The information provided by the interview are the opinions of the interviewee, Mike Fairbairn. The following blog interview should not be construed as investment advice.
Today we talk to Mike Fairbairn - partner at 8
Dimension Ventures (‘8DV’) and investment adviser to the new Fund, Pure Potential I LP - an exciting new fund with
the objective of making targeted investments in health
and wellness-focused businesses.
Mike, you and your co-founder at 8 Dimension Ventures, Helen Corey, have extremely impressive backgrounds, with decades of experience between you spanning the banking, healthcare, and philanthropy sectors. Where did you two meet and what was your journey towards the birth of 8 Dimension Ventures, and ultimately, the Pure Potential I Fund?
What is it do you think about your partnership that makes it so successful?
Helen and I are from different vintages, different nationalities with different experiences in life. But we are aligned where it counts; a core frustration with challenges (in organisations and the health crises for people & planet), but combined with an excitement to harness the opportunity (and morale responsibility) to use our skills, network and resource to support entrepreneurs with the goal of improving people’s lives, something we enjoyed doing separately before coming together (with others) to do so much more effectively.
There are many things that form the basis of our durable partnership, but one is integrity; something we often find lacking in many organisations. Things always go wrong! The ability to raise a hand, accept and move on effectively is vital. We have seen a lack of integrity cause destruction en masse, from a trading floor to a forestry project. We have to be better and whilst it can hurt, nothing is better than acting the same when alone in the room as you would when others are in it with you.
For those who are unaware of the 8 Dimensions of Wellness, could you briefly describe these underpinning principles which will define the purpose and ultimate investment strategy of the Fund? How do these principles interconnect?
If there was an ideal, ‘utopia’ type company if you will, which would best encapsulate these principles, what would it look like to you?
Our thesis is grounded in science, with the 8 Dimensions of Wellness long pre-dating our existence as a cornerstone in academia for many of the world’s leading educational institutions. However, despite courses from Harvard to the framework set out from the U.S.A.’s Federal Substance Abuse and Mental Health Services Administration, it has slipped off our radar in the day-to-day. We believe this needs to change. The underlying premise is around homeostasis; that balance is necessary to maintain a healthy existence, whether an individual, a company or a nation. There is no perfect sweet spot, but with a platform to quality assure and test correlations, we can not only enhance benefits to other Dimensions, but importantly reduce negative externalities.
Take an example: it is tough for us as people to make positive physical health decisions (nutritional, exercise-related) when we are mentally stressed, financially strained, living in an environment that is polluted or perhaps where we lack social well-being. Likewise starting anywhere else around the 8 Dimensions, there are always trade-offs, but arming people with the technology and solutions to be aware of “where we are” improves our decision-making process and acceptance of intrinsic value. There is no set destination in the 8 Dimensions, only a guide to enjoy life to its fullest.
Our favourite companies tend to be those with a clear drive within some of the Dimensions rather than being “all things to all people”, but importantly 1) are not causing harm elsewhere across the 8 Dimensions, and 2) seek to embolden broader impact areas as they grow their footprint in the market, with our support.
How much of an impact do you think the global Covid-19 pandemic has had on how people now look at their health and wellness and how do you see potential investee companies reacting in the post-lockdown environment?
A key ethos of 8DV is around ‘prevention rather than cure.’ Do you think that the UK is facing a significant future cost as a result of missed diagnoses during the pandemic, and do you see the potential for start-ups focusing on this facet of the healthcare industry?
We will never know the true cost of Covid-19, but we can certainly see many areas which need nurturing. Equally, we see a diverted focus towards many things that matter, whether close to home or in distant lands.
Misdiagnosis is a daily killer, and at the very least an inhibitor of feeling as good as we can/want to, and we seek to reduce this with the best minds in the world. In life as humans, we all make decisions based off probability (“risk-reward”) in everything we do, often without knowing. Almost always, this is based off imperfect information. That’s the beauty of life! So rather than take away this essence of existence, we aim to help develop the tools for better measurement, management and monitoring.
Prevention is where most people sit at any one time; it’s where the greatest impact truly is. However, it is much tougher to “sell” prevention than a cure, given the panic associated with needing a cure and the lack of transparency into how to prevent in the first-place. To be clear, we believe in the need for both prevention and cures (we are where we are in the world in terms of biodegradation, global obesity, malnutrition and inequality littered throughout), and cures are indeed preventions for further problems. But to “catch the fall” and avert crises where possible emboldens a happier planet, a happier populous and a significant reduction in social, environmental and economic costs.
We must bridge this gap in thinking and implementation.
You have talked about your own health and wellness journey and how it has led you to be the type of investor you are now, how much has the experience of your journey led to the principal ideologies of this fund?
Health is personal and everyone has their own story – health is not optional! Quick fix solutions to our health remain rife and, unfortunately, easily marketable for suppliers and tempting for buyers. As consumers (as humans,) we are emotive beings thus tend to reach for something to take care of an immediate want/need, rather than assessing if it’s good for us “tomorrow” and if it can evolve into a longer-term solution. This contains no judgement, and I myself am included in this statement, but short-term gratification seldom results in a sustainable success and we seek to move the dial in a sustainable, human-conscious way.
The Fund’s Information Memorandum talks about timing and opportunity, that venture activity in the healthcare sector is booming and that the ‘challenge as a new health-tech investor is finding the insight that everyone has missed.’ Where do you believe these areas lie outside of the ‘traditional’ healthcare fundamentals and how will you encourage would-be investors to look beyond these and come with you to invest in wellness companies beyond the core?
The main way to summarise is to connect the dots between these more traditional areas. They must be viewed holistically. Concurrently, revitalising “Lifestyle” as a sector, enabling the Consumer and Healthcare verticals to communicate more. It’s potentially unpopular for a profitable business serving junk food or extreme medical drugs to have a market driver reduced, and it’s up for the reader to decide if either of those “products” should really even exist, but the people are speaking out for more ethical approaches, along with the data we are very close to. As humans, we are remarkably adaptable, from our taste-buds to altitude to immune systems, thus our “utility” (or more simply, satisfaction) is a temporary variable. Think how entertained people were in history without technology; think how much fun a simple book or ball gave to us as children?! The same is in terms of what we consume, how it tastes, and how our minds and bodies can be healed. We really can have our cake and eat it, and ensure we don’t damage the opportunity for someone else to have a slice too. But that is no easy feat and we believe profitable enterprise plays a crucial role to get there.
There is a staggering investment opportunity here already boasting avenues for positive impact and outsized returns. But we are at the tip of the iceberg, thus we are excited to be a part of this seismic shift in mindset and corporate culture, but MUST do so very selectively by using the 8 Dimensions as a platform to properly assess veneer and where scalability of impact sits, without shifting a problem.
Coming to another of the 8 Dimensions of Wellness - Environmental - and I know looking at some of the companies that you have previously invested in, for example Earthly and Cheeky Panda, that this is an area of real importance to you and Helen. How do you see the landscape changing in the types of companies coming forward who will meet the criteria for investment in this sector?
As individuals, we love to speak to anyone with a passion to improve (and protect) our natural world. It is not something to take for granted. However, as a fund, we tend to favour disruptive approaches that waste less time than stepping stones brands that focus on a “better” product/service. We aren’t fundamentally against the latter, we just believe that time is of the essence and the bigger shifts we can make will result in greater positive impact alongside outsized returns. That said, we do still seek to support companies that will “replace” unethical physical products. We are no stranger that a path to positivity can be needed, lest people will not understand and simply revert towards ostracising further.
Earthly is a great example of the former; it is pioneering an AI/VR approach to nature-based solutions (which can feed through to portfolio measurement), and they’re leading the charge with satellite-technology and visual transparency to climate enhancement projects. “Planting trees” is one thing, but what trees, where, how are they getting on, do we need to amend our best-laid plan from 3 years ago, what’s the societal impact? Most importantly, how do we go beyond monitoring, but transport the individual or company implementing a carbon offset project to the ground from their own living room, making it more relatable, transparent and visible. That’s the secret to improve sustainability, lest “out of sight is out of mind”.
Staying on the environment - we have the COP26 climate summit here in the UK, Glasgow in October and following last month’s stark report from the IPCC on the existential threats facing the planet as a result of human activity, the spotlight will be firmly on the world’s leading economies and how they plan to accelerate the net zero emissions targets of the Paris Agreement and make turning the tide on the climate crisis a reality. Is it a priority of the Pure Potential, I Fund to try and make an immediate impact in this space by investing in the right companies with real ideas to effect this change? Do you believe the start-ups capable of this are out there?
We have been investing in environment-enhancing companies for decades across our team. The space is evolving at a rapid pace and we must stay close to broad sources of reliable data, but the premise is clear that time is not in excess and our focus must not waver here.
At the very least, all of our portfolio must have a clear path towards environmental well-being, and plan to stay current and knowledgeable as evidence develops. However, we deploy more broadly across impact investing, and remain believers that to best ensure all challenges are solved in the world, we maintain a healthy populous to make better decisions, and that there is resource left available to devote when needed rather than used for clean-up costs and huge social burden (healthcare being a clear example). We find this approach to have a multiplier effect for the natural world. Whilst over time we seek to balance the 8 Dimensions, we will of course have some elements of over/under-allocation to certain Dimensions as we see a larger want and (importantly) need in the market for a certain area of impact. But again, all are inextricably-linked on both negative externalities and solutions for change.
Mike, you have said that you are a believer in ‘goals-based advising’ - can you explain to us what you mean by that and how you will take that ethos forward with your investee companies?
Far too often, as is the case in many walks of life, whether in sport, financial planning or parenting, an overly pre-determined template (sometimes “one size fits all”) is applied, which can harm outcomes and sustainable relationships. Implementing that mindset into investing is crucial from the get-go. We must know where we are seeking to go, and importantly why that’s the case. Only then can we retrofit (or “build back”) the best plan we can to get there. Advice, coaching or mentoring is core to being in any investment relationship, and it must be given honestly, but with a clinical understanding of the goals for the counterparty, lest the advice is not tailored nor likely to be followed through on. We have learnt this across decades of advising clients in various assets classes, and enjoy sharing these skills now more heavily in earlier stage private investing.
Finally, Mike, fast forward to December 2026, the Fund has met its minimum targets, invested in its core ideal companies - how do you think you might have changed the world?
The world will look very different in 2026 than it does today. To navigate unchartered waters, we need the best minds and morals around the table to ensure we move forward as smoothly as possible, noting there will be black swans and unpredictable factors we cannot yet predict.
We are collaborative and co-investment minded to ensure the right people are met with the right capital and expertise, and always interested to share what we can to get that job done quicker, durably. We have already transformed thousands of lives and hope that number to keep growing, but importantly in ways where people have a say, voice and choice in why. People need to have some hand in the decision-making process, yet problems will yet again swell. So by empowering those either without a vote or those “too busy” to pay attention, we believe our impact will be vast across time.
That all said, we often bring it back down to the basics: encourage one person to make one kinder decision, and the results will follow. Perhaps it’s thinking big whilst thinking small too, likely a bit of both!
The information provided by the interview are the opinions of the interviewee, Mike Fairbairn. As such, it should not be construed as investment advice or a financial promotion.
Investing in start-ups and early stage businesses involves risks, including illiquidity, lack of dividends, loss of investment and dilution. It should be done only as part of a diversified portfolio after taking professional advice. Sapphire Capital Partners LLP is the Investment Manager of the Pure Potential I LP Fund. Sapphire Capital Partners LLP takes no responsibility for the above information or for any recommendations, opinions and inferences made by the interviewee. Sapphire Capital Partners LLP is unable to provide investment advice and this interview is not directed at or intended for publication or distribution to any person (natural or legal) in any jurisdiction where doing so would result in contravention of any applicable laws or regulations.