Transcript: Elevating Entrepreneurship, with Arthur Kay
Arthur Kay chats with Sam and RP about his vast experience as a CEO of several start-ups and organizations, including Skyroom and Bio-Bean, and as an all-around creator and problem solver.
00:00:00 RP
Hello. I'm RP. I'm a sustainability professional involved in impact investing in social enterprises.
00:00:07 Sam
And I'm Sam, an advocate on the role of technology in the pursuit of social innovation, nation building and sustainable development.
00:00:15 RP
We’re both from the IGP's MSc Prosperity, Innovation and Entrepreneurship program.
00:00:21 RP and Sam
And welcome to ‘To prosperity and beyond.’
[BREAK]
00:00:32 Sam
All right. Another week, another amazing guest. So, are you ready for this RP?
00:00:39 RP
I sure am, Sam! For this episode we have with us a man who wears so many hats and we've lost count already. He's the founder of multiple successful organisations such as Bio-Bean and Skyroom, Fast Forward 2030, Key Worker Homes fund and also an advisor for the Museum of the Home.
00:00:28 Sam
Yeah. As if that's not enough to keep his time occupied. He is also an entrepreneur in residence at UCL and serves as a visiting lecturer at Imperial College London. His work has been recognised by the likes of the UN, the Guardian, Bloomberg, MIT Technology Review and many more. So, without further ado, let's all welcome.
00:00:51 RP & Sam
Arthur Kay
00:01:33 Arthur Kay
Awesome to be here guys. Thank you very much for having me!
00:01:36 Sam
Thank you so much.
00:01:38 RP
So I think just as an ice breaker because we're all new, we're all friends here. So you are a founder of the Startup Bio-Bean. Do you still drink in coffee-chains?
00:01:54 Arthur Kay
I do, yeah. So I'm a big coffee drinker. I've got one in front of me right now. And I drink, not so much in chains. I often drink in independent coffee shops and make a lot of coffee at home, but not the big chains, really.
00:02:05 RP
Oh, but are these the coffee shops that BioBean services?
00:02:10 Arthur Kay
BioBean services yeah, coffee shops and coffee factories. So we work with companies like Nestle who have Nescafe brands as well as Starbucks, Costa Coffee, you know, Cafe Nero, people like that. Yeah. A real range of independent coffee shops all the way through to the biggest coffee companies in the world. Yeah.
00:02:25 RP
And with that like. What is your standard coffee order?
00:02:29 Arthur Kay
Simple, just a black coffee, maybe a, you know, a long black. So a strong short coffee.
00:02:34 Sam
Yeah, yeah. Right, very direct. Very straight forward like. Yeah, can't go wrong with that I guess, yes.
00:02:40 RP
Guess yes. Honestly, I think that's a lot of people’s standard order, yeah.
00:02:45 Sam
Yeah, not for me. I'm not in that, but yeah, thank you for sharing that, Arthur and perhaps we can now dive into more interesting questions about your background and your personhood, starting with, OK, we did a little bit of digging on your LinkedIn, and we're so sorry about that just a little bit of stalking.
But we notice that you have nine active rules in a wide range of organisations, so obviously the most prominent of them being the founder of BioBean and also Skyroom, but unknown to many, you also advise the likes of Museum of the Home. And we're just curious out of all of these commitments, do any of them really just pop out and give you the most fulfilment, and if so, can you identify that?
00:03:32 Arthur Kay
Yeah. So I I hope my LinkedIn is up to date because yeah, that's it sounds like a lot of roles, but I do quite a number of advisory roles and teaching positions at various universities as well. And the thing, I don't necessarily enjoy one the most, its more the range of different activities that I do I find very enjoyable and stimulating. So it's kind of spending time for example, teaching on the, you know, prosperity on innovation, entrepreneurship course at UCL. Whilst that may seem like an activity where you kind of just talk to the students, the students such as yourselves are so, so, so amazing that you get a lot of energy and ideas back from that too. Yeah. So it's the range of activities in and of itself is what gives me a lot of energy and a lot of optimism as well.
00:04:15 Sam
Right. Maybe just a quick follow-up question, at the top of your head was there any memorable moment that you had recently, that you are, I guess keen to share or like just really I guess energises you?
00:04:30 Arthur Kay
Yeah, so this was. Must have been about a month ago and I was walking through the new Battersea Power Station development and saw a shop from a project that I'd have been one of the mentors and student advisors on whilst at Imperial, one of my students there had gone all the way from kind of a sketch on the back of a napkin, probably four years ago now to a large retail store looking incredible in Battersea Power Station.
So that was really exciting and inspiring to see something that had gone from, you know, a twinkle someone’s eye four years ago all the way through the kind of the innovation and development cycle to being a, you know, next to the Apple Store and next to Lulu Lemon in Battersea Power Station. So that was really exciting.
00:05:12 RP
Yeah, it's like seeing tangible success from like scratchwork that you've been doing, yeah.
00:05:20 Arthur Kay
Yeah. And even and the success I think is part of it. But it's more for me anyway. It's more people making brave decisions to try and get things off paper and to happen in the real world. ‘Cause there's an awful lot in terms of people wanting to do things and talk about doing things and not so for example, you guys going and actually doing this podcast. So many people I've had probably 20 podcasts ideas but I've never made a podcast so, so many people will think about making a podcast and say wouldn't that be cool and never do it.
And it's not, you know, as you know, it's not the hardest thing to do. You need to book a guest. You need to get the kit together, need to work through. But it takes work and it also takes bravery to put it out there and say, “this is who I am. This what I stand for. And this is how we're going to go about it.” And so it's that's the stuff I like seeing happen.
00:05:59 RP
Well, thank you for acknowledging our work on this. In other things that we also digged around. We also found out that in one event that you promoted entitled “Is the Pursuit of Happiness, Making Us Miserable?” What like key principles from this activity do you still remember and how do you think answering this question contributes to one's path towards prosperity?
00:06:25 Arthur Kay
So this was an organisation I set up with a friend of mine when I was studying architecture at UCL. It's called Students for Happiness. And it was all around how people could look after their health and well-being in a more sensible way at a time where the debate this was probably 12 years ago now. So the debate was pretty nascent in the UK in terms of talking openly about mental health challenges, Wellness, that kind of stuff. Obviously that's now changed materially over the subsequent 10-12 years, but at the time it was, it was pretty unusual.
And this particular event was looking at how we're told that we should be a certain way. We should be, you know, up at, you know, 5:30 AM meditate half an hour, drink your kombucha lots of that things, than do this than the other. Yeah.
And there's more kind of actually, the knowing what in inverted commas is the “right way to live” or “the right way to do” or “how to be happy” sometimes is actually pretty unhelpful because people, for example, who do have a lot of my friends, have suffered from pretty serious mental health issues, for example, and they feel “everything in my life is going well. Why am I feeling depressed?”
And it's a very thin understanding of what is kind of Wellness and mental health issues and so. And the pursuit of it is an admirable goal, but often the idea that one must be happy. Or you're wrong if you're not that happy is, I think, where that event was framed around.
So this organisation students happiness started in about at university with my then girlfriend Georgia Gilmore and in the subsequent years we took it to a few other universities as well. So one University of Oxford, well, the London School of Economics and then University of Toronto, Canada.
00:08:15 RP
So like, even back when you were already sort of interested with this idea of, not necessarily prosperity, but then in this understanding, how we pursue things to be happy.
00:08:29 Arthur Kay
Yeah, well, the things I've done in a kind of more entrepreneurial sense or setting up organisations or doing creative projects, it's usually from the perspective of does something like this exist already. And at the time it didn't. And so it was very much looking for the purpose of this doesn't exist now. There is not a open, calm, sophisticated conversation around, in this case, happiness. And so I was looking to try and create that.
And we did get a lot of amazing speakers for it. We had people like Sir Anthony Seldon, Lord Richard Layard, John Lloyd, Theodore Zeldin. So we had some really impressive and inspirational speakers who came and kind of shared their insights and wisdom with us en route, which is great.
00:09:11 Sam
Wow! Even during your undergrad you were. Doing so many things already. But yeah, just to jump on the next question. So you are the founder and chairman of Fast Forward 2030 and since you started this in 2016, can you share with us the biggest developments that you've seen in this space and how they're contributing to attaining to UN SDGs?
00:09:33 Arthur Kay
Yes. So the idea for FastForward 2030 was Henrietta Moore’s, my co-founder and co-chair of the organisation. I remember very vividly us talking about it straight after they were launched basically and it was very clear at that time that there was a coherent plan for government in terms of how they could tackle the SDG's and current plan for big business and NGO's or how they could tackle the SDGs. But entrepreneurs, particularly early stage entrepreneurs, were completely left out of the conversation.
So there wasn't even an organisation to try and coordinate, even at the most simple level, some of this stuff. So again, it kind of starts from this point of saying, “This should exist. Why is there not a voice for this group and why is there not? Why is there not activity or coordination happening around this?” And so we started Fast Forward 2030.
And what we do there is technically it's kind of we call it a think tank, but it's essentially we kind of organise events. Try and we write some white papers. We provide a framework and support structure for early stage entrepreneurs and particularly try and get people who are thinking of starting a business and try and tilt them to do one that has a social, environmental or economic positive impact.
And then for those already starting the business that is in that sphere, we try and give them the support, the network, the peer-to-peer learning, the insights from you know both the Fast Forward 2030 network itself where we have podcasts and events and stuff that but also from the connection with UCL. And so today, we're kind of operating in three different countries in the UK, in Lebanon and in Kenya.
00:11:15 RP
It's so much that – it's you've done so much at such an early stage that it makes me wonder what were sort of the it's what was the inspiration for you to become an entrepreneur? You're involved in various enterprises. And I'm sure entrepreneurs like you have an origin story. What was the origin story for you to become an entrepreneur?
00:11:46 Arthur Kay
So technically I'm an entrepreneur and as I set up and run organisations, I don't necessarily think of myself as that. It's more as I say, it's more. I'm creating things that sometimes happen to organisations in response to either gaps in markets or challenges that need tackling right. So it's more like I'm kind of working with teams of people to try and coordinate action at four things rather than specifically being interested in being an entrepreneur.
Actually my starting point was I trained as I studied architecture at UCL and my starting point was around how you can try and make change in cities and that's always been my interest in as how you can use the city as a lens to be able to create change. I decided not to become an architect and instead to go down a route of running organisations and that was a view that I had. I had and still have around it not being the most effective way to make that change, I want to see.
So to kind of skirt around your question, it essentially I'm saying. I happen to do creative projects that end up sometimes with companies at the end of them, and they're in response to solving a problem or seeing some that isn't yet being addressed and trying to address that.
00:12:59 Sam
Right.
00:13:03 RP
Do you think in this pursuit there were particular pitfalls that still haunt you and whether or not how were you able to bounce back from these kinds of pitfalls?
00:13:16 Arthur Kay
So a huge number of pitfalls on-route I can go into some examples shortly. In terms of bouncing back, I mean in terms of acknowledging my privilege, I'm kind of a, you know, born into a middle class family in a global mega city in a, you know, prosperous country as a white heterosexual male. So it's kind of I've had a lot of kind of very, very fair starts and kind of strong start in life in terms of being able to have some of that resilience to be able to work through it and also you know, personal stability to be able to kind of work through some of those more challenging times.
So entrepreneurship, especially at the moment in countries like the UK, is very weighted toward and, is not particularly spoken about in kind of the discourse, but is weighted towards people from middle class background, people who've had some maybe university education or something like this. It's a luxury in many ways to be able to pursue riskier ventures and to take those risks without necessarily the feeling that you're going to, you know, go bankrupt or end up on the street. And so it's a big, big standing start that people like I have had to do that, but not many call that up.
00:14:33 RP
And in terms of like the pitfalls that you sort of wanted to highlight?
00:14:38 Arthur Kay
I mean these range from you know everything you can imagine ranging from people trying to steal my company from me multiple times, multiple different people, multiple different times, most different companies through to our factory burning down at BioBean through to you know, having physical threats of violence from people. Yeah, through to being blackmailed by someone once through to, you know, you name it. All sorts of weird and wonderful things. And then, you know, you have then you have kind of, you know more light-hearted ones as well.
So yeah, a lot know learnings on routes and some serious ranging from almost criminal things happening through to just, you know, kind of usual, kind of someone messing around trying to nick things from me.
00:15:31 RP
So like connecting from what you said prior to this, do you think like the background was able to sort of cushion how you pivoted or were you able to build like sort of a support structure for you to be able to withstand or pivot on when something like that happens?
00:15:52 Arthur Kay
I think it's the ability to be quite resilient in the face of those things happening. Also acknowledging bad stuff will happen and then working through it when it does in a relatively methodical way. So I'm pretty good at being able to separate out things.
So for example I've got friends who run companies that say and they'll be, I don't know, something bad will be happening in their company and that will ruin their social life, say, or their, you know, their time with their partner or their mental health.
And I guess what I'm pretty good at, it's not necessarily all good in terms of this, but what I'm good at in terms of as an entrepreneur, I'm good at being able to segment out things that are going wrong in, in my personal life, say from my professional life, and be able to put that in a clear emotional box and then also between companies as well.
So let's say, I sit on the board of a museum as I mentioned, and let's say something's going wrong there and then something's going. I won't let that or try not to let that I'm quite going to learn that filter over into my day job, say, and vice versa.
00:17:05 Sam
So what I got from that is compartmentalisation is key, so you can handle different situations and different stages of your life with various engagements and whatnot, yeah.
00:17:12 Arthur Kay
Yeah, yeah. I'm not necessarily sure that is a always a good thing in terms of, I think probably a therapist who may have some views, and if that's a healthy way to behave. But certainly in terms of being able to look at a challenge directly and be able to try and address that without necessarily – obviously there's some maybe emotional crossover that I'm not acknowledging. But without having bringing the stress of that to that situation and being able to kind of switch off quite effectively.
00:17:46 RP
And I think it ultimately is like a muscle that you have to sort of train to be able to separate the professional and the personal in that aspect. Because at the end of the day you don't want, if you are very passionate of a particular problem in solving, you don't want it to get worse, by a very quick and unthoughtful reaction caused by a totally unrelated thing.
00:18:15 Arthur Kay
Yeah, I agree with that.
00:18:17 Sam
Yeah. So, I mean, it's interesting that you don't identify as an entrepreneur even if you have all of these organisations that you sort of like founded. But we're curious like even if we've had a lot of developments already, it's already 2023 for that matter, but it's still quite difficult to establish yourself in this space, especially if you don't have the right connections, the right background. Then the right, I guess like networks.
So how did you establish yourself? And you know, really put yourself out there as someone who was credible and legitimate, even if you did not necessarily have the right skills to begin with. And what was your process in building your team?
00:19:00 Arthur Kay
So in terms of from a standing start, the industries that I kind of was building my first business in were essentially renewable energy biochemicals and waste management. And we ran, you know, large factories, developed products, set up supply chain. And when I set that up, I was kind of early 20s, so that was a relatively – actually kind of high technical and needed high credibility in order to make it in that make it in that industry.
So very different from, let's say, a kind of personal finance app, which has kind of got its other challenges, but, you know not you're not gonna die if it goes wrong kind of thing. Whereas you know if a factory blows up you know it people can get hurt and that kind of stuff. So there's a need for both a credibility to secure investments and customers and set up supply chains and partnerships. But also to make sure that things were safe and secure and run properly.
So again, acknowledging some privilege here, a lot of it was being like a 6’2” white guy, probably helped. And also from like you know I studied at UCL and had you know a few family connections this kind of stuff. So the kind of combination that gave a kind of a start to be able to get into certain rooms, for example.
However, there's a great line in The Simpsons movie which is Tom Hanks is playing himself and he says that, “the EPA has lost its credibility so that borrowing some of mine.” And so it's this idea of basically, if you are, you know in this case the EPA Environmental Protection Agency, had lost its credibility. So they have a Tom Hanks is the most beloved actor in America. So they're borrowing his credibility. So what I've worked at and think is a hack or shortcut for entrepreneurs who are looking to build credibility, whether this be in actually any industry is essentially a logo collection game.
And so you for example, partnering with other organisations, winning prizes, getting press, getting this so essentially you're kind of working to kind of as an ancillary benefit to be able to get those logos and then you can for example, let's say get, for example, I’m a fellow of the Royal Fellow of the Royal Academy of Engineering, and so I can get a quote or an endorsement from the Royal Academy of Engineering and put the logo on my thing and say that, you know, “I'm not an engineer. However, the Royal Academy Engineering thinks Arthur is great because they said this is about that and he's a fellow there.”
00:21:22 Sam
That definitely helps.
00:21:24 Arthur Kay
So, if you're trying to build credibility in a space that that is a relevant badge to collect. If it's, let's say in my example earlier, the personal finance software app, it might be the equivalent from an economist at the London School of Economics. It might be from a well-known personal finance Blogger. It might be from a Trust Pilot review or saying you know whether this kind of thing. So it's how you build that credibility early on, even when there's not necessarily that much substance behind it.
00:21:53 Sam
Yeah, makes sense. I mean, you just have to put yourself out there. And I guess since you quoted The Simpsons, it's sort of like sounding like Pokémon you gotta catch them all OK.
00:22:05 RP
Honestly, I think and also to segway to the next question. There is no straightforward way to sort of what the path is when you're beginning a venture. As both of us are PIE students, and you are also teaching a lot of entrepreneurs from the IGP, we are relatively in the budding stages of our career in solving these wicked problems. If it was possible for you to tell us like, what were, how were you able to design the solutions that worked and what were like key factors that you were looking into in assessing the viability and scalability of these solutions.
I think you've glossed over some earlier but like if you can be more specific.
00:23:01 Arthur Kay
So a lot is around starting with your customer and understanding what they want. And I think I'm not necessarily very good at doing this always myself, but trying to understand very, very clearly, “Is there an actual customer need for this?”
I think a lot of people and again, I sometimes I've done this, build what they think should exist in the world, rather than a specific need that they may have experienced themselves, or that they know a customer experiences.
And so and I see a lot of people waste a huge amount of time and money going down that thing forgetting who the customer is. And obviously that doesn't necessarily always mean that the customer has to be right.
As in sometimes that you know there's the famous Henry Ford line, “If I asked the customer what they wanted, they'd ask the faster horses.” And instead of the automobile. So that doesn't necessarily mean saying, “which product would you like?” There's a way. I'm sure you're familiar with kind of design thinking and the methodology in terms of how you can go about understanding what customers may or may not want, instead of literally just saying, “do you want this product?”. And so there are ways to get to that outcome, but that's kind of the key piece.
From that, then, there's a whole bunch of technical things that one needs to work through to end up on it and also understanding what you actually need to build versus what you can buy. And so to give an example of that at BioBean, we made a decision, I think maybe the right, maybe the wrong decision, but a decision to build an entirely vertically integrated business; which is a very unusual and quite rash thing to do.
So we decided to own R&D ourselves, to own the supply chain ourselves to own the factories ourselves, to own chunk of distribution ourselves and so. And so we were literally, you know, developing and designing products from scratch. We were doing the engineering to make the machines to make the products. We then were building and operating factories and then we were selling products at the back end all within a very small startup company. So that's a very unusual thing to do to try and vertically integrate a small business.
Versus with Skyroom, what we're trying to do is be the interface for coordinating a number of existing operations. So we try and partner with major land owners to build new floors above their existing buildings. And we then coordinate the supply chain behind us, which is a construction industry supply chain using in our case sustainable modular housing. But we have made a decision not to vertically integrate to build a modular housing factory for example, or to become a specialist designer of certain kinds of niche things. We're trying to own the relationship with the landowner and coordinate that as a development manager rather than as a vertically integrated supply chain.
Understanding which piece within the supply chain is the value added piece, is really essential. You can spend a huge amount of time designing, redesigning things that already work very well, rather than procuring them well. Let's say for example, if you wanted to set up a really good coffee shop, you may choose your USP (unique selling point) to be “we source our beans very effectively, or we have the best barista” or have whatever has to be.
You are unlikely, for example to become design your own coffee mugs or develop the point of sale system for your coffee shop or to become an architecture company to then refit your coffee shop yourself and do all the designs things. So you're understanding which parts – which of the USP you're going to focus on get very good at and designed versus just procure. Most people should procure most things and decide what's the one thing or two things that you're going to become the best in the world at, and then focus on that.
00:27:03 RP
Do you think this particular journey of figuring out what your USP is like is an easy one, or something that entails so much reflection from the central entrepreneur?
00:27:16 Arthur Kay
It's I think it's quite often it's quite an intuitive thing and people can miss, again, myself included, can misunderstand what their actual USP is. And so it does take a lot of thought and reflection to get to what it is, but it is quite an intuitive thing.
So it's not only necessarily working harder at it will mean that you get the answer what it is. It's not a number crunching exercise or not a particularly academically rigorous exercise. It's pretty intuitive and understanding actually what's gonna make you different in the market and a lot of people lie to themselves about what that actually is.
I've got a friend at the moment who, I believe he's doing this at the moment, he's lying to himself. He's setting up a company and thinks that his USP is an actual USP and it's a fake USP. It's a different way of doing, and I've told him this many times, but he won't listen. But it's a different way of doing the same thing, and he's convinced it's different enough that it's going to be completely game changing for the industry. But essentially, you could buy it from 50 places off the shelf now, and he should procure it and focus on his USP which could be phenomenal execution for example or could be better distribution or you know better procurement and you manage your costs very well and you got a better margin. So you can offer your product more, less expensively. So fake USP's are a big danger.
00:28:38 Sam
Hmm, fake USP. Never heard of that concept, but it's quite interesting. It is a phenomenon for some people to believe that, “hey, this is something that would really change the lives of everyone.” But at the end sort of deluding themselves like, “well, not exactly, but I guess some people need to try it out before they really realise that “OK, it's not gonna work out.”
00:29:00 Arthur Kay
Yeah, or at least understand where the challenge is. Let's take an example of, you know tackling malaria in sub-Saharan Africa. I’ve got a friend who was doing this for a time and they kind of redesigned the mosquito net. The issue was, she came to understand, the issue wasn't actually that the mosquito net was not good. You could buy very inexpensive and effective from mosquito nets now.
It wasn't a better mosquito that would solve the problem more effectively. It was a distribution problem about and a usage problem in terms of if people. Will get it to the people who need it and will they use it once they get it? And so it's trying to solve it through having a better mosquito nets is neither here nor there. You could have, you know, a mosquito net, that that cost even less and was even more effective, and it still may not get the right people and still may not be used.
00:29:53 Sam
Makes sense!
00:29:54 RP
That was a very dense first half of the podcast.
00:29:58 Sam
Yeah. So maybe we can take a quick break so that people can sort of like absorb everything that has just been mentioned.
[BREAK]
00:30:04 Sam
We are back. What a break. And now we're going to, I guess probe a little bit more about your businesses starting with BioBean. So it's been around for about 10 years. And for those who don't know, it's the world's largest recycler of spent coffee grounds.
So what can you say is the most important impact it has produced thus far, and how were you able to achieve that?
00:30:33 Arthur Kay
So BioBean turns spent coffee grounds into a range of advanced biofuels and biochemicals. So we make a range of products like biomass pellets, bio biomass logs called coffee logs, and then a range of higher value materials, for example Inficaf, which is a biomaterial, and then a range of flavours and fragrances. So the stuff that makes coffee taste and smell like coffee.
The stuff that gets me most excited in terms of impact we've made thus far is around the kind of 10s and 10s of thousands of tonnes each year that we divert from landfill and the kind of savings in terms of CO2 and we can count two savings here.
The 1st is diverting waste from landfill or equivalent. That saves CO2 cause it stops, in this case, methane degradation, which is 27 times more potent than carbon dioxide in fact. And then means that you avoid that. And then in addition we can displace conventional fuels. And indeed virgin materials.
Instead of burning coal or wood, you can use coffee logs or biomass pellets, and then instead of using virgin materials such as wood or plastic or where it has to be as we can use Inficaf, and then instead of using virgin coffee to make natural flavours and fragrances we can use our still natural derived coffee, but from spent coffee brands rather than from virgin coffee grounds.
And all of that means that we've collectively saved hundreds and hundreds of thousands of tonnes in terms of CO2 emissions, and we've because we've been recognised as a B-Corp kind of best in the world in terms of the environment.
00:32:14 RP
It’s quite impactful for like a startup that is just relatively 10 years, 10 years old.
00:32:21 Sam
Yeah, 10 years is a short time, especially for a lot of businesses when you compare it with let's say for example, traditional organizations that have been around for like centuries or something around that number basically.
00:32:34 RP
Yeah. And I think another venture that you have that you gave us some insight a while ago is Sky Room, is a bold attempt to solve land scarcity issues in megacities like London, like what was the inspiration for that particular business and how do you see the organisation evolve moving forward?
00:32:57 Arthur Kay
So the original idea for Sky Room was actually very similar to BioBean, while they're seemingly very different businesses, what they both try and do is make value from waste, or in this case, in the case of BioBean, it's wasted stuff spent coffee grounds. And in this case of Sky Room, its wasted space.
In our case, we're looking at empty or underutilised rooftops, the initial idea for the company name in fact, was “Waste of Space” instead of Sky Room.
And specifically what we do with Sky Room we is we work with major land owners to add new floors in the airspace of existing buildings and we at the moment are operating in a few different countries, but mainly focused in the UK as you say. And in terms of, I guess the idea there and why it makes sense, is the main cost of a house in a city or a or a home in a city like London is not the architecture or the building itself, it's the land upon which it's built.
And so we keep trying to – to the point around fake USPs, we were touching on earlier, to try and make a house affordable is very, very, very difficult. If already 70% of the cost of the end product is the land. So even if you were to almost put a building there for free, you've still got something that's, you know, got 70% of the cost built into it. And so that's why you can for example spend, we're here in Bloomsbury in central London, where if you were to buy a, you know, let's say 1000 square foot flat, that would probably one and a half million pounds, maybe £2 million. But for exactly the same flat. If you were to move it to rural Wales, you could buy that flat for probably £75,000, right? So it's a, you know, many orders of magnitude difference in terms of how much that flat costs and that's the land.
And so our insight was very crudely that if you could get what's called “suitable urban building land”, so land that you can build on in places where people want to live, so not in this case not in rural Wales, they want to live in Bloomsbury, you can materially reduce the end cost.
And specifically what we do is we do it for key workers, so people who need to be near to their place of work in order to deliver their jobs. So you can have a nurse – it would be very hard for a nurse to live in rural Wales and work at UCLH and therefore they need to be within a proximity of UCLH to go to that.
So our kind of theory of change around if you can get those people near to their place of work, i.e. you’re delivering the 15 minute city concept for London's key workers, you then will have a direct impact on them, which is, you know, better retention of NHS staff. Most of their income already goes on housing, so you can reduce housing poverty. A whole range of impacts there, but also the knock-on effects to our public services will be very positive. Because then you have instead of a nurse being stressed and underpaid and overworked and feeling like society doesn't care about them, you have someone who is in a much stronger position personally and able to therefore do their job more effectively and support patients and have that positive knock-on effect to society.
00:36:19 RP
Who do you say would be like your key customers for Sky Room? Are those people like NHS because you say that they benefit more for having their staff near, or is it the original building owner in which Sky Room is being built upon?
00:36:37 Arthur Kay
It's a great question and it's a question we struggled with for a few years actually in terms of understanding that. Because the end user is the person who eventually occupies the house or flat, and that's typically a London key worker. However, we realised that our customers in fact are major land owners. And so we've refined our business model somewhat to be able to actually focus on them and we're still kind of tweaking it in terms of that.
But the role that we take in the supply chain is a development manager and we provide the kind of development management services, but also bring a range of technologies and different unique approaches to the built environment to be able to actually deliver this. Because it's a relatively technical product to be able to build, you know between 2 and 10 new floors above existing buildings. So it's quite a hard thing to do. And so our company focused on how you can do that and offer that as a service to building owners.
00:37:35 RP
Is there a danger that these building owners would just impose the same amount, the same like preventative structures or rental structures to these healthcare workers – with this new floor in their building?
00:37:50 Arthur Kay
So we typically do between 2 and 10 new floors. So significant amounts of new massing. But through the process, which in London or in the UK it's managed through, something called a section 106 process. And so that's a legal obligation that you enter into with the local authority to deliver a certain kind of housing. So through the planning process that gets agreed and ironed out with the landowner.
00:38:14 Sam
Interesting. I mean, I feel like at this point we've covered so much already, like all of the topics that we've discussed have been a lot to absorb for sure for our listeners. So perhaps we can end on a lighter note. We notice that you're a keen reader. So what do you think is the must read for innovators out there trying to advance sustainability or address grand challenges like yourself?
00:38:42 Arthur Kay
Yeah. So I read a lot and think that a lot of entrepreneurs should read or listen to audio books or how they learn best because it's a very, very important thing to kind of think more broadly beyond your industry and area of expertise.
So my first thing, I guess similar to your earlier questions around what I enjoy reading, and it's a very, very broad range of stuff, so I don't actually read that much within, let's say, sustainable entrepreneurship. I'm usually reading books about history or politics or design or engineering, or whatever it has to be, or kind of culture and that kind of stuff. I read quite a lot of nonfiction.
But things I would recommend if people were kind of getting started in terms of being an entrepreneur, I would say, Robert Green's work is good “Laws of Human Nature”, which is kind of, I guess, more like a, will it be pop psychology, maybe. Peter Teal's book “Zero to 1” is good again he's a very divisive and controversial character, but it is a good framework to think about delivering. His focus is particularly kind of entrepreneurship in software and in Silicon Valley, but it's in a very well written book and an interesting approach on it too. So those would be my kind of starting points from it and then.
But the overall approach to reading would be read random stuff that's not obviously relevant to your sector and look at how those ideas can kind of cross pollinate and help your existing thinking.
00:40:17 RP
Well, thank you so much, Arthur, for like taking your time off from your very busy schedule to entertain this podcast.
00:40:23 Sam
Yeah, he only has 9 other organisations. No big deal. Right, obviously this man has so much time on his hands. Well, thank you so much, Arthur. It's been a pleasure having you and we hope that you enjoyed your time here as well.
00:40:37 Arthur Kay
I had a great time. Thank you very much for doing such a great work with hosting and more importantly for setting up the podcast, which is amazing and takes a lot of bravery and initiative, so well done both of you.