We held our ‘Accelerate’ event this week looking at how and when to scale up your company. It’s a tricky time for any business when several factors coalesce including funding, staff, leadership, and internationalizing your business. We were lucky to have a brilliant panel – Alex Depledge MBE who co-founded and sold Hassle before starting BuildPath, Anoop Unadkat COO of Metail, Philip O’Reilly, a partner from VC firm Draper Esprit, Simon Menashy, a partner at MMC Ventures – chaired by the brilliant Mike Turner from Taylor Wessing.
The panel covered a lot of ground, so we’ve pulled out our five key takeaways from the discussion.
1.Understand that you can’t do it all!
It’s essential that founders don’t think that they can do it all. The contribution of NEDs can help to raise the level of discussion and improve the quality of decision-making on the board, increasing the chances of the company acting in the best interests of its long-term security and prosperity. Alex Depledge was very clear that it is essential to hire NEDs and CEO mentors. She likened telling people she had an executive coach to admitting you had a mental health problem. You shouldn’t be ashamed of it but it’s difficult to bring it up as it looks like a weakness. Alex added, ‘When you start a business it takes a special kind of arrogance to think that nobody can help you’.
2.Hire fast fire fast
Whilst founders do need to be single-minded, you also need to admit to yourself and others when you have made mistakes. If you hire the wrong person, then you need to move them on and quickly. As Alex said, ‘People talk about hiring fast but forget about firing fast’. One of the biggest mistakes is spending too much on staff which may occur when a founder becomes overly eager and hires a ton of people. At first, you may believe all the new employees are needed. But this will just mean burning through your finances faster. To avoid this, hire only those truly needed and truly right for the role and take staffing up step by step.
3.Communicate your culture early
Build a culture, be clear about it and always hire to that culture. That’s always been very important to us at Propel.(https://www.propellondon.com/blog/2017/04/culture-and-values-matter )Don’t wait until you have forty people before deciding what that culture should be. Alex said that it is important to her to be transparent, let your team know exactly how things are going as it gets and keeps them emotionally invested. Simon told us that companies shouldn’t be afraid to show great culture even if it’s a little ragged around the edges
4.Don’t be afraid to say no to VCs.
You don’t have to be continually raising funds just because that’s what the model has always been. Don’t compare your business with what others are raising. If and when you do decide to do a round, take time to understand the difference between the different types of investments. ICOs are the darling of the tech community but whilst they might be right for some businesses they won’t be right for companies who want advice and backing rather than just cash. Following on from that, understand the difference between smart and dumb money.
5.Growth at home or rush abroad?
Don’t feel you have to expand internationally because that’s what others do. Make sure you have made the most of your home market before you expand, as you can put the business at risk by doing so. Phil pointed out that opening in other markets can potentially distract your management team, split resources and negatively impact your culture as senior management move to head up new markets.