‍Simon Brewer  02:31

We may as individuals occasionally imagine how we would deal with a life-changing catastrophe. But when you say goodbye to your 14-year-old son and he goes to stay with friends, never to see him again because he suddenly dies of meningitis, such a tragedy cannot start to be imagined. To establish a charity in his memory that has been a prodigious success and continues to improve so many others’ lives is simply extraordinary. I cannot imagine how one moves forward, let alone set about this undertaking. So in this Money Maze Podcast episode, Justin Byam Shaw, father of Felix, is a very special and particularly welcome guest. So welcome, Justin, today.

Justin Byam Shaw  03:12

Thank you.

Simon Brewer  03:13

Justin, I hope today we're going to talk about this groundbreaking charity your family began and how you have collectively developed it into such an immense force for good. But we also want to intertwine that with your very relevant business skills and successes as the highly accomplished entrepreneur you are and understand how you deployed that experience to help turbocharge the charity. It's not every week we talk to somebody who's bought and sold media businesses so successfully, including buying The Independent newspaper in 2010 and making such a success in an industry fighting immense structural headwinds. So let's jog back. Help me put the jigsaw together because you went to Oxford in the early 80s. And why Oxford? And what did you go to study?

Justin Byam Shaw  03:56

I went to Oxford to study classics, which everybody told me would be good for nothing. But actually, the thing about classics is it really teaches you to assimilate a lot of information quickly and make sense of it. It orders your thoughts. It wasn't the obvious training for advertising, which was my first job. I was a graduate trainee, as you mentioned. I was possibly the worst graduate trainee they've ever had. I was allowed into the telecopy room once a week on a Friday, which was to send a message to my client in Canada and that was pretty much my only role and I left after about a year and a half, probably a few weeks before they would have fired me. I was not an advertising person at all.

Simon Brewer  04:34

So you go from O&M to BT. That was an interesting decision, wasn't it?

Justin Byam Shaw  04:39

It was. If you're my age, going to work for BT out of Oxford in 1984 even though BT had just been privatized, was about as unglamorous as could be. All the rest of my friends were in investment banking and management consultancy or going to work at the BBC and BT, called Buzby in those days, was super unglamorous. But the great thing about it was they gave a 24-year-old, my amazing boss there gave me extraordinary freedom to try and build, it sounds a bit crude now, but to build telephone revenue from media companies. That led to the start of my first business. It's an odd story. My partner went to see a producer at the BBC of the talent show called Opportunity Knocks, which was the precursor of all these talent shows you see now. But in those days, voting was by postcard. And my partner said, ''I know you get 300 postcards a week from viewers, why don't you try putting on the telephone, connect it to our computer, and we'll be able to tell you in real time what results you get.'' Amazingly, they agreed. And after the first show, several months later, rather than 300 postcards, I can't remember if it was 300 or 400,000 calls, but it was dramatically different. And my partner and I left the following week to set up our own business doing this and other things for television stations around the world, in fact, in about 14 countries. So that's a positive summary.

Simon Brewer  05:59

Very brave, though, or simply did you have nothing to lose?

Justin Byam Shaw  06:02

Totally, utterly idiotic. I was like a boy band. We borrowed against our flats, I think, £250,000. It's so easy today. Of course, all our money was spent on computer equipment, which would now cost about £2,000-£6,000. But in those days, we needed about £400,000 for computer equipment and we raised £250,000 from putting our flats on the market and then £150,000 from the syndicate of golf club members who had a deal whereby had we not repaid them at an 18% interest within 18 months, a 20% interest, I think, at 18 months, they would take control of the business and I think we were left with 10% of the shares anyway. We amazingly were able to repay them with about a month ago and we got out of that, but boy did that teach me about early stage investing and starting businesses. It was a painful, frankly, frightening experience which turned out incredibly well. We built the business up over seven years and sold it to Matra-Hachette in 1994 very well but we did have the benefits of partnerships with blue-chip media companies all over the world. It was a bit of a full storm for me, to be frank, made me think I was Superman, which I quickly found out I wasn't. It was a wonderful experience. I think I was a very good starter of things, good ideas person. I think by the time I was trying to manage 150 people at the end of it, I was really struggling.

Justin Byam Shaw  06:02

Do you think that is a comment that resonates with lots of entrepreneurs is the idea is born, the early growth is there, it’s absolutely at the center of their activity, but it becomes much more difficult to manage and in doing so requires different skills?

Justin Byam Shaw  07:34

It does. My own personal view is that we massively over reward ideas from startup entrepreneurs. Very often those ideas don't quite work out as they are intended. By that stage, the entrepreneur has very often fallen out with his board or his investors, and a more professional manager comes in and either does or does not build the company to success. But the entrepreneur has a retained stake. And I always think that innovation of process is much more valuable than innovation of concept, in other words, the idea for a business. If you look at Google, or Facebook or Amazon, none of them were innovators in terms of their idea. There were other people doing what they did before they were, but they were much, much better. That's the process of running those businesses.

Simon Brewer  08:15

So Justin, staying with media, you were chair of ESI Media and one of the buyers of The Independent in 2010 for I think it was £9 million. It was quite close to being shut down by its owners. It was a very low circulation newspaper and buying a failing newspaper in a really challenging sector must have had a lot of people scratching their heads. What was it that you thought you saw?

Justin Byam Shaw  08:42

First of all, we actually paid minus £17 million rather than plus £9 million. So that helped. It had been hawked around for years. It was a wonderful charitable enterprise for most of its life. A great idea, a brilliant newspaper, but never profitable I think for one year of the 24 years before we bought it. But to me, it was already clear the way the wind was blowing, and that this was a wonderful platform for a strong digital business. At the time, it was the absolute Cinderella of the industry. I think we had a circulation of 70,000 fully paid sales, which is kind of minute. So we knew that even if we raise sales by 20%, 30%, it wasn't going to make a material impact. At that time, 2009-2010, newspaper industry was if not imploding, severely challenged by falling classified and display advertising. We had a rather brilliant managing director who I should name check, Andy Mullins, and he worked in FMCG all his life before coming to newspapers. And he had this idea for a line extension, which was basically a concise, cheap, cut-down version of The Independent which people could buy for 20p and they could read in 20 minutes, taken straight from FMCG marketing actually, that idea. He believed that we could produce this on a marginal cost. What I mean by that is rather than the 180 journalists we had at The Independent, we'd basically have our subbing team and I think four or five journalists who would repurpose that content for this new concise title. Everybody thought we would fail. But in fact, the i, as it was called, turns out to be the only profitable national daily newspaper launch of the last 50 years in this country at a time, as I say, when newspapers were really struggling. And one rival, a pretty trenchant other newspaper provider called me up and said, ''You're bloody crazy, you're going to fail, you're not going to do 10,000.'' And he bet me his Rolls Royce that we wouldn't do 14,000. In fact, we did 250,000 circulation. And I didn't take the bet. I was the loser in that. But that gave us breathing space, it gave us the ability to close The Independent newspaper and take it digital only. People thought about digital first, I don't believe that at all. If you work in a newspaper that has both a website and a newspaper, your focus, your prestige is considered to be in a newspaper. So all your activity is channeled towards the seven o'clock or whenever it is of phone time in the evening. We needed our journalists digitally aware, digitally savvy, producing content that was relevant throughout the day. And that focus, that absolute relentless focus on what we were doing, has meant that we've grown revenues at 20% a year on average since 2010. We've been consistently profitable, and what surprises many people, we have the biggest audience of any quality title in the UK. And by that, I mean bigger than The Times, bigger than The Guardian, bigger than The Telegraph, and that includes print circulations in the UK. In the US, we're the number 8 news site at the moment, with an audience of about 200 million monthly. We think it's the only successful transformation of a leading newspaper anywhere in the world. And it proves this is the future of newspapers. I don't see anyone reading newspapers in 20 years time for many reasons, not only for environmental as well as the obvious economics of going through this incredibly Victorian process of printing on dead trees, remotely getting your product around 5000 outlets around the country by van and by rail every day. You have to create this product from scratch every day. That is not a sustainable format in this country.

Simon Brewer  12:13

That's very clear. And as I was thinking about the challenges to your industry, I was keen to ask you that good quality content costs money, and yet at the click of a button from Facebook to Twitter, particularly younger people can access all sorts of content with very variable quality. How do you think about that paying for quality?

Justin Byam Shaw  12:40

It just wouldn't work for us. We could get endlessly more clicks if we wanted to but that's not how we're positioned. Our big area of growth is in the US where in fact we're much bigger outside the UK than in the UK. And we're seen as an internationalist, possibly slightly left of center but liberal quality operator and that quality branding is critical for us. So we simply can't chase BuzzFeed type lists that others can for content. That would be really damaging for the brand and the legacy. And frankly, we've retained many great journalists from the newspaper and we've recruited many brilliant journalists as well and that's not the content that we're in business to do.

Simon Brewer  13:17

I understand that. We're obviously in the middle of a huge change in content delivery and we've got added to that a slowdown which is hitting ad revenues around the world in this industry and others. And I looked at the share prices of Alphabet, Fox, Facebook, Comcast, etc., and they're all weak. Maybe some of them started with quite high ratings before we went into this bear market. But is it more than weak advertising revenues that you think that are unsettling investors about this sector?

Justin Byam Shaw  13:48

It is but it shouldn't necessarily be the case about digital news operators. Our fastest growing parts of our business are not in advertising. We have a very strong licensing and syndication side to our business. We have a really interesting and growing e-commerce business. So there are other areas that for us are much more important than advertising. And I completely agree with the suggestion behind your question that advertising is not where media companies want to be in the future. It's the first to go and in fact, the fascinating thing about this coming recession, which I'm afraid is a coming recession, is nowhere is that picked up sooner than in the classified property advertising pages of media organizations and newspapers. It's an absolute bellwether for what's coming next, and it's not where we want to be and increasingly where we are not.

Simon Brewer  14:30

Let's switch to your charity, an enormous success. The Felix Project is London's largest food redistribution charity. You set it up in 2016 and as I went through some of the work that you've put out, I thought the best place to start was with the food stats. You say that a third of all food produced globally is wasted and then in the UK, 93% of our waste food actually goes to anaerobic digestion plants and landfills, which is completely the opposite of France, where they recycle 10 times as much food. Just lay it out for us. What is the situation?

Justin Byam Shaw  15:09

You said it all, Simon.

Simon Brewer  15:12

I read your research.

Justin Byam Shaw  15:13

It is completely crazy. Really what attracted me as an entrepreneur is this massive mismatch in supply and demand. Three million tons of food is wasted by the food sector in the UK. Just 7% of the edible surplus reaches charities and people and as you quite rightly say, that means 93% ending up in a landfill, getting burnt, or in anaerobic digestion plants which becomes fertilizer for crops, rather than feeding people. That is wrong economically, wrong socially, wrong environmentally. It is completely crazy and has to change. There are some food companies that are taking this seriously, measuring their waste and trying to do something about it and others, frankly too many, that are not. So there is Courtauld 2030 Commitment by the food industry to reducing waste and measuring stats. Only 25% of the food sector by value has signed up to that. And that self-regulation in the food industry at least doesn't work. I'm not somebody who would be really demanding or suggesting legislation, but something has to change in this country, and in fact, globally. If it was a country, that would make food waste the third biggest culprit in the world, in terms of waste. Maybe 10% of CO2 emissions around that number are produced because of food waste. Think of all the energy and water and transport costs that go into getting food to us, to Waitrose or wherever, and then to us. And then think of a third of that being thrown away. That sort of linear economic model of make, consume, waste just isn't sustainable. Actually, it's the generation below me that's understood this I think better than our generation and is in the Vanguard for recognizing this is not a sustainable situation.

Simon Brewer  18:40

You made an interesting point in some of the work you've put out, which is that whilst France has a much better number and it's enacted legislation, you don't think that's the right way to go. So just help me understand why that is.

Justin Byam Shaw  18:51

From a personal point of view, I'm wary of biting the hand that feeds me, and we get fantastic support from the food industry. Just throw that out there, first of all. And actually, as a rule, our suppliers, by definition, take this much more seriously than those who aren't. But in France, there is a law that requires supermarkets to prioritize donation over any other form of disposal. And as a result of that, 10 times as much food reaches charities, but I'm against that for the reason I've just given you and also, I'm not sure that we should be in the business of telling the food industry what it should do. I think it has to get to that point itself. And oddly enough, people beat up on the supermarkets. Their level of waste is very low, 2%-3%. There are other sectors and farms unfortunately, like for instance, lunchtime retailers, most of them are dumping food in a black bin bag on the street at the end of the day, and in some cases, they're bleaching it so that there's no secondary market or people can't access it. And that is a total scandal. In London, we're having black bin bags on really good, really high quality as you know if you've ever had lunch in any of those places, really good quality food that is ending up in landfill because it's in a black bin bag. That's a scandal and I feel that sooner or later, government local authorities will act on that.

Simon Brewer  20:05

That's the supply side of the equation. Let's talk about the demand side because you quoted some figures from McKinsey. And in fact, we've got the McKinsey Senior Partner Michael Birshan appearing next month on the show and they had forecast a little while ago that 100 million meals were needed in London to address food poverty and that can only be getting worse. How do you calibrate this demand side of the equation?

Justin Byam Shaw  20:26

There are 100 million and McKinsey have worked for us pro bono for a number of years and have given us really good insight into a number of things. But that 100 million meals figure was pre-COVID, pre-lockdown. We haven't really cut it, but it's likely to be much more. In 2019, we were distributing about 6 million meals. By the end of 2020, it was the equivalent of 24 million meals, so four times that. And I saw for myself in places like Chicago Square, some of the charities that we've been supplying were the food queues had been 10 strong, they were stretching around the block. That's very anecdotal. But here's a couple of facts that often surprise people, that in Tower Hamlets, where we have our kitchen and our fourth depot, that is officially one of the poorest urban areas in Europe, right up there with Bucharest. My other fact that always surprises people that this morning in London alone, 70,000 children went to school hungry. And what I mean by that is they'd had no breakfast. And that's kind of shocking in one of the richest cities in the world, in one of the richest countries in the world. So people are often surprised by the level of food poverty in this country and in London. And I always try and encourage them to come out on one of our vans or come to one of our depots and see for themselves. It's bad and obviously it's getting worse. Many people will have read about the hard choices that households are going to have to make between food and fuel. Actually, there's been big food price inflation this year, and yet food sales have dropped. So that tells me not only are people trading down, but people are going without, and we're hearing this anecdotally a lot from the thousand charities and schools that we supply. So this is going to get a lot worse this Christmas and in four weeks’ time, the night shelters will start opening as it gets cold. We'll really see for ourselves as The Felix Project, how much worse this has got. And I'm not by the way, in the business of disaster mongering. That's really not what I want to do. I'd love to see a match. And actually, as a note of optimism, I believe food poverty in this country is totally solvable. If we can sort out food surplus, food waste, we can solve our problem.

Simon Brewer  22:33

I did a food pickup and delivery one night a while ago with my daughter, Lara, and we saw both ends of the collection and the delivery.

Justin Byam Shaw  22:40

Where did you go, Simon?

Simon Brewer  22:41

We picked up a van somewhere near Kensington and we picked up from Tesco and we picked up from Gail's and another supermarket chain and we went to a shelter and we went to Islamic Center and we went to another homeless place. And it was only one night so I can't say that it was an exceptional contribution to your charity, but we did see it firsthand.

Justin Byam Shaw  23:04

Sounds like you were in Zone 1 from where you were picking up. You won't be surprised to hear that it's in South East London, places like that, that poverty is at its worst, not Zone 1. Of course, there are homeless shelters here as well. This is an interesting fact actually, but homeless people tend to congregate in the center of London, not outside because that's the easiest access to food and shelter.

Simon Brewer  23:23

You've explained the supply and demand beautifully. Let's just talk about the charity. Why did you start this charity?

Justin Byam Shaw  23:31

I was thinking that you would ask me this question and I was slightly pretentiously remembering a poem that I loved at school by Philip Larkin, about somebody who throws an apple core at a bin and misses. And then Larkin's poem is about why he missed and it takes it all the way back. In fact, it gets all the way back to the Garden of Eden on original sin and Eve giving Adam an apple. Mine doesn't go back that far. If I'm honest with you, I can't tell you that this is the reason because obviously, as you've said, the project was started in memory of Felix, and the logo is in fact his signature on a Mother's Day card. But I do remember taking him to a football tournament when he was 10. They won their first match easily and I'd been involved in setting up the charity that had sent the opposing team boys from southeast London. So I said to him, ''Felix, only three of these boys had breakfast this morning.'' In fact, I knew that they had three. He was very moved by that and took them all to buy ice creams. Is that the reason? I don't know. I think it is part of the reason. But I'm an entrepreneur and I think it was incredibly attractive to me to see this massive mismatch of supply and demand that I could do something about. I think that was probably the reason why I started this charity. I saw an example of it run by a wonderful guy in Oxford, much smaller. That gave me the idea. So actually, it wasn't an original idea, as I say, but I think we've executed it well and want to take it further.

Simon Brewer  24:52

If you were to summarize the mission in one sentence.

Justin Byam Shaw  24:56

We want to optimize the social good, the social purpose, of food waste. We want to help solve food poverty by countering food waste. As I said earlier, I think food poverty is solvable in this country. Food waste is not. We will probably collect and redistribute the best part of 20,000 tonnes this year. I think I told you earlier that the sector has a surplus of 3 million tonnes. That's just the food sector. Of course, you and I are also great wasters of food.

Simon Brewer  25:25

Why do you think people are less aware than maybe they should be about food waste?

Justin Byam Shaw  25:33

The generation below me are very aware. Tesco and Sainsbury's, it's usually top three amongst customers’ concerns, food waste. Both those supermarkets run great campaigns to help their consumers waste less. So I think people are much more aware of the need for a circular economy than the linear economy we find ourselves in. I think that's changing fast. We're a little boat that's ridden that rising tide.

Simon Brewer  25:56

When you go from the drawing board to execution, what were the biggest initial hurdles?

Justin Byam Shaw  26:01

The biggest hurdle probably was that we knew that we wanted to be a volunteer driven charity and we've got over 1500 volunteers now. And there is an implicit tension between maximum efficiency and volunteer's attitude. So we are in a way a logistics business. I am not a logistics person. I don't want our depots to look like an Amazon warehouse. Great company that Amazon is and a great supplier of ours but that's not what we want to do. We have to accept there is that implicit tension and that implicit compromise in our efficiency. If you ask a volunteer to drive back down the street that he's just been in his locality because our route optimizing software tells him to do it, most likely he won't do that because he knows that area and he does not want to drive back down the same street, even though we know it's the right way for him to do it. That's a silly example but it's a nice example of a big challenge we had from going from the feel-good small charity, let us spread the love and do good, to one that is now quite a big operation, as I say, redistributing the best part of 20,000 tonnes this year, which is the equivalent of the best part of 40 million meals. That's a big operation and there is that tension. So that was one of our big challenges. But we've recruited well. The great thing is, as I said earlier, don't stick with your founder to manage your business. Your founder probably has other skills and we've got a great senior management team.

Simon Brewer  27:24

So we've got a lot of senior executives who listen to the Money Maze Podcast who have been in business but also have a charitable responsibilities and sit on boards, I myself have sat on a couple of charities, and it's easy to think you're doing good and you are lending authority and experience. But practically for you having run and built businesses, what were the specific skills you could take from your commercial life that you're able to apply effectively into this charity build out?

Justin Byam Shaw  27:52

I've certainly always been completely fascinated by innovation. And we had to innovate at The Independent, we had to innovate at the Evening Standard endlessly. Frankly, we were in battlefield mode from day one with battlefield promotions and that taught me not to be afraid of risk and to realize that with what I wanted to do, we would have to innovate constantly. Probably I'll answer your question in the generality, but I want to give you three examples of how we used innovation and my real belief in innovating of process to get better, be better, be bigger. We knew that there were people like you who worked hard in central London who didn't have time to volunteer in the day. We knew that there are a lot of lunchtime retailers out there producing great quality food that was ending up in black bin bags and wasn't good for the next day. So we set up a virtual operation which you took part in though you don't know it was our only virtual operation, i.e., not a depot and no plans going collecting and delivering. We were collecting from our supplier and taking straight to a charity. That was a nice bit of innovation that's enabled us to open up a completely new sector, address a whole new sector that we weren't before and bringing a whole load of volunteers into the market. More interesting is an app that we've developed for farmers. I mentioned that they're in percentage terms, the biggest creators of waste. And especially last year, with the lack of pickers they were plowing a lot of crops back into the land or they were letting them rot. We now have a farmland app that allows them to collect to us and others when they've got surplus. And hope is that they'll be able to use that app to get something for their surplus, the minimum price, from an end user. So that's the game. It has really revolutionized for us. We opened up a new area that we can access by using technology. But the most interesting of all is a kitchen that we started last year, which is the biggest social kitchen in the UK and it's going to be the biggest social kitchen in Europe where every day we make 4000 really high-quality meals from surplus food and send them out. Why did we do it? Two reasons. One, we could see that there were people that maybe they had the money to buy food but they simply didn't have the means, old people, also people living in hostels, they needed good quality food. We also saw there was a significant amount of waste that was very short dated, i.e., right up against its use by date, but couldn't be used by anyone else, by any other charity or not-for-profit group and wasn't going to get sold, which we could use. The mass tubs of tomato sauce that's not on its last day or olives or whatever, that was right up against its use by date. They come to our depo midnight, the kitchen staff come in at six, seven o'clock. They don't know what they're going to cook, they see what there is, and they've made 4000 meals out of whatever they've got by the end of the day, and off it goes. So that was innovation. Coming back to the more general question. I think, oddly enough, I get surprised how entrepreneurial and helpful the finance sector has been to us and how much they've got what we're doing in a broader sense and supported other people. And as a result of that, quite a lot of senior people from the UK finance industry have gotten involved with us. And I have really valued the perspective that they bring and real-world experience. Very often if you're recruiting for charities, you're recruiting people who have only had charitable experience, and they often will think in a different way. I was quite snobbish about the finance community. I thought fund management, that's what you do, you don't do anything else. A, they've become very generous friends and supporters but B, they've got a lot of skills that I wouldn't have expected, from marketing, especially with fundraising and of course, extraordinary networks that I and the most of people involved with Felix Project don't have. So there's such a wide range of ways that successful people can do something and just by being successful and being experienced, you have assets that frankly most people don't have. They're transferable, as I'm sure they know and you know.

Simon Brewer  31:37

That's why I wanted to touch on the fundraising as opposed to the execution of the food equation because I did a charity bike ride for the Felix Foundation in Croatia with Quintessentially about four years ago.

Justin Byam Shaw 31:48

I didn't know that.

Simon Brewer  31:49

But it's small beer and I know now you have Morgan Stanley as one of your charitable donors. What is it that the listeners to the Money Maze Podcast, many of whom are in positions of interest and influence, what would you like them to think about and to do after listening to this podcast?

Justin Byam Shaw  32:05

I don't often get asked that. First of all, by the way, your bike ride was not a small exercise because it was run by an extraordinary guy, Ben Elliot, who you will know. He has raised a huge amount for us over three years on that bike ride. So don't do yourself down on that. What we would love people to do is of course, they may have a charitable foundation, there may be a charitable foundation connected to their organization, they can encourage their staff to come and volunteer with us. And I have to say volunteering is pretty good fun. You can arrive at Poplar, you can be working in the kitchen in the morning preparing food, you can then sort it in the warehouse, you can go out and deliver it to people who really need it in the afternoon. And we find a number of corporates finding it's a fantastic team building exercise for them and we value getting to know people. What we really love is those people are inspired who've come along and then become our regular volunteers. Because once they become knowledgeable, it becomes so much more valuable to us. And then the third thing, as I alluded to earlier, is a lot of people who will watch your podcast will have extraordinary networks. It may not just be funding networks, it may be networks in the food sector. We can never get enough food. We have a machine now that can absolutely take whatever food is thrown at us. So I think it's those three things, of course, funding or access to funding through foundations or even individually, volunteering. Staff volunteering is incredibly valuable to us and also, of course, getting access to those people's networks.

Simon Brewer  33:26

So Justin, it's so difficult for so many of us to even envisage this but October 2022 is upon us. What does this poverty feel like to the many?

Justin Byam Shaw  33:38

I think many people underestimate the intellectual and emotional energy that is expended in just being poor. If you have to think about how you're going to pay for dinner that evening, how you're going to pay your rent on Friday, you often have little space to think about anything else. That's a stressful situation. It affects not just you, but maybe the development of your child as well. People sometimes say bad choices lead to being poor. I think it's the other way around. I think being poor leads to some bad choices. And the situation we have now is I've just seen that food inflation has gone above 10% but sales are falling, which tells me two things that people are trading down but people are also going without. That's an odd juxtaposition of the facts, sharply rising food inflation and falling sales. The great writer Daniel Kahneman has shown that the negative effect of taking money away, taking a dollar away, is twice the effect of the positive effect of adding a dollar to someone who has very little money. So for instance, if you have an extra five pounds a week, you can maybe start to save for a new pair of trainers for your child. But if you have five pounds less, as winter comes and as the first new fuel bills hit next month, you're going to have to make some very hard choices between food and heating and in some cases, you're going to have to make the choice against both and that's obviously very bad for you both physically and psychologically. It's an interesting fact also that the Food Foundation recently reported that if the bottom 10% of households were to comply with standard healthy eating guidelines, they would have to spend 74% of their income on food. It's just not possible.

Simon Brewer  35:18

Well, that's very clear. We've talked about the whole charity and its ecosystem. This is a non-trivial operation with substantial fixed costs. How much does it cost to run this charity each year?

Justin Byam Shaw  35:33

It's an expensive business. We do have this huge number of volunteers and we are a voluntarist organization. But we also have depots, four of them, a kitchen, 130 staff, nearly 50 electric vans with refrigeration units inside. It's an expensive business. This year, we'll spend nearly £10 million. And I can tell you, we're not raising that. So we also are going to have to make some hard choices unless things improve.

Simon Brewer  35:56

Great. Well, thank you for that clarity. Justin, I'm going to move towards a conclusion with some very general questions in no specific order. It could be a bit like a modern-day version of Opportunity Knocks. I think I read that you had invested in the dotcom era in a business that went from a zero value to something like £400 million back to zero. I may not be exactly right on that, IPO or bust. Are there some parallels with today and what advice would you offer to people who have helped finance such ventures?

Justin Byam Shaw  36:23

I certainly think last year it was kind of mad, wasn't it? There are all these businesses filled by private equity that were never going to work. One of them was next door to us in a warehouse in Portland, though not mentioned, the madness of business model of unicorn status companies which could never possibly work. As I said to you earlier, I came out of my first business, Legion, thinking that I knew it all, and I was quickly disabused of that. I did have a very large fortune and very quickly and I wised up pretty quickly about what were my criteria for investing. I got a lot smarter about that and a lot tougher. I don't think we're in the same situation now in terms of valuations. I think people understand what tech can do for them. The internet was scarcely working in 2000. It was a long way from now. Now, I think there are many great models. I don’t believe we’re in the same situation as the absolute craziness, the wild west of 2000.

Simon Brewer  37:12

So young folks who listen to the show thinking about careers, you've seen lots of businesses, what general advice you want to give to young people thinking about careers?

Justin Byam Shaw  37:21

It is a brilliant time to be an entrepreneur. I mentioned how expensive it was for me to do it, in terms of the IT infrastructure that I needed to assemble. It is a brilliant time. You can start a business so easily. However, 9 out of 10 of you will not be suited to it. On the one hand, it could not be easier. On the other hand, unless you are really hungry, you're not doing it for lifestyle reasons, that you are going to give it your absolute primary focus. For me, my first business was like a partner. Unless you're able to give it that absolute emotional engagement and intensity and focus and you know why you're doing what you're doing and you have the flexibility to realize that your original idea probably was wrong and you need to change that and do all that or move at the same time as you're doing the next round of fundraising, and you have the emotional stamina to do it, then do it. Don't do it on your own. Get a partner. You need someone to share the emotional load, especially when you're battered. When you're a bit older and a bit longer in the tooth, then you can do it on your own. So find someone who wants to do it for exactly the same reasons as you do, the right reasons, not the wrong. And the idea is not the thing. Take someone else's idea and do it better. That's the way I'd go. I invested in early-stage ventures for about 30 years, and I very rarely invested in a new idea. It was always why someone could do something better, and then could create a sustainable point of difference and could scale that idea easily. Those are my three criteria. So if you've got those, and you've got the right characteristics.

Simon Brewer  38:45

I understand you were lucky enough to meet the Pope on your travels. How did that come about?

Justin Byam Shaw  38:48

I think probably a case of mistaken identity. I was invited to the Vatican to meet the Pope and thanked for what I've done for food poverty in his country. And I realized that he doesn't really speak English and I don't really speak Italian. So my excuse is I was interested and glad to be there and glad that we got on his radar, but we are definitely not yet in Italy. But it was one of the more extraordinary meetings I've had, I think, possibly the most. And I do realize that we have a fantastic model now. We have very high-quality health and safety protocols. We do things well. We know what works, what doesn't. We have a good operating manual. We have suppliers that are national. We have end users, charities that are national. It is very clear that for us whether nationally or internationally, we can grow by franchising what we have and that's probably the way we will do it rather than investing ourselves again in bricks and mortar or rent sometimes.

Simon Brewer  39:49

My partner Will Campion is a good friend of yours and was a trustee of Child Bereavement UK and a difficult question, Justin, but do you have any advice for others who have to confront such an awful horror?

Justin Byam Shaw  40:03

Obviously, I've thought about this a lot over a number of years now. I think grief is absolutely sui generis. And what I mean by that is that everybody's grief is different. Everybody deals with it differently. The Queen said it's the price we pay for love. And the only thing I can say is its exact counterweight. How much you love is how much you grieve. But how you deal with it, I remember at Felix's memorial service saying it's now what we do now and not really believing it that matters as it happens. I did this, and Jane did this. It's not for everybody. It's incredibly emotionally demanding to start a charity that contains the name of your son and is everywhere. As I say, his signature is everywhere and many people ask me the questions that you've asked. So for me, it was a great way of something coming out of what happened. But is it right for everybody? No, it's not. People find different ways of dealing with their grief. I've evolved several and this is one, but I can't recommend it for everyone.

Simon Brewer  41:06

Justin, The Felix Project is an extraordinary success. And I use the word ''is'' because this is not a closed chapter, this is the beginning of something that can grow and be much bigger. So I'm going to say having cycled for the project and been a volunteer only one night, and I'm going to get my other two children and do some more, is just get involved. And I mean that because it is such an important thing and it is so immediately impactful. I've written down 70,000 children in London had no breakfast. We have no idea most of us who are so fortunate. Just keep at it and we really hope that the Money Maze Podcast listeners will be able to think about how they can help in the obvious and the less obvious ways. You need volunteers and you need food supplies. So that was number one. Number two, I love the fact you say for people to think about being an entrepreneur, but equally not to do it on your own. It isn't for everybody to be an entrepreneur. As you said, building computer systems at great cost aren't a requirement so barriers to entry in some things have fallen substantially and so that creates terrific opportunities. I think that's very good advice. And for investors in all sorts of ventures, you said the idea is not the thing. Find a good idea and copy it and just execute it well. And your examples of Facebook and Amazon and others are absolutely on the money. So you've given us great insights. I'm really, really grateful for the time you spent today and some great advice. You're doing some great work. Justin, that's it from me. I can only say thank you and the very best of luck.

Justin Byam Shaw  42:39

Well, thank you so much, Simon for having me on. I've really enjoyed it. I'm very grateful for the platform. I haven't told you this, actually. I've become a bit of a Money Maze addict. I started slowly. I now find a lot of really interesting speakers you have on. Anyone who doesn't listen to this should listen to it more often. Probably not me, but the next speaker.

All content on the Money Maze Podcast is for your general information and use only and is not intended to address your particular requirements. In particular, the content does not constitute any form of advice, recommendation, representation, endorsement or arrangement and is not intended to be relied upon by users in making any specific investment or other decisions. Guests and presenters may have positions in any of the investments discussed.

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