Sudeshna
Hi, I'm Sudeshna from The Abundance Psyche, and you are listening to the Not-so-Corporate podcast. Here we talk about all of the not so corporate things that we corporate entrepreneurs do within and outside our work.
Today I have with me, a very special lady who has actually been an inspiration to me without probably even realizing that she was. She is an ex McKinsey consultant turned startup CEO. And she runs one of the coolest, and yet, I think, most valuable of London startups. She runs Koru Kids, which basically, is a technology company that helps parents with childcare. And as a new parent myself, I have realized that this was certainly one of the things that were missing from the startup scene here in London anyway. I'm so excited to have Rachel Carrell with me. Rachel, welcome.
Rachel
Thank you very much. I'm excited to be here.
Sudeshna
Do you want to tell us a bit more about you, in your own words?
Rachel
I grew up in New Zealand. And I grew up in a really small farming town and went to university just locally in New Zealand. Then I was very lucky to win a scholarship to come over to England and do post-grad. So I did that for a few years and then worked at McKinsey, as you said. And then along the way, I got really into healthcare, as an industry.
So my next job out of McKinsey was working as the CEO of a healthcare company. And that's when I had my first baby. And I realized when that happened, how awful the childcare system was. Because most of my career so far had been working in health care, I thought about childcare is kind of similar to health care in terms of a system. And I just couldn't understand why the system was so broken, and why it was so expensive and exhausting, and difficult to find great childcare.
There were wonderful people working in childcare. But there was almost no technology involved. And these kinds of worlds of technology, and startup and product had nothing to do with the world of childcare.
And I thought, there are so many problems that need to be solved in this industry. And so I looked around and tried to find out who was working on these problems, I couldn't find anyone working on the problems. My first thought was, well, I'll go and join them. And then I couldn't find anyone who was doing what I thought needed to be done.
So I realized I had to do it myself. And that's when I found it, Koru Kids. Our mission is really to build the world's best childcare service. And eventually to solve all the problems, and make childcare that is really, really high quality, based on the core ethos that we've been developing about what children need, and what we now understand about child development.
And then training our amazing childcarers, providing it all affordably taking advantage of government subsidies, and wrapping it all up in technology, which makes it really super, super easy to use and find. That's what we are, that's what we've been building.
Sudeshna
That's amazing. And, in fact, I was about to ask you, I was reading about your values the other day. And I think it was a marketing lady and you talking about your values while starting Koru Kids. And I feel like that is something that startups miss so many times.
Your values are such a big part of not only your brand but also help get the most productive bits out of your people as well. So I love that about your mission. So will you tell us a bit more about your values?
Rachel
Yeah, sure. Yeah, I think this is really important stuff to get right at the very start. And I think the reason I cared about it so much was because I have worked as a consultant in many, many different organizations, from government departments to charities, to big corporates, to small companies. And I had seen so many things go wrong. I had experienced so many different kinds of terrible behaviour. People being very political, toxic, rude, bullying, not communicating properly, just all these terrible things, and it's so inefficient.
We leave our families in the morning, and we go out and we spend all our energy trying to get something done. And so often in normal places, you're fighting against each other. What's the point?
There are bigger fish to fry. We are all trying to solve a problem here. So my dream really was to build a company where people never fought against each other, they only fought against the problem. And that's much more efficient. And it's much more rewarding. It's the kind of team you want to lead, it's the kind of team you want to be part of. And so that's what like, from day one, I was thinking,
Okay, well, what is it that I need to do? How can I make that happen, and it goes through everything. Part of it is being very clear about what your values are. And then taking that through everything, making sure you hire the right people, you train them the right way, you reward them the right way, you talk about the right things- it has to go through everything.
So just to give an example, one of our core values is humility. So I don't hire arrogant people not to say that we are not confident, you know, we like and hire very talented people. And it's not false humility. I mean, if you're talented, you should know you're talented. But to me, what humility is really about is having an open mind.
Having a mind open to the possibility that you might be wrong. And this is something I saw in many of the places I worked at. That people were close-minded, and they didn't want to admit that they made a mistake, or they didn't want to admit they weren't the expert, or they didn't know something, or they got attached to their own idea. And all of these things are real problems. And they stop you making real progress.
They are the blockers actually. So instead, what I say is, it is one of our core values... every human being is wrong, like multiple times a day, and we all have so many gaps in our knowledge. All of us. So one of the worst things you can do at Koru Kids. And I say this to every person who joins, one of the worst things you can do is make a mistake and cover it up. Like that's just not what we're about.
We are about being extremely open and honest about the things we know and the things we don't know. Because that's what's going to lead everyone forward as quickly as possible. At the end of the day, we just do whatever it takes to solve the problem as fast as possible. That's what we want.
Sudeshna
That's amazing. So you spoke about organizations where you saw that sort of toxic culture because of the politics or whatever. So tell me, Rachel, while you were leaving, McKinsey, did you know that you wanted to do a startup? Did you know you wanted to start your own thing at some point?
Rachel
Yeah, I always knew that. I think I've always been very interested in business. I think that the I have worked for charities and government organizations and other things, many times in my career, but the thing that I really like about business is there's a real clarity to whether what you're making is wanted.
When I did a D Phil, a PhD, I lived in the academic world for a while. And the thing that scared me about the academic world was, you are never quite sure that anyone actually wants what you are doing. You can spend your whole life like publishing papers, you don't know how many people read them. Do they value them?
Whereas the thing I really like about the business is, if we do a bad job, at creating a target service, people aren't going to buy it. And that's as it should be, right? And then we'll figure that out.
And then we'll build something better. And so it's there's a real like, clarity to know that every morning when I get up, I am doing something that people value. And it's helping people and I know that because they come back to us again and again and again.
So I always wanted that. That's the thing I love about business. And, and so I always knew I wanted to start a business, but it took me ages to find the thing that I wanted to do. I had so many other ideas, many of them were totally off what I'm doing at the moment.
At one point, I was really interested in seaweed, I was going to start like a seaweed food company. But every time I had one of these other ideas, I would get kind of excited about it for a while. But then as time went on, I would get less excited and I'd get over it. And the difference with Koru Kids is the more time I spent on it. I just kept getting more excited. I never got over it. And just got to a point where I was like, “Okay, this is I gotta do this.”
Sudeshna
That's amazing. I love that because I think as quite a new entrepreneur myself, in some ways, I have realized that I get tagged off in different directions. That's what used to happen for the things that weren’t The Abundance Psyche. And once I figured out, this is what I want to do. I keep just getting more and more and more excited about it. So totally understand.
And childcare is such a problem that needs to be solved. So that's great. So Rachel going back to your McKinsey days, then or, or even a bit post McKinsey, I think quite a lot of consultants actually have this entrepreneur bug in them. What would you have told Rachel, who was leaving McKinsey, who wanted to do a startup or a business, but wasn't quite sure? What would be your advice to Rachel from five years, or 10 years or so back?
Rachel
I think it was very helpful for me to do a job in between leaving McKinsey and starting Koru Kids. So I was the CEO of healthcare service. And I did that for three years. And I learned a lot about leading and managing people, hiring and firing, and made a lot of mistakes.
Overall, it went really, really well, and the company grew enormously. It was overall a wonderful success story. But within that, like you are always making loads of mistakes, and you are always going to make them and it's good.
It's good that I got to practice basically before I'm doing it now. I'm sure I'm making mistakes now. But there'll be different mistakes, at least I'm not making the same ones that I made before.
So I think that was good. And then the other thing that was very important about that actually, is it gave me an element of financial stability to be able to launch my own business. I've got friends who are founders in their 20s. Some of them are in there, or even in the early mid-20s. And I have such admiration for them, founding the businesses early on, but it's not something that I personally could have done. I'm just not, I'm not that person.
For me, I had to have certain things sorted before I was willing to take the risk of doing a startup. And the two things that I really had to have sorted- one was, I had to have some financial nest egg. And it took me that amount of time to build that up.
And the other one was, I had to have my relationship sorted. And, you know, I got married towards the end of the time that I was a CEO. And, again, I've got friends who found a business and they're single, and I have a lot of admiration for them. But they exist in this high degree of uncertainty, where their career is uncertain, and their personal life is uncertain. And I think that's amazing. But it wasn't for me, I needed to have one thing in my life absolutely rock solid. And then I could think about having the other side uncertain.
Sudeshna
Wow, I love that clarity, and I love that truth, literally like a truth bomb. Personally, I think I was very much like that. You have to have some sort of anchor in your life. And it's amazing that some people go out and live in that uncertainty in every front. But yeah, I love that concept. So, Rachel, tell me, you were setting up Kuru kids. If I'm not wrong, you were pregnant with your second child during one of the fundraisers?
Rachel
That's right.
Sudeshna
How you manage two young kids along with the startup? Because that's a task in itself!
Rachel
Yeah, it was. It's definitely the hardest thing I've ever done. So I had, I had my second child, right in the middle of the fundraising. And when I say right in the middle- I had him on Sunday, on Sunday and I was doing calls on Monday and I did an in-person meeting on Wednesday it really was right in the middle.
And that was around where I raised £3.5 million. So it was a significant round. And it went really well. We ended up getting I think we got five different term sheets and were oversubscribed by like five times or something for that round.
So it went really well. So how did we do it?
I had a lot of help like this. My whole business, Koru Kids is about helping the family. And it's about realising that you can't do it on your own. You have to have help.
So we did get a wonderful nanny. And also my mom came over and also my husband took two months off work. He works a really big job himself. He works very, very hard. But we are totally 50/50 parents. So this was actually before the nanny- we didn't have the nanny, this was in the first month or in the first few days. He would come with me to the meetings. And he would hold the baby and I was breast-feeding totally throughout this, that baby was not on formula. And, he would sit at the back of the meeting holding the baby. And I did some meetings, breastfeeding at the same time.
I remember there was one meeting in particular with one of the investors- I was feeding my baby. And I had a scarf, I was trying to be discreet, but the baby is like waving his arms and the scarf keeps on falling down and my nipple is very clearly there. And, i'm talking about unit economics with this investor and trying to talk about whether it's four or five or six and stuff. And the investor is trying so hard to ignore what's going on. successfully. I mean, he ended up investing and so fine!
Sudeshna
That's amazing. My God, like, I'm just listening to this- you are a rock star. So tell me about that. Rachel- was it hard to find investors? Because I think quite a lot of times, women particularly struggle in raising funds for their startups. And I have heard of zero women who were pregnant and breastfeeding a child while raising funds. So what has been your experience?
Rachel
Well, it's hard to know, because obviously, it's not a controlled test. Like I've never raised money as a man and as a woman. So I don't really know. But my three fundraisers have gone very well. I've raised £14.1 million, I think in total. And, you know, could I raise more if I was a man? I'll never know, I don't know. But certainly, the statistics are that- not that much VC money goes to women. It's something like 2% or something. It's a very small amount. And yeah, if you add in like mothers, it probably gets smaller. And if you add in mothers who are you know, having a baby? Yes, it's probably even small.
But I think that that mindset- I actually wish people didn't know the statistics. This is a slightly weird thing to say. But I feel like I almost wish people didn't know those stats. Because I mean, it's important in general, for the system that people know them. But for the individual person, when you walk into the room, I don't think you should be thinking about that.
It's not a helpful mindset. If you walk in thinking that you are a victim, you are in the completely wrong headspace, for that interaction. The headspace you have to be in when you have an investment conversation- you have to truly believe that you have an incredible investment opportunity. And you are perhaps going to allow this person to join you in this investment opportunity. Maybe, right?
That's the headspace you have to be in. And if you go in with a begging bowl thinking like, “Oh, you know, I'm just a woman”, it's just terrible.
Sudeshna
Wow, you just turned that on its head like that. That's the difference between a successful startup CEO and someone who is playing victim, I guess. That's, that's amazing. I talk a lot about mindset on The Abundance Psyche. And you actually brought home a very, very important point that the statistics might or might not be true, but don't be a part of the statistic. Be your own statistic in some sense. That's amazing.
And one last question, Rachel, for anyone who is looking to start up a business in the near medium, long term, do you have any advice for them?
Rachel
Yeah, probably a lot. I think a huge amount of what you need to do is known- there are best practices out there. And there are books written and there are startup podcasts, and there are like blogs. And I think this kind of comes back to the humility point. The more you can be a sponge you can have that learning trajectory be as steep as possible.
The slope of your trajectory is much more important than your starting point, right? Like if you imagine a graph, you can be halfway up the graph, or you can be like three-quarters of the way up the graph, which is a big difference. But that will pale compared to the difference in the slope of your trajectory. Then very quickly, you can overcome someone who has a couple more years experience than you by the slope of your learning- how quickly you can learn.
And there’s this saying, I really like that some people have 10 years experience and other people have one year of experience 10 times. And I think that's very true. That is about the slope of their trajectory. They are not not learning. So I think the absolute most important factor is how quickly can you learn that is the absolute most important.
Okay, well, how do I learn more? How do I know faster? And that then becomes, okay, well, I need to seek out people who know what they're talking about on specific questions. And then it becomes, you have to keep questioning, okay, well, then I have to talk to an expert. Okay, who's the best expert, I can get hold of? Okay, cool. That person, right. And then when I talk to them, I have to have the best questions, not just like very questions, I need to, I need to have the best questions, I need to really make the most of my 10 minutes and ask them for recommendations. And if you are constantly thinking, how can I accelerate my learning in this moment? If you're thinking that all the time, that's going to be the single greatest factor, I think!
Sudeshna
Wow. I love that! Being a true learner in the most honest way possible. I guess that's what you're saying. This has been such an honour. Rachel. I'm so glad that you decided to join in. Tell me you were expanding Koru kids. Are you in London right now? Or were you expanding to the States? Where is Koru kids right now?
Rachel
We're currently in London. We will be in 2021. and expanding beyond London, within the UK. We're also expanding to two younger kids now. So traditionally, we have been all about children aged 4 - 10. But we're now expanding into the toddlers as well, which is very exciting. So we're doing a lot of work there because you need a different kind of nanny and you need to think about it differently for those younger kids. But that's going to be a very exciting thing in 2021.
Sudeshna
That's amazing. So if any of the London and UK parents are listening to this, go check out Koru kids. The most amazing startup I have heard of in London, honestly, like it solves the real problems of childcare. But also, I think quite a lot of people talk about feminism. And without sorting childcare, I feel like you can't solve the bigger problem of feminism. I don't know what you think about that.
Rachel
No, I totally agree. And for me, it is, it is the unlock- it is the thing that unlocks wage gap and female leadership and then female leadership unlocks a lot of other stuff. I think one of the things we've seen over the last few months is a cabinet that has hardly any women in it, a government that has hardly any women in leadership positions.
And they just make different decisions and they make decisions about, for example, homeschooling like this, it's a bunch of people who are not experiencing this and their friends are not experiencing the consequences of homeschooling, and those are the people making the decisions. I think if you had lots of women in high leadership positions, we would not have had that A levels fiasco, I just don't think we would have, because women do make decisions differently. I think we've seen that very clearly, actually, in the pandemic.
I have a wonderful example in New Zealand where we have a wonderful, empathetic female leader. So I feel very passionate about the importance of females in leadership positions. And that is a huge reason why I'm passionate about childcare because childcare is a key unlock.
Sudeshna
That's amazing… I honestly feel very, very strongly about that as well. And which is why I was like, right from the moment, I think I heard of you and Koru kids. I was like, This lady is just amazing. She is not paying lip service to the problem, she's actually going out and helping parents and women get there by taking care of the thing that is probably the closest to their heart. And the biggest….I don't want to call it a burden because children are so fun, but also the biggest part of what holds women back in some sense. So no, thank you so much for sharing that with us. And if you are a parent, new parents, parents of slightly older kids, go check out Koru Kids if you are in the UK. This has been such an honour. Rachel, thank you so much for coming.
Rachel
Thank you!
Sudeshna
Thanks. That's it for today. If you liked that, if you have any thoughts, comments, leave them down below. If you enjoyed this, share it out with your friends. Don't forget to hit the like and subscribe button and I'll see you next time.
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