Business, leadership, North East England, Success, Technology


pexels-photo-704767.jpegFor almost two decades, until retiring recently from corporate life, I worked for Sage Group where I held the position of Chief Product & Delivery Officer. You will all have heard of Sage. Three million customers across 27 countries, 13,000 employees, and a FTSE100 Tech Company with its spiritual home in Newcastle upon Tyne.

Also, for the past 5 years I’ve been one of the founders and vice chair of Dynamo North East…  a North East of England organisation whose purpose is to achieve national and international recognition for the North East’s tech sector by bringing together private sector, public sector, education establishments, local government and employer support groups, through collaboration, provisioning of skills and creation of opportunities, to deliver economic growth and prosperity for the region.

Across both roles and more besides, I’ve worked with hundreds if not thousands of startup and scaleup businesses all around the world, and I’ve always been intrigued by what makes some successful and what makes some fail. Here are a few of my thoughts.

At this point I could make this very easy and say secure more funding, hire the right people, build a great product or service, and develop a fantastic marketing campaign, sell more product and end the post.

However, it’s not quite that simple.

According to a recent report by The Scaleup Institute Scaleup doesn’t happen overnight (or at least it didn’t used to … but somebody forgot to tell some of the new tech businesses who didn’t exist a few years ago and now dominate their segment).

My own experience based on the businesses I’ve worked with is that traditionally it takes around 10 years to become a scale up business (the definition of scaleup here is > 50 employees).

This generally reconciles with the Scaleup institute data that shows only 1/3 of scaleups are < 10 years old and most scale ups are > 20 years old.

The highest growth scaleup businesses seem to accelerate between 5 and 10 years old, and there seems to be evidence that there are multiple scale points, i.e. once you start to scale you gather momentum, then plateau, then go again, but it also gets more difficult to scale the larger you get.

So, what are the barriers to scaling up a business?

The consensus, from a variety of published sources, seems to be: Access to skills, Access to markets, and Access to funding.

No real surprises there, and in fact access to funding was reinforced in the recent EY Fast Growth Tracker survey which cited funding as being THE biggest barrier to growth for startups.

Yet despite that, in a separate survey of startup businesses, half of the respondents said they expect to grow by 50% next year … and if you are a tech company then you are amongst 65% who say they are looking to grow by 50% next year. To fund this growth 84% of all these businesses are looking to raise capital. However, 40% of those seeking funding also see the effort needed to do this as a major distraction to running their business on a daily basis.

So, the killer question is – how do startups become scaleups?

Here are some of my musings from those who have been successful, some of which I’m sure you will have come across before:

“Make sure you know why you do what you do … not what you do or how you do it, but why you do it”

Why do you exist and why are you different from your competitors. It’s important to know this if you want to win. Google an excellent TED talk by Simon Sinek if you want some great pointers on this.

“Wisdom is cheaper than experience”

As a startup I expect you will know everything about your business today, but I can guarantee you won’t know everything about scaling a business.

Find someone who has already made the mistakes you will undoubtedly make as you look to scale. You will save yourself a lot of time, money and pain by doing this. Seek out a business mentor or a coach … they really do work!!

“Scaling looks chaotic from the outside … and it looks chaotic from the inside as well”

To scale you need to change (what got you here won’t get you there … in fact what got you here won’t keep you here).

Where you once had 100% doers expect this to change to leaders and doers as you Introduce managers… this is a change to the way your business works and you need to carefully lead your people through this journey.

Your Key People who used to know everything won’t know everything anymore – and this may result in some leaving as they no longer feel part of the inner circle.

And you as the owner may need to make the biggest change, i.e. can you bring yourself trust others with your company.

“Unless you are in the business of making telescopes don’t spend too much time focusing too far into the distance on a long term vision”

Everyone wants to own or work for a massively successful business, that’s not a long term vision it’s an ambition.

Of course, you will need know where you’re going, but I guarantee you’ll have more success executing a series of short term (quarterly) visions than one long term one.

This way your business will also be more responsive to change, as the only real constant in business is change, the market dynamics change, the competition changes, technology changes, people change, and your business needs to respond at the speed of now!

“A team players” of a startup don’t necessarily make “A team players” of a scaleup

You may need hire new Execs to scale. This being the case, where do you get the right type of experience?

  • First principle – Hire people who can learn fast and adjust. Hire for Values, Attitude and Skills in that order. How many of us have got this the wrong way around?
  • Second Principle – seriously consider what the new persons net effect on output will be. We’ve all worked with or even hired those lead boots people who negatively impact and drag down a team, this can be catastrophic to a start up business and lead to decline rather than scale.

You need to look for people who will inject belief, passion and energy into the team, just as you do today.

“An injection of capital is not in any way like a student loan”

Please don’t blow it all during freshers week, and make sure you use the capital on growth initiatives not business as usual activities.

Also, if a growth initiative isn’t working, be brave and stop it, before it stops you, and manage costs wisely and keep spending money like it’s your own even if it’s not!

“Winners don’t have time for complacency”

Don’t take your eye off the ball whilst scaling. Many people will use change as an excuse for poor performance – it doesn’t have to be – productivity should not reduce during times of change, it should increase.

And back to the funding point I shared earlier, don’t let this be a distraction. Get some help to either keep your business running, or to help you secure the funding.

Number eight … go back to number one!

Finally, across the businesses I’ve worked with over the years I recon there’s one very important question that 95% very rarely, if ever, ask themselves:

“How To Win?”       

If a business knew the answer to this and could do the right things to achieve it then they would surely grow and achieve scaleup.

But that’s a topic for another occasion … or a subject for a book, or maybe the USP for my new company 😉


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