.

Alan Cowley:                    Just for the listeners, can you give overview of DFID?

Tamara Giltsoff:              Yeah. DFID is UK's commitment to development and humanitarian funding. The UK commits 0.7% of gross national income, which was written into law under David Cameron's leadership. Depending on where the economy's at, it's somewhere between 12 and 13 billion pounds of budget a year. A large percentage of that goes to multilaterals, so the UN system and the World Bank, and IFC through the World Bank. A large chunk of it goes to humanitarian response, which can be anything to do with responding to natural disasters as well as to crisis like the Rohingya crisis or Syria response. I think it's about a 50-50 split, humanitarian to development funding. On the development side, our goals are really to address the sustainable development goals, 17 of them. A lot.

Alan Cowley:                    We'll definitely let people look for those or not.

Tamara Giltsoff:              Yeah, exactly. It's ultimately things like access to clean energy, education for all.

Alan Cowley:                    What was your role at DFID, and how much did you have in funded?

Tamara Giltsoff:              I came in as Head of Innovation. DFID's large, but how DFID manages this significant budget is to outsource everything, so a little bit different to other government departments in that we're not delivering core services directly to public. We're delivering services all across the world, predominantly 28 target countries. And how we deliver is through what we call program partners, and a partner might be the UN and its various agencies, or it might be a non-profit organisation doing humanitarian response work. It might be the GSMA, as I mentioned, or it might be partners that we have put in place and set up, so the Global Innovation Fund, which was under my responsibility, is one example of that.

So we never actually directly spend our budget, and the organisation has multiple different departments. It has the country offices across Africa and South Asia, and they operate with an amount of autonomy, so they'll have their own budgets. And then centrally, there's a large department called the Private Sector Department. It manages quite a lot of the impact investment funding through CDC, which is the private equity arm and development capital private equity, and now impact investment, under CDC impact program. And then they also manage quite a lot of the private sector relationships we work with. We're often partnering with perhaps head departments to address development challenges. There's a large research department that fund a lot of the early stage market-based solutions, development challenges, that just make funding sift through the research department. But they'll also fund early R&D into new vaccinations or agriculture solutions as global public good.

I've sat within a department called EPIC, Emerging Policy Innovation and Capability, which was sort of part foresight group and part strategic consulting group. We really existed to drive innovation through the rest of the organisation, and often actually to connect the quite disconnected departments. We were very catalytic, but we were also brokering relationships and looking for opportunities. My predecessor had designed and set up the Global Innovation Fund, and that still set within our department although it's a slight anomaly because really, my department would sort of incubate new approaches and then embed them within the rest of the organisation. But it's a very internal focused role, so my role wasn't to ... and in fact DFID can't, as I said, do this directly because of our governance rules. We weren't allowed to take money and decide who we invest it in. We'd have to do that through a vehicle, and that vehicle would have investment committees. We weren't allowed to be on those investment committee. We would often put suggestions to those funds, but there's certain amount of autonomy that those funds need to have, so I wasn't directly making decisions about who we invested in.

Alan Cowley:                    What was the main reason for that? Why do you not directly invest?

Tamara Giltsoff:              There're lots of reasons actually. The way that DFID is set up, and it's a lot to do with treasury rules and different ways of accounting for budget, so there's sort of a line, which is DFID people, which is very different to program funding. And we're spending public money. And so from their perspective and from public's perspective, the least amount should be spent on people and the most amount should be spent on the program, going into market. And the most efficient way to do that, which was all designed before I arrived obviously, was to do that through partners. That's one of the reasons.

Another way is DFID, again because it's public money, won't take risk on its own balance sheet, so you have to have a separate vehicle. And often, we're not talking risk investments, we're talking grant funding, but we're increasingly doing debt and equity, and so you need a vehicle to do that. And then related to that, for governance issues. I think in the '80s, DFID had been subject to a bit of what's now called 'tied aid', where certain favours were done and probably not always intentionally, but you end up giving certain partners funding and certain entities funding. Actually, this system is designed to make sure that there's open competition and fair distribution of public funds, so there's this governance approach to it, which makes a huge amount of sense. It's not always the most efficient way of doing it, and it can mean we're a little far removed. We call it the delivery chain. Sometimes, we can be quite far removed from the solution, and actually a lot of the work that I was doing inside DFID was to try and close that gap and to get much closer to the marketplace solutions and innovators and innovation.

Alan Cowley:                    Did you find it quite hard to actually find out key information about the end product then, coming back to DFID?

Tamara Giltsoff:              Not necessarily hard to find out about the end product because there's lots of events, contact with, reports, so a lot of these funds have to be producing reports on the markets that they're supporting because ultimately, we're trying to solve global challenges and create global public good. So, they weren't necessarily hidden, but we weren't always ... So I couldn't off the top of my head tell you in detail about Global Innovation Fund's 30 investments. I could tell you about some of them, but I wouldn't have had the time to get close to them all, and it wasn't really my role.

We were close enough in actually one of the things that we really pushed as a department, and in my role, it was to get much closer. So we created something called Dev Talks, which was a bit of a play on TED Talk, and we regularly convened and brought inside innovators to tell their stories of how they've grown businesses or solving challenges in some of the most difficult parts of the world. And always surprisingly hard to get people to leave their job, you know, their desk and their day job. But really, really important to get close to the innovation. That was just one way that we lived to that as a program. One of the pieces of work that I did, and my sort of thesis I suppose, was that I strongly felt, without stepping on our governance rules, that we as a department needed to operate with a bit more of an investor mindset, so take a little bit more of a invested interest in the success of these innovators and solutions that we were supporting quite significantly with large sums of development funding.

Alan Cowley:                    Is that in a sense following on investment, so such as an angel investor might invest in three rounds? Is it that kind of following up?

Tamara Giltsoff:              Yes, exactly. I think first of all, from my experiences as an entrepreneur, there's the capital part of that but there's also the incentive part of that. If you put money in a really early stage, whether you're a government organisation putting grant funding in or an angel investor taking risk, my belief is that ... The good thing about putting equity, and it's this scheme in the game, you really care where that money gets to. And we cared a lot about public funding, but we haven't really set up that mindset to really think, "Actually we've put money into a portfolio of early stage businesses."

Some of them we will learn are not going to make it or they're not solving the problem we thought they set out to, and so at that point we need to ... and we described it as 'exit'. It has different meaning in the venture capital world, but sort of say, "Okay, we put some money in early stage. Let's not keep funding that, but let's look to the solutions that are demonstrating potential." Probably because they've got a very good management team, they've really understood the pain point of the market, and they're demonstrating through the grants that we've given them that they're validating the hypothesis, this is looking good.

Again, what we can't do at this point is to say, "We're going to invest in them all the way through." But what we can do is create a series of vehicles that we could feed pipeline to, and we can also take interest in those solutions and say, "Hang on, this really looks like it's showing potential. Where else is there funding that could support it?" And if we can't fund it, what vehicles do we need to crowd in other investors that might take an interest in that? What ways of using our money catalytically could we do to support this huge pipeline of innovation that we would create through the grant funding.

The other piece that we're trying to do in Global Innovation Fund have been ... I mean, the work that they're currently doing begins to address what is often called the 'patient capital gap', or the pioneer funding gap. That point where grant funding really drops off and there's a need for debt and equity, but very patient capital in that phase. One of the other gaps is that a lot of these funds sit centrally in DFID and actually the reality of the challenge is on the ground locally in the countries that we're trying to get these solutions to play out in. I was trying to encourage DFID to focus much more of that innovation funding locally and venture support and ecosystem support locally. If you think about what Innovate UK and UK government has been quite good at doing, is building the entrepreneur ecosystem in the UK through tax breaks for early investors through to significant efforts supporting Silicon Roundabout and Tech City in London, and now regionally. You know, creating all sorts of things that support that ecosystem. And then it starts to attract talent and it starts to give confidence to entrepreneurs.

We can't expect this, development agencies put innovation funding in from a central part out of London and hope that they're going to make it somewhere far from our country. And so I think a recognition across the development sector, but certainly across DFID, that much of that capital needed to go ... Not all of it needed to go into grants, but actually using some of that money to invest in venture support and ecosystem support on the ground, engaging with local governments and doing that together.

Alan Cowley:                    Is that working with local governments but also local investors as well?

Tamara Giltsoff:              Exactly. Local investors and also encouraging non local investors to set up locally and to come into those markets. I think we're at this point now where there's enough interest, certainly in Africa, and there's a few venture capital firms like Partech, French venture capital, that have set up dedicated Africa funds. There's been a flurry of accelerators and some do really good jobs, others not, across Africa. There's something like 200 tech hubs I think, in Africa. There's activity happening, but we want that activity to increase. Africa has 54 countries. There are pockets of really thriving entrepreneur ecosystems, which we should support, but we should also begin to support the ones that are not thriving.

Alan Cowley:                    Was Africa your main focus?

Tamara Giltsoff:              It's DFID's main focus, and South Asia. So we have presence in Nepal, Bangladesh, Pakistan, and some work in India. But most of what we invest in in India is actually ... and actually a lot of ... I can't remember the name of the fund, but a lot of our activity in India is more returnable capital, because India doesn't necessarily now need our development support, but we're interested in innovations that emerge from India and how they could be relevant to other countries that we're operating in.

Alan Cowley:                    So you've got blended investment, angels, or venture capitalists, and the grant money coming in all working together, all supporting in countries throughout the world. What do you think countries like India that have developed far beyond our direct aid now, and we're monitoring what's going on and trying to use their technology elsewhere. What do you think Britain's position is in the modern innovation?

Tamara Giltsoff:              I think there's a number of things changing and it's not just that some countries like India are reaching, or have reached, middle income status. Bangladesh is fast heading towards that. And in those countries, our role changes. So I think that is happening. I think that for quite a long time, it has been a recognition that Development is working with these 17 sustainable development goals. They're hugely ambitious and although DFID's budget sounds significant to a lot of people, it's a tiny percentage of the investment needed to address those sustainable development goals. And we also, in fact probably the main point, is that we know that as development agencies, we can't solve most of those problems. The market needs to solve them.

The humanitarian context is different, and it's almost like a sector in its own right. And so sort of discounting that in this thesis, I suppose. It behaves in its own way. Innovation does need to happen. It is happening in humanitarian context, but it's a larger system and a much more delicate system. You can't allow the free market to happen in the humanitarian context, it's just a very different thing to play in. But I think there's a recognition, there has been for a while, that in order to address the sustainable development goals, the SDGs, we're going to need to elevate the pace of change and the approach to that change, and to work much closer with the private sector to do that.

The fourth industrial revolution is coming to these countries, it has come to developing economies, and in fact a lot of innovation is emerging out of these economies much faster in a way than it is developed economies because it's leapfrogging. Mobile payments is a good example of that. It's prolific across developing economies. Started by M-Pesa, which is the mobile payment system in Kenya, which DFID funded in its early days. The adoption of mobile payment is much more prolific than it is in developed economies, as one example of ways that we can leapfrog things. Equally, things like off-grid energy. Where there is no grid, there's no barriers to overcome in terms of behavioural or financial or business model barriers to leap to new solutions. There is a sort of shift happening in the way that we think about development, and also the emergence of technologies and the business models emerging around those technologies in the countries that we've been traditionally operating in.

I think there's also recognition that our economic development models need to encompass entrepreneurial ecosystems and investments, venture capital investment, and growth of start-ups as part of that economic development model, as well as solving impact challenges. And I think when we started to fund a lot of innovation and entrepreneurs in the early days, it was mainly because we knew that we wouldn't have all of the solutions ourselves, and so we were investing in innovators to address market failures. But actually, that results not just in addressing a failure around getting low cost education or micro insurance to farmers or access to energy or payment for water services, it also develops economies. And I think that that's also a recognition that's happening.

There's also an understanding that we can make much more of the money that we are investing if we use it catalytically, if we use it in a way that in some instances might de-risk investment for investors to bring in wider capital, or if we're the first in and then we use it to crowd in other investors, or if we take the pain or the cost of venture support an ecosystem of policy influence away from an investor, and say, "We'll fund that. We'll partner with you. We'll fund that part of it." Or if we use our capital to de-risk affects.

Global Innovation Fund is a good example where we've experimented with this on a number of investments, and I think we're just touching the sides on that. I think we're just beginning to use our money in that way. It's a very different way of using money. It requires us to, us being DFID, to set up much more flexible funds that would allow DFID leadership to put money into venture capital one minute, funding ecosystems on the ground the next minute, blending grant, debt, and equity in one investment, much more flexible approaches to getting innovations to scale. And it will require ... I think it requires a bit more of an investor mindset to say, "We really care about scaling these innovations." Not to reach half a million people, but to solve a problem for a billion people. And then we've really solved it at the level of the sustainable development goal.

Alan Cowley:                    How about taking equity on businesses? Is that something in the future that could happen or does happen?

Tamara Giltsoff:              It does happen already. As I've said, we can only do that through a separate vehicle.

Alan Cowley:                    Vehicle, yeah.

Tamara Giltsoff:              Global Innovation Fund takes equity. It returns its capital through ... so it recycles returns, and I think they've had one exit where they've sold their equity on and have returned that. And they're looking at creating what they call a returnable capital sub-fund, where they would take much lower ambition returns than the traditional venture capital fund.

Alan Cowley:                    So they return the profit back into DFID?

Tamara Giltsoff:              Back into their vehicle. It would never come back into DFID.

Alan Cowley:                    That's what I mean.

Tamara Giltsoff:              We wouldn't know what to do with it. And also because of the way that DFID is set up as an organization and the 0.7% commitment, we are legally bound to spend that money every year, so actually having money come back to us is not useful. We'd want to recycle it and do more with it, so to return it. We're doing some interesting things. We've funded something called Energise Africa, which was a bit of a experiment in crowdfunding debt for the solar home system market. You're effectively creating loans for people to pay off the asset over time, so you need continuous amounts of working capital. DFID have created a vehicle called Energise Africa, which allows UK public to invest their money at risk, for somewhere between a 5% to 7% return on that debt. Again, DFID is not necessarily receiving that return at the moment, but we put money into catalyse UK public to invest. That's a good example using of our funding catalytically.

And then we've got CDC, who they have the private equity fund, which is much bigger, but they've also got CDC Impact program, and within that they've got fund the funds. They've invested directly through venture capital vehicles as well as investing directly for equity. So we are doing it, but we're just beginning, and I think there's much further to go.

Alan Cowley:                    Where do you see DFID evolving?

Tamara Giltsoff:              I've talked a little bit about the shifts happening in development capital, in the development sector at large. I think the other big shift happening, which is particular to the UK, is post referendum, heading towards Brexit and a deal, and UK's trade relationships globally. We saw the Prime Minister take a delegation of UK entrepreneurs to Africa, visiting three countries, which is a very clear statement that Britain is open to doing business with those countries. And that's both ways. That's looking for UK businesses and entrepreneurs to build out these businesses in those markets on the African continent. Equally, for investors to look for opportunities in those markets and to set up and build presence there. As well as for us to learn from entrepreneurs building businesses in Africa, and to support them to grow their solutions here, or to influence what we're doing here. I think that signals a really interesting time for UK business and UK government.

I really felt the shifts are happening across government, so much greater collaboration between government departments, like the Department of International Trade and the Department of Business, Energy, and Industrial Strategy, which fund Innovate UK, as well as the foreign office and DFID coming together to say, "Where could we use our money together? What are interesting strategic priorities for UK for the problems that we're trying to solve here? What are investors looking at here?"

The most obvious example is FinTech. UK is a leader on FinTech London, particularly FinTech and financial wellbeing, or financial inclusion as it's often called, in developing economies is critical to the development of those economies, but also for individuals to be able to access energy, access services, health services, education services, micro insurance.

There's a really clear relationship between those two markets, one out of Britain, and one emerging across the African continent. I think that's really exciting actually, and if we can create a development path that's much more joined up and focused around big missions around solving access to clean energy or resilient agriculture of the future, or access to health services for all, access to education for all, in the most efficient ways. If we are looking at those missions from the same perspective, not necessarily exactly the same solutions, I think it starts to get really interesting actually. For investors and entrepreneurs. Watch this space. I think the FinTech space will be the first area for that to really come alive.

Alan Cowley:                    What advice would you have for those entrepreneurs and other entrepreneurs that wanted to get into development or innovation of development countries?

Tamara Giltsoff:              One of the other challenges is that we need to support growing entrepreneurs locally. We're only doing half our job if we're growing all of our entrepreneurs in Britain and then having them build businesses on the African continents. There are entrepreneurs emerging and ecosystems emerging in hubs: Nigeria, Lagos, Accra, Cape Town, Jo-burg is emerging. We need to be on the ground as development organisations and as venture capitalists looking for and seeding and supporting those entrepreneurs locally. But equally entrepreneurs that built businesses outside of those continents. I think that there is opportunity to have a blended combination of those two things. And also to come in, to mix up the talent, so bring in the experience of entrepreneurs that have built businesses in other parts of the world and mix them with the experiences of people who are building businesses on the ground in Africa.

I always say that diversity always wins, and I think the best solutions come from a mixture of backgrounds and approaches to building businesses. You can't expect, as a venture capitalist, to invest at a distance and not understand or get on the ground and really understand how building a business in those markets work. Equally, what we know is those businesses on the ground need venture support. They sometimes need leadership. They certainly need patient capital. I sort of feel like it's not about Britain exporting the best of, but Britain really working with and on the ground in Africa, and that's how we'd get the best of this working. And I think that HMG can see that, but we'll see how this plays out. I think it's a really interesting time, and I think it is an example of where global Britain could unlock some new things.

I will say that I'm also very personally excited in Africa as a continent. I think there's some incredible innovators there. There's an incredible creative and arts scene emerging in Africa that people often overlook. Africa is going to have 25% of the population by 2050. It has the fastest youth population in the world and plenty of big challenges to address, and opportunities to work with. I suppose I would encourage entrepreneurs and investors to work with that, to engage with it and work with it.

Alan Cowley:                    Finally, with your own entrepreneurial hat on, having co-founded a business, what tips do you have for people wanting to get into it or already just starting their journey?

Tamara Giltsoff:              Well, I'm going to start with prioritisation. Going back to Nat Billington, who we've mentioned quite a few times, and this has stuck with me forever and I think it will stick with me forever. And by the way, this applies to any business or any job, and you could apply it to life I suppose. But it's about prioritisation and really focusing on what is important, which is kind of an obvious thing to say, but Nat once said to me in the thick of Product Health where we're building hardware as well as software, our customers were based in sub-Saharan Africa, we had a tiny team in East London. You were right in the thick of trying to make this business. Well, actually not even trying to make the business work at that point, you were trying to validate your assumptions at that point and move from one stage to the next and bring your investors with you. He said to me, "Tamara, just ask yourself every day what is the most important thing you need to focus on today to make the business a success, and do that one thing."

And it's such a helpful thing to think about, and actually it was hugely helpful for me inside DFID, where in a policy environment, you're pulled in all sorts of different directions. It's a very reactive environment because you're working in a political context. And so you might plan to do one thing in the day and you open up your inbox and you've got a thousand urgent actions and ministerial requests, or requests from senior parts of the organisation and advice on something from a completely different part of government to suddenly do in the next four hours, or eight hours, or 24 hours. You can find yourself being pulled in all sorts of different directions and it was quite difficult to apply the prioritisation thing when I first joined DFID because I just wasn't sure what this stuff was, I just couldn't make sense of it, you know, what was the really important ...

But actually I really started to apply it after a while because I realised if I didn't, I wouldn't achieve what I was meant to be there to do, which was to drive innovation through the organisation. That's why really focus on that prioritisation, and I got really good at pushing back on things, and actually quite good at ignoring things until they came back to me a third or fourth time, and then I could validate actually that now is a priority because it's come back to me the fourth time. I think prioritisation is really, really critical.

I think I said this earlier, but I think impact is important mainly because ... I mean, there are some great examples of businesses that have emerged with no clear pain point that they're solving, but I think the most powerful businesses are businesses that are solving a real problem. And you could use that term 'impact' quite broadly. I also think the best investor pitches are the ones that are most personal, where the person that's the founder has felt that pain point somehow. So look for some real world problems that need solving, or real world problems that are actually ... maybe things like ...

It might be about efficiencies, but the efficiencies through say digitisation, I think the InsurTech sector is a good example of this. We know that insurance is full of inefficiencies, full of inaccuracies, totally opaque. Actually, digitising that and addressing those inefficiencies make the services exponentially better. And so, really look for those pain points in the world and go address them. I think it's really rewarding to look for really tough pain points that have ... if you solve them, a really exponential impact. But there's a spectrum, I guess, of pain point, and I think it really holds the team together as well.

I think leadership is critical and you've heard my story earlier of my business partner and the leader of Product Health getting sick. Not in a million years did we imagine that scenario happening. But looking back, I think you need to imagine lots of scenarios happening and you need to, as a business, be able to quickly pivot and respond to situations. And you need a leader to make sense of that. Where all else is chaotic, you need somebody steering that ship. And I think that that was a really important lesson with Product Health.

Design is much more accepted in the business world now as a valuable competency to bring. I think in start-up ventures, we should think of ourselves as venture designers, really designing a solution to some of these problems. And in order to do good design, we know in order to design products that are not only beautiful but that work seamlessly, you've really got to understand humans, or your customer. And I think start-up entrepreneurs should think of themselves as venture designers, solving a problem, and applying the most seamless response to that problem, which by the way never ends because you've got to keep iterating and innovating.

I'm a real believer in diversity, and I always say to people, "Diversity always wins in nature." It's always the most resilient thing. And I think we should think about diversity in its broadest sense, so cognitive diversity. The partnership with Nat and I is a really good example of that. I'm dyslexic. I come from a creative background. He's a brilliant engineer and businessman; I've been operating in business. I have a commercial but creative mindset. He has an engineering and commercial mindset. And the combination of those things, I think, is really interesting. So cognitive diversity, which is a term Anthemis Group, which is a FinTech venture capital firm, have phrased. I love it. Learning style diversity, gender diversity, race diversity, disability, working pattern diversity. I think the most successful organisations and start-ups are the ones that really, really make use of that diversity and end up being much more resilient because of it.

Alan Cowley:                    Tamara, this has been absolutely fantastic. I can't wait to hear what is next for you. I know it's going to be huge, and no doubt in Africa probably?

Tamara Giltsoff:              Definitely.

Alan Cowley:                    Definitely in Africa. I hope you listeners have enjoyed it and thank you very much.

Tamara Giltsoff:              Thank you.

Peter Cowley:                  Thanks for listening to another Invested Investor podcast. You can subscribe to all future podcasts via our website investedinvestor.com, or via a number of podcast platforms online. Remember, you can order our book online, and be sure to follow us on Twitter, LinkedIn, and Facebook to get the most up to date, interesting, and insightful content from the Invested Investor.