The key to raising investment is to simultaneously attract interest from multiple parties. The investors then compete to be part of your round, allowing you to choose the best offers. However, given that more than 80% of pitches to VCs are unsuccessful1, you need to be on the road meeting dozens of them in a short space of time to build a swell of interest at the right moment.
So, Rachel was bouncing around London while nine months pregnant. One of her traits is to reframe supposed disadvantages as advantages: Investors know you have to be a bit crazy to try and grow a start-up. They almost always fail, involve horrendous hours and high levels of stress. So, rather than seeing her pregnancy as a disadvantage, Rachel believed the message was clear. The fact that she was pitching to them, while nine months pregnant proved that not only was she crazy, she was really crazy.
And it worked. Rachel raised £10m for her business Koru Kids and was able to cherry-pick between investors. Koru Kids’ mission is to help families flourish by finding them the right childcare. She believes that childcare infrastructure should be as fundamental as roads and bridges. Koru Kids’ goal is to build a childcare system for their customers. They recruit, train, support and manage part-time nannies at scale.
Rachel grew up in a small farming town, Invercargill, ‘at the end of the world’ in New Zealand. Despite both her parents being teachers she always wanted to have her own business. She was the kind of kid who would sell posies door-to-door. With around 50,000 inhabitants the largest industries in Invercargill were farming and aluminium production, which employed around 10% of the town. Rachel’s first job was at a local aluminium smelter where she worked during the school holidays. Her first year involved collecting water samples. For this she’d wade out into the estuary next to Invercargill in huge waders to collect readings. The main challenge was that the local nesting birds weren’t particularly appreciative of her efforts and, protective of their nests, they’d aggressively dive-bomb her each day. She’d wade out into the estuary, crying with fear as the birds attacked her for delivering a start-up all-hands meeting when the business is going through a tough patch?
The second year at the smelter involved collisions of a different nature. Rachel was assigned to drive the vans. Within a fortnight of starting she’d had minor accidents in three of them. Once the vans were sent for repair the fleet was reduced by 40%, so to avoid further losses Rachel’s boss had to take her place driving the vans while she manned the walkie-talkies from the office.
Rachel had more success academically. In 2002 she left New Zealand with a degree in Linguistics and Politics, for Oxford University, as a Rhodes Scholar. She’d worked hard to win the scholarship and spent several years at Oxford in what she describes as a state of bliss. She graduated with a Master’s and Doctorate in International Development with a thesis in Ecuadorian Politics.
Upon graduation Rachel joined the consultancy McKinsey where she worked for six years visiting countries including South Africa, Norway and Russia. She worked across sectors including retail, mining and healthcare. The experience was a wonderful opportunity to learn but certainly had its fair share of challenges. During a project in Siberia she was the only non-Russian. Her translator would leave at 5pm and she would be left totally isolated and unable to communicate with the rest of her team.
Rachel’s advice for people starting out in their careers:
‘Work like mad in your 20s. Then, by the time you have kids, you have control over your career. You can call the shots. You don’t have to justify taking time off to go to the school concert.’
From McKinsey, Rachel joined DrThom as CEO. DrThom was an early remote healthcare start-up with 200,000 registered patients and was turning over £6m. In the two weeks before she joined she crammed everything she could about e-commerce. Under her stewardship, the number of registered patients at DrThom grew to 1.3 million and turnover jumped to £20m.
It was during this period of her life that Rachel had her first child. After six weeks of maternity leave, she was back to work.
‘I wanted to exclusively breastfeed my daughter Naomi so I had my own pumping room in the office with a fridge. I felt like a cow but I made it work.’
Rachel’s friends also started having kids at the same time. She saw them struggling with childcare and thought 'there must be a better way.'
Two thirds of Families in the UK now spend more on childcare than they do on their mortgage2 and many women feel they are effectively paying to go to work. Once she personally experienced the challenges of childcare she said she ‘knew she’d hit upon her life’s work.’
Koru Kids has grown into one of the UK’s most loved childcare brands. They often train hundreds of nannies a week and sometimes complete as many as 100 interviews in a single day.
British childcare costs are some of the most expensive in the world3. Many couples spend more on childcare than they do on their mortgage. The impact of childcare costs are exacerbated by the fact that many of us don’t live near or feel able to ask for help from our extended family. Yet at the same time as parents feel like they’re getting fleeced by childcare costs, nurseries are struggling to keep their doors open. Nurseries report that they’re underfunded by £2.31 per hour.
As Rachel put it ‘The childcare sector is in complete disarray with nurseries going under, childminder numbers plummeting and parents facing enormous bills and waiting lists.’4
1 in 10 childcare workers rely on food banks, 1 in 8 earn less than £5 an hour and the average wage per hour is just £7.42.’
Women bear the brunt of the system’s flaws and often step back from their careers due to the lack of quality childcare options. As Rachel eloquently puts it:
‘Our (mostly male) government underfunds the (mostly female) childcare system, and women pick up the slack - damaging their careers, their mental health and their income.’
Rachel argues the Covid response illustrated the system’s flaws when it comes to pregnancy and childcare - she points to how ‘it took months for Covid guidance to cover pregnancy’ and how there were U-turns on whether babies counted as a person for meet-ups - but that the pandemic also showed how women can lead differently to men:
‘Where we had women in leadership roles during the pandemic we saw a lot of very empathetic communication, compassionate policies, decisive action and different forms of risk management.’
For Rachel, Jacinda Ardern, the former Prime Minister of New Zealand, has rewritten the book on what an effective leader looks like:
‘Much of her power arises from her deep personal principles, which are so clearly authentic, her actions never workshopped or focus-grouped. The trust this wins her allows her to move at warp speed in a crisis, often doing things that people in other countries think impossible. In the context of Covid, as well as dramatic policies that also meant inspiring a nation to become more empathetic, self-sacrificing and kind. In a world where so many leaders try to win by dividing, she wins by uniting – and we need so much more of that.’
Rachel says that she was inspired by the famous Simon Sinek video, start with why.
She spent a lot of time working with her team at Koru Kids defining their ‘why’, which is to help families flourish. During the pandemic she says that helped the team to experiment with new approaches, such as remote childcare, while never deviating from their central purpose.
Rachel believes that for team members to thrive they need purpose, autonomy and mastery.
So, purpose and mission alignment comes first. Then Koru Kids tries to allow people to have creative control over what they’re working on. Rachel draws parallels between parenthood and management. The more you learn about parenting, the more you learn about management, and vice versa. Children need to be given freedom and autonomy to make decisions. Modern-day parenting in the UK controls and schedules every minute of a child’s day in a way that is alien historically. So Rachel has given her child total autonomy over how she spends her pocket money. She’s had to resist the urge to warn her child off making certain purchases but the result is that her daughter has got huge value out of the things that she chose to buy herself.
Rachel runs regular all-hands meetings where team members can submit anonymous questions that will be answered live on air. She views these as being like pressure vents which allow the team to surface frustrations or issues and by enabling this ‘steam’ to surface regularly it prevents pressure building over time.
Another development tool that Koru Kids use is to ensure that each team member has a live feedback session every 6 to 9 months. During this session team members come in and give the person live feedback. They usually ask for feedback around specific areas and overwhelmingly the feedback from the team is that despite being initially terrified it is a very positive experience.
For all new managers at Koru Kids, Rachel runs a new-manager programme where they read a series of management books and articles and then have weekly discussions. Here’s what’s on the reading list:
The One Minute Manager, Ken Blanchard
High Output Management, Andy grove
The Coaching Habit, Michael Stanier
The Making of a Manager, Julie Zhuo
Saving your rookie managers from themselves
Persistence and resilience as key elements to Rachel's success so far. Whether that’s been raising investment while heavily pregnant, or leading a team through a pandemic. It’s also something that she wants to pass on to her children. When they ask for help she has a rule: ‘Have you tried ten times?’ After trying something the same way three times you usually adapt and try it a different way. The eighth or ninth try is often the one that works. You iterate and persist.
Rachel is part of the team that delivers our leadership and management training. We tailor each programme to the needs of each organisation we work with, working with you to select the right mix of start-up leaders, practitioners and leadership thinkers. Find out more here.
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