On 5 April 2016, more than 60 Founders and CEOs of the UK’s leading tech companies attended Kennet Partner’s London technology event. The event, chaired by Hillel Zidel from Kennet Partners, aimed to provide helpful insights on navigating companies through phases of growth upwards to $100 million plus in revenues to Founders/CEOs.
Chris Havemann and Murray Hennessy, both of whom have significant experience in scaling tech companies and led businesses at the $100 million plus revenue level, shared key lessons from their recent journeys. Chris Havemann was the Founder and CEO of Research Now (acquired by e-Rewards for $133 million), former CEO of RatedPeople.com, and is currently a Non-Executive Director at Kennet backed RealityMine and Homeserve plc. Murray Hennessy was the former CEO of trainline.com and is currently Chairman of Abcam plc, TGI Fridays and Kennet backed Receipt Bank.
Here are some of the insights shared from the event.
Growing from $0 - $50 million:
- Figure out the winning formula. Who are your customers, how are you going to meet their needs better than your competitors? To determine that might take some time, so look after your cash, and be resilient.
- Turn the handle. Focus relentlessly on that winning formula. Don’t get distracted, just do more of the winning formula.
- People 360°. Always be thinking about how you can improve the team around you, from the Board, to your direct reports and below. Spend more time on that and less time doing the work you did when the company was smaller.
- Take bold decisions on growth. Make calculated decisions, run the numbers. Learn quickly by having an open culture with good communication -- if everyone is open about sharing information, then you are more likely to arrive at a decision quickly. Make quick U-turns on things not working, rather than covering them up.
- Don’t procrastinate over difficult people decisions. This is especially hard when it relates to people who have been very good up to now and loyal to the business and the team. It can be especially difficult for founder entrepreneurs who have strong ties and loyalty to early team members.
Scaling from $50 - $100 million plus:
- Hire ahead of the growth curve and focus on quality. As a smaller company, you might need a ‘jack of all trades’ or generalist in a certain role, but as the company grows, you need more expertise and perhaps more people doing what was once one job. Be upfront and honest with prospective candidates that they are being hired for the long term, and they should expect to get their hands “dirty” in the short term.
- “The whole is greater than the sum of its parts.” Team forming is absolutely essential. Each of your team members can be individually talented, but nothing is worse than a broken team that acts as a group of individuals. A great test is whether a business has the ability to operate smoothly in absence of its CEO.
- Understand your unit economics and improve your margins where possible.
- Distinguish between the important and the urgent. Management should be sure to communicate with their Board on why something is important for the long term to avoid simply focusing on the urgent.
- Don’t be obsessed with dilution. Ensure you have enough cash and issue options to key employees as the business grows.
- Your communication format needs to evolve. Internally, you might be in one office altogether when you start, and five years on, multiple offices, multiple countries, etc. It’s important to evolve the way you work together and communicate as the business grows. Externally, be selective on who you speak to as you approach exit. Be sure to have a focused approach rather than a shotgun approach in talking to prospective buyers.
- Making mistakes is ok. If you aren’t making mistakes, you are likely not trying new things.