Episode Transcript
Julia: Hello everybody, my name is Julia Hoggett. I'm the CEO of the London Stock Exchange and I'm here to introduce the latest in our Be Inspired series. Now I'm delighted to be joined by Matti Niebelschutz, who is the CEO and co-founder, we'll get into that, of a great company called CoachHub. Matti, thank you so much for joining us here today. It's a real delight to have you. At some point I'm going to ask the cameras to pan back so that we can admire your shoes because we've already discussed that I have shoe envy and I think I'm going to think about expressing a little bit more individuality in my own shoe choices going forwards. The individuality bit is the bit I want to explore, which is your journey to get to be the founder of a company. And there's an implicit question in that as well, which is you're the co-founder with your brother. So I'd love at some point to also understand how do you choose the roles between yourself and your brother when you're setting up a company? But maybe let's start with what CoachHub is and the journey that you took to found the company.
Matti: Yeah, absolutely. Thanks for having me Julia, i'm excited to be here. What is CoachHub? CoachHub is the leading global digital coaching platform. And I typically like to start with the vision. Why are we here? And the why behind CoachHub, the why we launched this company is really to democratise coaching, to make it accessible for more people around the world. So this is what we're doing. We're working with the who's who of global enterprises and then with 3,500 coaches around the world in 90 languages to really help make coaching more accessible for more people. Let me go one step back and how I got into coaching is through being a first-time manager 20 years ago with my first startup, and I was completely overwhelmed. I didn't know how to manage my people. I didn't know how to manage my investors. I didn't even know how to manage myself. And this is when, maybe it's fair to say, when coaching saved me, when I got introduced to my first coach, who really helped me to reflect, to set my targets and really to develop my career and evolve in my different roles. So this really is the idea behind taking something that in the old world was just available to the top executives and maybe top politicians and top sports people and really make this accessible to one day people of all career levels. And maybe lastly on this, in the old world, many of our corporate customers have been telling us, how do we do coach matching? Well, we have a person, we get a call from an executive, I need a coach please. They look up their Excel spreadsheet, try to find a coach, call the coach and then hope that it will somehow match. Obviously, that doesn't scale. That maybe works for a handful of people, but if you want to coach thousands or even more across your organisation worldwide, you need something scalable and only technology allows this. So we're really working with AI based matching algorithms and so on, to really ensure the highest quality for our customers and good global scalability at the same time.
Julia: And you've built a pretty remarkable group of clients, I mean, the Fortune 500 companies. How have you gone about scaling your business and proving it out to what are pretty discerning and cost conscious buyers of this sort of service as well?
Matti: Absolutely. When we first started, like any startup, we were starting in my brother's living room. We didn't have anything. We said, where do you start? Building the coaches, building, selling to customers or building the platform? And I said OK, we need to do all three things. But then one step after another, we really managed to strengthen all of our assets to win a significant portion of the Fortune 500 and work with the best coaches in the world. And it was really key to go one step after the other. I would look in different phases in our six year history. When we started the business, those were the times 2018, where it was all about growing as fast as possible, hyperscaling. So we actually did seven fundraises in, I believe, three and a half years.
Julia: Oh my word. Whilst also building a business and having to execute.
Matti: Exactly. Exactly. That was the night job and building the business was the day job.
Julia: Yes.
Matti: Having raised US $315 million, so really scaling rapidly from a European pure play to then really becoming a European leader, we acquired the French category leader and then growing this to become a global player, which of course not many European companies managed to do. But that was really a great ride. And then 2022, obviously markets significantly changed, so we had to pivot as an organisation. How do we turn the company profitable from hyper-growth, hyper-burn to profitability and at the same time still doubling our revenues?
Julia: No difficult set of challenges there. But what do you think the greatest lessons you've learnt in terms of maturing your business model have been through that journey? Because hyper-scaling to a real focus on margin development is quite a different mindset. Not only for you, but for your people as well, I would have thought?
Matti: Yeah. I would say my two biggest learning as entrepreneurs and even reflecting on the last 20 years in entrepreneurship are number one, what's your vision? Why are you doing what you're doing? What's the end game that you have in mind? Because things will change. You might need to adjust your strategy, but really be clear about where you want to go. And then the second aspect is really focus and perseverance. There will always be obstacles to overcome, and you need to be agile, you need to adjust. But those two things for me are the secret sauce.
Julia: And one of the things I'm fascinated by is obviously you've gone from being a localised and growing within Europe to now building a global platform. And coaching is also a cultural thing. So how do you evolve your offering and what are the lessons that you feel you need to learn in different jurisdictions or regions when you break into them? Because it's not necessarily exactly the same product I would have thought in every region that really works. Is that right as an assumption?
Matti: It is absolutely right. And on top of it, the coaching industry itself is super young. It's only 20, 30 years old. So markets are also having different maturity. Coaching overall is more coming from the U.S than through the UK and Europe and then growing to the rest of the world. So you have cultural nuances plus market maturity differences. So obviously that doesn't make it easier to scale globally. One of the key learnings was that on one hand we need to provide consistency because we are focusing on the enterprise segments. And our customers want to scale coaching throughout the world with the same quality levels and the comparability in terms of measurability. And on one platform they want to buy from one hand, plus at the same time, we need to cater to local needs. For example, when we were entering the French market, at first we were having a very difficult time because our offering didn't fly in the market because we didn't know that in French coaching processes the manager typically joins the first session to set targets. So this was one of the elements that we then had to create, which by the way also helped us in the Asia-Pacific region because there are some similarities. And over time our product and our offering evolved and was localised.
Julia: And it's an interesting model in that your coaches are effectively your shop window every single day. So you've got a pretty strict mechanism of identifying the coaches that you want to have join the platform, I think as well.
Matti: Absolutely, absolutely. I would describe our business, we're the stage and our coaches are the stars to shine. So it's really our job to find the best coaches, highest quality. Because again, with enterprise clients, the number one criteria really is on quality of your services. And then really finding these good coaches, making sure they are also comfortable in coaching digitally because 100% of our sessions happen remote. And then really building this community with our coaches and making sure that you are not only partnering in the short term, but really over many years. And our average, the average lifetime of a coach that we're working with is 20 years extrapolated. So we're really building a long-term partnership there.
Julia: Now you mentioned AI and how you're thinking about or how you're using that for matching. And I think you're continuing to evolve your use of AI in the platform. I don't know how much you want to share about how that's evolving and what you've learned in using that technology as well?
Matt: Absolutely. Since day one, I mean, we're a tech company. We're driven by technology. Without technology, coaching at scale wouldn't have been possible. So it basically enabled our business model in the first place. One of the questions that we've always asked ourselves is how do we turn our vision to democratise coaching for people of all career levels worldwide into a reality? For the longest of time, we basically took something that was just for the executive level, 0.1 percent of the workforce and brought it to the manager level and the high potential, which is maybe 10 percent. But one question that I was always asking myself is how to support the 90 percent of the workforce. The individual contributors, the office workers, the blue-collar workers and all those people. And while five years ago I would have said, I don't know, maybe it's team coaching, maybe it's health coaching. Now I know the answer is AI coaching. Because that's really the future, how we can enable 100 percent of the workforce. And for me this is, to be honest, very, very exciting because what we're doing here is we're truly serving a target group that has been underserved before. Those people are often overwhelmed. And now we give organisations a tool where they can really almost executive level support all of their individuals with personalised coaching.
Julia: That's fascinating. I always think about equity and inclusion. I use this very simple phrase, which is 'it's about giving everybody an equal opportunity to shine'. Which feels like it's the spirit of everything that you're talking about as well. But it's quite a shift in culture in organisations to think that that is a service that they'd want to provide to that breadth of their staff. Because, as you say, very often they're thinking about the top slices. Have you seen that evolution and mindset amongst your clients as well in terms of thinking about what they want to provide to their colleagues?
Matti: I would say evolution is the right word to address it. But at the same time, companies are telling us about their limitations. They tell us we would love to roll out coaching to even more people, maybe even all of our people. But recently I've been talking to the HR leader of a leading global healthcare company, and they said, you know what, we have 100,000 employees. Imagine I roll out the human coaching to 100,000 employees. That would cost me several hundred million per year. No company on earth has this budget. But with AI, you can get this almost the same quality for a fraction of the price point. So it's really a game changer in people development.
Julia: So it's opening up an opportunity for the firms who you work with to think about provision in a way that they've never thought about before?
Matti: The beauty of it is that you combine organisational benefits, really increasing workforce productivity, increasing employee retention, innovation, success of change and transformation processes. And at the same time, you support the individuals with their stress level, with their purpose at work and really their career development.
Julia: It's pretty remarkable. And the other thing is you've got very diverse clients from lots of different sectors and now lots of different parts of the world. You've got an almost unique insight into these resource management techniques and tools. Are there any sort of places where you're finding you learn something in one place and it becomes immensely valuable in another area?
Matti: I think the scale and the insights that we're gaining is a key enabler for any future developments that we're seeing. So we're working with 3,500 coaches worldwide. We're having thousands, hundreds of thousands of coaching sessions and all these insights then help to educate, OK, how does good look like? How does a good coaching session look like? How does good impact of a coaching look like?
Julia: So then you can start iterating your offering.
Matti: Exactly. You can adjust your offering. You can really innovate and at the same time you can give clients a tool at hand, which is benchmarking, where they can see OK how is actually my coaching programme performing versus my peers?
Julia: So you can demonstrate the impact as well in I presume pretty short order, in terms of being able to demonstrate that data quickly?
Matti: Exactly. For example, in the automotive industry, we're working with the majority of European leading automotive companies. And many of them are currently in the middle of transformation from traditional cars towards EV. And it's rather easy to rebuild your factory. But how do you rewire your workforce?
Julia: Yes.
Matti: It's a huge challenge. And basically, there is no other tool than really coaching to make this change happen.
Julia: So you can identify where you've had an impact in individual transformative things that different companies are doing. It strikes me that this is one of those business models that can keep iterating and iterating. I mean, it's endlessly fascinating. So where do you see the next five years of your future?
Matti: An excellent question. What is really guiding us is the vision to democratise coaching. We know we have tailored offerings for executive, for manager level, for collective coaching, and now our newest offering, the AI coaching, really for the entire global workforce. So there's still a lot more for us to do. And then at the same time, we'll keep innovating and adjusting to the market's needs.
Julia: So I'm going to finish where we started. Because I need to understand the question as to why you were the CEO and your co-founder, your brother, wasn't, and how you chose to take on those roles. But also, what would your advice be for entrepreneurs who are just starting on their journey? What's the key thing that you've learnt either from a coach or just in your experience that you'd want to share?
Matti: Maybe first on working with my brother. I've been working with my brother all my life. And it's great if in business you have someone you blindly trust. You're completely aligned.
Julia: So that actually is just the ability to have somebody that you can bounce ideas off and really think about the next iteration of your business in a safe, trusted space. It feels a bit like a coaching relationship in some ways?
Matti: Exactly. And I think what coaching does, really, coaching helps you to reflect and to think about the challenges that you are addressing.
Julia: It's that spirit of actually talking things out and realising that you can vocalise something and then actually you can navigate it because you can vocalise it.
Matti: Exactly. And actually addressing the elephant in the room and trying to find solutions rather than eating all your stress and really building up problems. Maybe coming back on what's my key learning. I would say my number one key learning from twenty years of entrepreneurship, six and a half years with CoachHub is really the realisation that life is too short to do something that you're not passionate about. So really working with a coach has helped me each year and over and over again in each session to really realise that I love what I do.
Julia: That makes a great deal of sense. I mean, for me it's always been about the passion for the purpose of the work. Because to me that's the through line, whether things are straightforward or whether they're difficult or whether they're challenging, or whether you're having a good day or a bad day, always coming back to that purpose and the passion that you have for achieving that purpose is the thing I think that keeps all of us going.
Matti: 100%.
Julia: It seems to me that you've built a good business doing good. So I think, Matti, that's a brilliant place to end. So thank you very much indeed.
Matti: Thanks for having me, Julia.
