Lessons from a cultish London bakery

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One day several years ago, I wandered into a local deli and bought a loaf of bread unlike any I had ever eaten.

Its crisp, dark, poppy seeded crust was mouthwatering enough on its own and the bread itself was so soft and squidgy it was like biting into a pillowy crumpet.

“Where do you get this stuff?” I asked the deli owner on my next visit. “The Dusty Knuckle,” he said, explaining this was an east London bakery and what I’d eaten was something called potato sourdough.

The Knuckle, as I came to know it, is now a mushrooming star with 118 employees at three sites selling what Nigella Lawson calls magnificent loaves. It supplies Ottolenghi eateries, Michelin-starred restaurants and hordes of hipsters who queue for its £4.50 sausage rolls.

Not bad for a business that was being run out of a shipping container in a car park seven years ago by its three young founders: Max Tobias, a youth violence prevention worker; his childhood friend, chef Rebecca Oliver, and her former restaurant colleague, Daisy Terry.

But this year, I discovered the Knuckle does more than great baked goods. It also helps young offenders get their lives on track. Each year, it puts dozens of 18 to 25-year-olds through a paid training stint that aims to teach everything from basic time management to knowing how to behave in a professional environment.

More than 70 per cent of trainees go on to paid work, more training or further education, and demand for places is so high that the business last year set up a Community Interest Company to help find more potential employers for its trainees.

All this has put the group on track for both commercial and social success, which is far from easy. So what are the dos and don’ts of creating a business like this?

This is what Tobias, the 41-year-old son of two doctors, told me when I went to see him at the Knuckle’s main bakery in the inner London borough of Hackney, which is where he grew up.

First, focus on making the business shine and don’t say much about its social mission, especially to frontline customers. That mission should be influencing everything in the business anyway, says Tobias, who thinks it wrong to “sell your product on the back of someone else’s vulnerability”.

Second, try to avoid conventional outside investors because, as Tobias puts it, the kind of geezer with 60 grand to spare is likely to be more profit-orientated than you are.

The Dusty Knuckle has had important help from charities but still has no external investors, mainly because its three founders worked awful hours in stressful conditions for years on end — for £800 a month or less.

This reminds me of a successful green energy businessman I know who likes to say that being an entrepreneur is a joy when all goes well, but is otherwise like getting up each day and having to drink a cup of cold sick.

Tobias and his partners paid themselves nothing when they started the business, and worked second and third jobs before a 2014 charity prize win gave them the rent-free but uninsulated shipping container.

For three years — with new babies at home in the case of Tobias and Oliver — they worked through the night to make bread and in winter temperatures so icy it was a struggle to get the dough to rise.

“It was just carnage,” says Tobias. “All of us have got quite traumatic memories of that time.”

Still, the founders were buoyed by something they did early on that helped: find people who had already done what The Dusty Knuckle was aiming to achieve.

That included James Timpson, who employed hundreds of ex-offenders at his family’s eponymous retail chain before becoming prisons minister this year.

Tobias says Timpson gave helpful advice on funding (there were agencies that would help) and resources the business would need to find and hire ex-offenders.

Ultimately though, any successful enterprise needs something no advice can deliver: pluck.

The Knuckle partners were repeatedly warned not to take out a lease on a second property during the risky months of the pandemic but they went ahead anyway and were soon marching on to greater expansion.

It was another horribly stressful time, says Tobias. “But it also transformed our business.”

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