This Good Unicorn Reduces Food Waste By 99% While Sharing Profits With 95% Of Its Employees

40% of food is wasted. Food Tech Good Unicorn Gousto has brought that waste down to 0.4%. All while empowering 95% of employees to be shareholders and achieving a $1B valuation.

Gousto checks all the boxes for a Good Unicorn. Its mission is in service of the UN’s Sustainable Development Goal of creating more “responsible consumption and production.” The company is a certified B-corporation, joining a global community of businesses who meet the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose. 

Let’s dive into the deep end with founder, Timo Boldt!

Diana Tsai: Hi Timo! So just to give you a bit of context. I research and study Good Unicorns, not normal Unicorns. And when I first started the journey, I wasn’t sure if there were actually any Good Unicorns. So I was going through the list of 835 Unicorns, and I found 48 that might be Good Unicorns. And it’s been quite a beautiful series of interviews so far. Each conversation just gives me more faith and hope in the world. So I want to start with some a big question for you: how is your company changing the entire system? What kind of systemic change are you tackling?

Timo Boldt: 40% of food is wasted. We’ve gotten it down to 0.4%. We are taking food waste out of the system by crafting & delivering healthy, zero-waste, affordable meals. Our purpose is to have a positive impact on people and the planet. 

Tsai: Whoa wait you’ve gotten food waste down from 40% to 0.4%? How?

Boldt: By creating a fundamentally different supply chain. If you’re a large supermarket, half the stuff gets wasted along a very long supply chain of international suppliers, buyers, shippers. Whereas, we just go to the farm, and we only buy what we really need. So there’s no food waste. It’s a very short supply chain. And then we use technology, forecasting algorithms, we’ve built order routing, algorithms, all this fun stuff to safeguard our zero-food waste mission.

Tsai: That’s incredible. I’d love to dive into the impact you’ve made to date. With a lot of your packing innovations, you’re producing 23% less carbon emissions and have already saved 40,000 tons of CO2. I’d love to hear more about the scale of impact you’re hoping to make on an environmental level when you achieve the full fruition of your vision for the company. What does that look like? Like what is really moving the needle look like?

Boldt: Today, there are 68 million people in the UK eating lunch and dinner, seven days a week. So that’s 1 billion meals consumed in the UK on a weekly basis. So our impact right now is embryonic right, we’re like a drop in the ocean, just a tiny couple hundred million in revenue. However, if we make our price point better, we make our convenience better, everything better, we will 4x or 5x the company again very quickly. And every time we do that, the positive impact on people and the planet goes up.  So for us, scale is the enabler for achieving purpose and positive impact. And the legacy we hope to build is to touch millions and millions of people’s lives. 23% lower co2 emissions today, why not 50%? Why not 70% per person? That’s our medium term outlook.

Tsai: Incredible. When you first started Gousto, did you believe it would be possible to build a billion-dollar venture for good?

Boldt: No. I mean, I’m an optimist. And I think very long term, but no, I mean, the answer is no, I think it kind of dawned upon me over time. Initially, I wanted to have positive impact and build a sustainable business. Convenience, sustainability, and health are the mega shifts we’re in our market. And today, Gousto is 100x bigger than what I thought was possible back then. And I feel much more excited today about the size of the opportunity than ever before.

Tsai: That’s incredible. And do you think it’s generally more difficult to build a Good Unicorn or an ordinary Unicorn?

Boldt: It’s such a good question. I need to ponder this more. My gut reaction is, it’s easier because I wouldn’t be motivated working in a business that didn’t have the purpose we have. If you think about certain big tech companies being viewed like tobacco was 50 years ago, I think you see a real change in people’s behavior, from a consumer perspective, but also from a technology perspective, and software engineers, product people, they want to work in purpose-driven companies. 

So I actually think, and I didn’t realize this in the first five years, but I think being purpose- driven, really makes it better to attract and retain top talent across the globe. And so I think it’s fantastic. I don’t think it’s more difficult.

Tsai: I love that. Okay, so diving a little bit into being purpose driven: was there ever a time where you felt purpose and profit were really at odds with when it came down to the business? And if so, how did you decide between the two? 

Boldt: Another good question. I think it’s often a false dichotomy. It’s not one or the other. I can give you one example, we set this crazy goal of reducing plastic by 50% in one single year, and we’ve actually saved money doing it. Because if you put less packaging items into the box, you actually have more positive impact, but you also save on plastic. And so I think for a lot of this stuff, it’s actually ROI positive. And so it’s not profit versus purpose. 

Tsai: That’s such a good answer. So I want to shift a little bit to company-building. I’m just curious on the journey, when was a time when it almost all came apart? Or said differently? Like, what’s an example of a near death experience for Gousto?

Boldt: In the early days, we almost ran out of money a couple of times, I stopped paying myself a salary and I was just clinging to the last pounds. That happened a few times. I think it’s just taking us time to figure out product-market fit, who’s the customer? How do we automate factories more and more? It’s really, really hard. 

But near-death, to be honest, I feel like we’ve been kind of failing to success for the last 10 years. And it’s an overnight success that’s taken 10 years. And so we didn’t have these huge crazy wins, or these dying moments. 

Tsai: That’s really helpful for benchmarking, because I think as entrepreneurs, we always have a lot of these questions like, is what I’m doing normal or not normal? And so actually, product market fit – Let’s circle back on that. When did you know you had product market fit? 

Boldt: There are so many vanity points, but not many sanity points. We always look at the unit economics. As soon as we were spending one pound on marketing and getting three pounds, five pounds back, we kind of knew we were building a viable business over time. But knowing it and feeling it is very different. And so in 2019, we broke even for the first time, and we predicted it, but it felt incredible, and that was pretty special. 

So I think after two to four years, we felt like we reached product market fit. It took a lot of automation, because we believe food is hyper emotional and personal, and we should all have personalized, customized menus built by data scientists together with chefs. So that took a lot of time.

What do other people say?

Tsai: I just talked to Ashwin from Emeritus. He’s building a Good Unicorn edtech company in India, and it took them six years of total diligence to get to product-market fit. And then I was talking to Didier at Culture Amp, and he was sharing a story about how $100 million in ARR is the new product-market fit. So you never know the barometer keeps changing, right? The throughline I’m learning is that for companies that are dedicated to systemic, planet & people change, it tends to take longer, more grit, more resilience – because that kind of vision doesn’t happen overnight.

So have you done anything that’s been in direct contradiction of conventional Silicon valley wisdom that was critical to your success?

Boldt: 95% of our employees are shareholders in the business. I don’t know if this is unconventional or not. We very much believe that even if you work as a forklift driver, or putting food on shelves, everyone should have equity, everyone is an owner. And I think that’s made us quite special. At least, that’s the feedback we’re getting. 

Also, I think we became profitable after how many years? Six, seven years. And I think that’s quite different than what some of the Silicon Valley companies have done, burn whatever you want to burn and raise more money. I think we’ve been sensible in focusing on building a sustainable business. 

Tsai: You have such an interesting background. I mean, you started Gousto at the age of 26. Right? How did you do it? I mean, what were you doing before? 

Boldt: You’re very kind. The thick accent has never gone away. I’m German, but I lived in California for two years. And then 13 years ago, I left Germany, I started working in investment banking, because it was the flavor of the month. I like math and I like numbers and data. And then I left banking after two years, I joined a hedge fund in the UK, but never enjoyed finance. I don’t think the culture brings the best out of people. And so nothing against finance, but it just didn’t feel aligned to my values. I’m very fortunate I’ve got godparents, in California, they’ve built food businesses, they always inspired me, “Timo, you’re young, if you can’t make it work, just get a corporate job. There’s no risk.” And so they really pushed me and encouraged me, and I’m forever grateful to them. And that’s what I did in 2012 when I was 26, coming from a high salary to no salary, which is really great motivation. Just just trying to fail my way to success.

Tsai: So how did you choose the idea of Gousto? I’m sure you had many, many different food ideas. What was the selection process by which you eventually narrowed down and said, Okay, this is the thing I’m going to build?

Boldt: For the first kind of six months after quitting my job I was looking for the concept.. I had massive conviction around health, sustainability and convenience being the mega trends driving us into 2040, 2050.. And so what’s true back then what’s true today, what’s true in 20 years, kind of created this nucleus idea for Gousto. Gousto is ticking all these boxes, and we believe food will be the medicine of the future, if we build the back-end capacity for personalized nutrition, we will win in the long term. I had a couple of thesis points, mental model points. But I needed to really flesh it out and took time to flesh it out.

Tsai: And so as CEO, what are the three highest leverage activities that you focus your energy and time on to move the dial?

Boldt: This is my favorite question so far! I constantly challenge myself: “What is it that only Timo can do?” to relentlessly delegate. And ultimately, it comes down to very few things: vision and purpose. I think it’s operationalizing vision and purpose into strategy. 

And then its people and culture. So who is on the leadership team? What are our values? How do we epitomize them? How do we make the winning behaviors as repeatable as possible for people to really understand what we love and care about? So that’s what I spend all my time on. 

Tsai: And what about your personal learning agenda? What are you trying to learn? What are you trying to unlearn? How do you level up?

Boldt: Again, such a great question. So I come from a world where I did everything myself, you know, in finance, you do everything, as a founder, you do everything. Today, the world I live in, I do very few things. And it’s all about the team and setting the highest standards and the culture, and creating the framework for people to be their best and to unlock their potential. And so for me, the biggest journey has been, how do I become a coach? To be the best CEO I can be, I have to be a coach. And so I’ve actually become a certified coach. I’ve done a one year diploma course. I’ve also done an executive MBA on the weekends, just to think more strategically, and get management training. I’ve worked with seven different coaches in the last couple of years. So I’ve hugely benefited from that. 

And so, I think the biggest behavior to unlearn is telling people what to do. To instead, ask questions, deep questions, and get them to develop their own skills. And if you feel like they don’t get it right all the time, that doesn’t really matter. Because, the more you ask, the more room there is to grow. 

Tsai: That’s beautiful. What a great answer. Now, I really want to quickly come back to food as medicine. And I just realized, currently, you’re serving the market for ready-made meals. And I wonder, as you think about food as medicine, how do you make food as medicine accessible to the maximum number of people? How are you thinking about accessibility and affordability and food as medicine for all?

Boldt: I love, love that question. Thank you. So we’ve scaled our menu to  60 recipes per week. And that changes every week. So it’s more than 2x, 4x, the closest competitor. And so it’s a very automated, highly personalized menu experience. And that, over time, allows you to tap into specialized diets for hypertension, diabetes, Kosher.

And then secondly, we are only charging from 2.98 pounds per meal, including free delivery. That’s 30% of what some of the US players are charging. So we’re trying to be much, much, much more mass market, much more retention focused, much more affordable for every single person in the UK. And I think that’s really important.

If you want to position yourself increasingly as a health company, health is a societal need. It’s not a consumer need. And yes, maybe you and I want to eat a healthy diet and have a vegan burger. But most of the society is getting obese. And they still want to order normal burgers and sausages.. And the more you can give people the opportunity to make educated choices, via personalization engines curation and so on, the more positive impact you can have. And I think this is very much linked to the sustainability mission. Because if you as a customer know what you’re actually eating, maybe in the future you have some kind of genetic profile and a lifestyle profile that tells the algorithm what menu to surface, but in a similar way, it can surface meals based on co2 emissions, you know, end to end kind of sustainability factors. And so there’s a ton of change coming.

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