Don’t rush to scale if you are ill-prepared to do so

Many tech startups go off the rails despite having the right people, enough resources, a good base of customers. Why? They often scale up too soon without working on building a cogent framework for transitioning to mature firms.

In fact, premature scaling contributes to 74 per cent of startup failures, according to Startup Genome that surveyed 3200+ high growth tech startups. Also, tech startups that scale properly grow 20 times faster than startups that scale prematurely, cites the same report.

So If you want to grow your tech startup at a steady pace, you should think twice before taking the leap.

Here are the five questions that can help you do successful scaling up of your tech startup.

1- Have you achieved your goals?

Every tech startup fixes goals when they started out. What are your goals? Have you achieved them?

It is not a wise decision to start the process of scaling up if you have not met or exceeded your previously set goals.

Some common goals for an early stage tech-startup are:

• Building a minimum viable product (MVP)
• Launching beta version of the product
• Hiring resource to start operations
• Launching the complete product
• Getting the first round of funding
• Setting growth milestones

You might have chosen any of these goals or different goals based on your tech business.

As all the startups are different, so are their goals. The point is you should meet or exceed your goals. Only then, you should think about scaling up your tech startup.

Also, scaling up requires you to set new goals (short term and long-term goals) for your tech startup. How can set new goals if you haven’t met your previously set goals?

2. Have you got your strategic plan right?

A strategic plan is a plan to achieve what you want to achieve. Your old strategic plan, if it didn’t incorporate future scaling up, might not work. It is because scaling is different than growing.

Therefore, you should tweak your strategic plan so that it can help you achieve new business objectives post scaling up.

And make sure that scaling up your tech start doesn’t adversely affect your existing work culture.

3. Have you made an aggressive marketing plan?

The idea of scaling up a tech startup comes into existence as the startup owner is poised to grow his/her tech business. Previously set business goals have been met or exceeded. Now, it is time to spread wings and search for a new market to grow rapidly.

However, scaling up won’t bring the intended outcomes if there is no solid marketing plan. Have you made an aggressive marketing plan?

Also Read: 3 ways to know if your startup is ready to go international

It goes without saying that doing marketing for a tech startup is different than the marketing for a brick and mortar store. So you need to leverage tactics that will deliver the real results.

Here are the six effective ways to spread the word for your tech startup and grow your business:

• Paid search
• Display advertising
• Organic and paid social media
• Email marketing
• Digital PR campaigns
• Content marketing

Most tech startups need to educate their prospects to convert them into customers. Therefore, content marketing is found to be an effective marketing strategy for tech startups.

Make a kickass marketing plan before you scale up your startup. Believe me, it will maximize your success.

4. Do you have enough resources?

Be it hiring more people, expanding your business to new locations, launching a new product, or run a marketing campaign, you will need money to run these operations.

How is your financial health? Do you have enough resources to scale up your business?

“Contrary to conventional wisdom, the most dangerous period for entrepreneurs is not when they start up from scratch but when they scale up for growth,” states Harvard Business Review.

When you are at the initial stage, there is very little to lose. But when you are scaling up your tech business, things can turn hot really fast if you don’t have proper financial planning in place.

So make sure you are able to use multiple sources of finance and raise money from investors before you take the plunge.

5. Have you forecasted your industry for the next 2-3 years?

The technology landscape is changing so fast that many tech products are becoming obsolete in just two or three years.

The competitive dynamics may change in the next 2-3 years as you focus on scaling up your tech business, which can make it difficult for you to stay profitable.

So it is imperative that you should make an educated guess about how the industry is going to move in the next 2-3 years. And the only way to do it is to be fully aware of the latest trends in your industry.

Also Read: From products to businesses: the hidden opportunities of IoT

Subscribing to newsletters of your industry, keeping tabs on Google Trends, and regularly talking to your customers are some proven ways to make an educated guess about the latest industry trends.

Final thoughts

Scaling up your tech startup is a big decision. Once you have taken this decision, it is difficult turning back. So have answers to the above questions to make scaling up more successful.

What about you? Have you scaled up your startup recently? Share your experience. I’d love to know about it.

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Why an existential crisis is actually not bad for you

 

 

 

When you are my age, chances are that you’ve experienced an existential crisis or are currently in one.

This crisis, typically in midlife, is signalled by feelings of emptiness, pointlessness, and lack of fulfilment. Life on the surface might seem reasonable, but underneath there’s discontentment brewing.

Boundaries

 

The seeds for this is laid in our childhood. During the early stages of life, we make sense of the world and our role in it, through the strong influences around us – society, family, religion, peer group.

Our views on key questions like what is success? what is happiness? what is morally right and wrong? are all shaped by these forces.

Over time, these get re-enforced by appreciation and corrected by criticism. We go through life traversing within these boundaries defined for us.

Crisis

Also Read: Stan Lee’s 5 lessons on business and life

When we hit mid-life, even though we may be doing well – have the 5Cs (Cash, Card, Condo, Car, Club Membership) in the Singapore context, or happily married with kids – something seems off.

We feel sad and restless. We are intrigued by our unhappiness, as nothing can explain it to us. To get over this, we create excitement in our life by buying a convertible, going on a shopping spree, or taking an extended vacation.

This gives us temporary pleasure, but the sinking feeling re-emerges shortly after.

Inwards

 

Now we are officially and visibly in an existential crisis. The unhappiness leads us inwards. We question everything in life. Do I really need the 6 figure salary? Am I spending enough time with my kids? Am I making an impact?

We even challenge our own existence. With time, patience, curiosity and deeply personal work, we start dissolving away some of the boundaries set for us. If we are lucky, we have a wise friend, therapist or coach support us during this phase.

We open up to the possibility that some universally accepted truths like marriage, babies, or a 9-6 job may not be for us.

Freedom

Also Read: 3 lessons I learned as a student entrepreneur

As these boundaries dissolve, we feel a sense of freedom. The suffocation is lifted, and we feel empowered. With this newfound lens of possibility, we test our limits by exploring alternative career paths, experimenting with passionate projects, or giving a shot to things we’ve been curious about, but afraid to try.

In this unfamiliar territory, with our successes/failures, happiness/sadness, we start getting a deeper understanding of ourselves. We discover what drives us and what’s important to us.

Boundaries

Floating unconstrained, after a while, however, makes us dizzy. Without an anchor, we get knocked around aimlessly. We feel the need for principles and guidelines to ground us.

This is the time to turn to our values, beliefs and gifts. These are easier to access, given how deeply we are in touch with ourselves. Our values and strengths help re-erect new boundaries.

These voluntary principles, coming from within, enable us to find our authenticity, unleash our potential, and start living a purpose-driven life.

The above is a simplified version of the different phases in an existential crisis. Everyone, however, has a unique experience, rarely as structured and linear as described above.

An existential crisis does not always lead to a drastic change in life, but it helps us discover and define ourselves by our core values. Sometimes, after quitting our job, we may realise that having a steady career, after all, is essential to us, leading us back to that path.

Also Read: Founder depression and how to tackle it

This time, however, with a stronger purpose and belief. In a nutshell, an existential crisis leads us inwards, enables deep personal work, and steers us from the universal to the authentic individual self.

 

 

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Also, Gojek adds energy tycoon Garibaldi Thohir as commissioner, India-based fintech Zeta raises Series C funding

WeWork to go IPO in September [Techcrunch]

Co-working space unicorn WeWork speeds up its plans to go public as it is expected to unveil is S-1 filing next month just ahead of a September initial public offering.

Earlier this year, the company that goes by the name The We Company is already valued at
US$47 billion. According to Techcrunch, the company is now in the process of meeting with Wall Street banks to secure an asset-backed loan upwards of US$6 billion in what could be an effort to downsize its upcoming stock offering.

WeWork has raised a total of US$8.4 billion in a combination of debt and equity funding since it was founded in 2011. Its IPO is poised to become the second-largest offering of the year.

WeWork is currently backed by SoftBank, Benchmark, T. Rowe Price, Fidelity, and Goldman Sachs.

Following rebranding, Gojek adds Garibaldi Thohir as commissioner [DealStreetAsia]

After announcing rebranding two days ago, Gojek announced the appointment of energy sector tycoon Garibaldi Thohir as its commissioner. Garibaldi Thohir is the president director of coal mining giant Adaro Energy.

Garibaldi Thohir acquired Adaro with a consortium of Indonesian businessmen in 2015 from Australia’s company New Hope. He occupied the 16th position on Forbes Indonesia rich list in 2018.

Also Read: Go-Jek unveils new logo as it enters next phase of growth

He established a motorcycle financing company Wahana Ottomitra Multiartha (WOM Finance) in 1997 and also owns a stake in Hutchison 3 Indonesia, a telecom services company.

He graduated from the University of Southern California in 1988 and received an MBA from Northrop University, California, in 1989. Garibaldi Thohir recently invested an undisclosed sum for a majority stake in Muslim app Umma, founded by Northstar Group’s Indra Wiralaksmana.

India-based employee benefits startup Zeta raises Series C investment valued at US$300M [Press Release]

Zeta, cloud-based credit, debit, and prepaid products issuance platform for the employee benefits based in India, announced that it has raised a Series C funding from Sodexo Benefits and Rewards (BRS), at a valuation of US$300 million.

Zeta said that it will use the fund to expand its cloud banking platform and digital payments solutions in the United States, United Kingdom, Europe, and Southeast Asia.

Zeta was established in 2015, and currently has products such as a full-stack cloud-native neo-banking platform for issuance of credit, debit and prepaid products that enable legacy banks and new-age fintech institutions to launch retail and corporate fintech products, as well as an enterprise solution for corporates such as automated cafeteria, employee gifting, & R&R.

Until now, Zeta has been funded by co-founders Bhavin Turakhia and Ramki Gaddipati. With this investment Sodexo will have a minority stake in the company.

Indonesian salestech Pomona completes US$3M funding from Vynn Capital [e27]

Pomona, an Indonesia-based omnichannel marketing and sales-tech startup, announced the completion of US$3 million in “Series A-2” funding round led by Vynn Capital. Joining the round are Ventech China and Amand Ventures, as well as existing investors Stellar Kapital and Central Capital Ventura.

Pomona said that it will use the funding to introduce new services, accelerate product development, and hire new staff. New products will include tools for companies to improve supplier and retailer relationship management and improve business transparency.

Also Read: Digital platform for employee benefits Zeta invests in human capital management company ZingHR

Pomona was co-founded in May 2016 by Benz Budiman (CEO) and Ari Suwendi (CTO) with a focus on providing digital marketing and sales services for global consumer packaged goods (CPG) and fast-moving consumer goods (FMCG) industry. Pomona leverages consumer cashback options to facilitate brand-consumer engagement and promote sales conversion. The approach allows customers to receive money back on qualified and promotional goods by uploading a proof of purchase photo into its app.
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BNI is yet to decide whether to acquire an existing VC firm or set up a new fund altogether

Indonesia’s state lender Bank Negara Indonesia is planning to launch a VC fund worth up to US$50 million, DealStreetAsia has reported, citing a top official.

The company will execute the plan in the second half of this year, the report added quoting BNI’s Finance Director Anggoro Eko Cahyo.

BNI is yet to decide whether to acquire an existing VC firm or set up a new fund altogether.

The VC arm also plans to invest in Fintek Karya Nusantara (Finarya), operator of mobile payment platform LinkAja, from this fund. BRI Ventures will also join this round with an investment of about US$25 million.

LinkAja is an integrated e-wallet service, which was created through the merger of telco giant Telkomsel, Bank Mandiri, BRI, and BNI. Government-owned bank Tabungan Negara, oil and gas firm Pertamina, and insurance Jiwasraya are also investors in LinkAja.

Also Read: Telkomsel’s LinkAja partners with Go-Jek, adding the digital payment option to the unicorn’s main app

The LinkAja investment will happen over three phases, confirmed Anggoro. In the first phase, BNI will invest through its brokerage arm BNI Sekuritas, while the second and third tranches of investment will come from the VC fund.

Besides Finarya, BNI said it’s also looking to back startups aligned with its core lending business through the proposed VC fund.

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Grit in entrepreneurship is the ability to pursue a higher-level goal with sustained interest for a long period of time

Grit. It’s a topic that you’ve probably heard people talking about, but what exactly is it? How important is it, and how can you harness grit in achieving your life’s goals? To answer this, I wanted to share some insights I have gained, along with my personal journey and a practical framework I have developed for the purpose of cultivating grit.

In July this year, I graduated from the Kauffman Fellows Program, a two-year educational, networking, and leadership development program designed for innovation investors. During this program we had the opportunity to meet with many highly accomplished venture capitalists, who personally shared their experiences and insights across all facets of entrepreneurship. One such venture capitalist was Albert Wagner, a Partner at Union Square VC who raised a specific insight into the importance of grit in entrepreneurship, which he defined as the ability to pursue a higher-level goal with sustained interest for a long period of time.

Grit in entrepreneurship is the ability to pursue a higher-level goal with sustained interest for a long period of time

While many of us understand the value of hard work, it is only recently that deeper research into quantifying the importance of sustained hard work has been undertaken. The leading authority on grit is Angela Duckworth, an American academic and author whose famous TED talk started the conversation about the relationship between grit and success (you can watch her talk here).

Angela observed that at the West Point Military Academy, traditional measures of aptitude, intelligence and fitness failed to accurately predict which cadets would pass the Academy’s “beast barracks” program, a particularly gruelling program that cadets had to pass in order to be inducted into the prestigious school. But, consider this — despite the highly selective process to get into West Point (only 8% of the 14,000 applicants are admitted) — one in five will drop out during beast barracks.

To understand this trend, Angela developed a test to measure the level of “grit” each of the cadets had upon starting the program.  The results of her test were statistically significant in predicting whether a candidate would pass and become a cadet, proving both her hypothesis and the integrity of her test. Since then, this same test has been used across several other types of groups including students in education, sales teams in companies, and even couples in marriage. In each study, Angela confidently demonstrated a correlation between success and a higher level of grit.

Talent, without hard work, equates to unmet potential

It may seem intuitive to us that hard work would correspond to greater success, however this is rarely reflected in our current societal attitude. We frequently remark at how talented or gifted successful people are — “He’s naturally a genius … It’s in her genes, and so forth.” Some high achievers also refer to their own success as being a product of luck. While there is no doubt talent plays a role, the reality is that talent without hard work simply equates to unmet potential.

Also read: 3 lessons I learned balancing a successful e-commerce business with a full-time day job

It is through our human nature that we like to think success comes from fortune or good genes. Holding this belief allows us to take away the burden of hard work from ourselves. Take for example, the world’s greatest athletes. These athletes exhibit physical attributes advantageous for their sport. However, it is only those athletes who train the hardest who will reach the pinnacle of their discipline.

My personal story

My personal story about cultivating and exhibiting grit began when I was young. At primary school, my grades (and my time spent doing my homework) were unremarkable and mediocre at best. However, one day, in the dining room at my boarding school when I was 10, I asked my tutor about the names listed on wooden boards on the wall. He replied that they were the students who were admitted to Oxford and Cambridge. Without knowing much about either of those universities I responded that I would also like to go to Oxford or Cambridge.

His reply straightforwardly indicated that I wasn’t smart enough and that only the brightest students were accepted, therefore I should not aim for it. This rebuke, which left me in tears, created a strong urge to study like never before. Every evening, I could be found in the classrooms doing extra work to climb the class rankings. I worked so hard that in my school report my tutor advised my parents, “all work and no play makes Jack a dull boy!”

The hard work paid off and through a scholarship exam I was admitted to a well-known secondary school.  I continued studying hard and resolved to attempt more GCSE subjects than anyone in my year.  At GCSE, I achieved 12 straight A grades (6 of which were starred A’s). This continued through to my A levels where I achieved 4 A’s and was admitted into Cambridge the following year.  My goal, which I had set for myself at 10, was achieved not due to my IQ or innate academic talent, but through deliberate preparation and working towards a long term objective for 8 years.

An attribute that can be cultivated with the right ingredients and environment

Since then, understanding and valuing the importance of grit has many implications for me in my work and life. As a father, I’m finding ways to nurture grit in my children.  As an amateur triathlete, I’m constantly looking to cultivate grit in my training.  As a venture capitalist, we look for founders who demonstrate grit. Fortunately, what I increasingly realise is that grit is not something that you have or do not have.  It is an attribute that can be cultivated with the right ingredients and environment.

In the case of our children, it requires active management in how we communicate and motivate them.  Among parents, it is not unusual to hear comments about how clever children are. For example, “He’s so smart, he can already read at 3.”  Unfortunately, what this type of communication breeds can be counterproductive. It instils the notion that they can do something because they are smart.  With this label, they begin to avoid tasks that do not come easily as it would contest their intelligence. Studies therefore suggest now that it is therefore better to praise hard work and persistence, for example, “he’s worked really hard to be able to read at 3.”

As an amateur triathlete, I’ve had to develop grit to keep at a rigorous training schedule.  I start with a higher level goal: that I want to be fit into my 80’s and that I also want to compete in an Ironman with my kids one day (which is at least 20 years away).

This is coupled with a long-held belief that being physically fit is a key part of my present and long term well-being. Ironman, a long-distance triathlon, is a particular sport that I have developed a passion for that has lasted long past I completed a full Ironman in 2013. I’ve found that it’s not only the physical side of the sport that attracts me but the stories about people who have battled against the odds to finish.

Also read: I finally understand what makes an angel investor tick

Watching, learning and listening to these stories as I train, have filled me with motivation and energy for my own training. I started properly training in 2013 and have been continued a regular regimen to this day, adopting it as a way of life and part of my daily routine like eating and sleeping. Over time, I’ve improved my times now qualifying as an “All World Athlete” in the top 5% of my Age Group for 70.3 races and invested in my triathlon knowledge having just recently passed my Ironman coach certification. I’ve been fortunate to find people around me who share this interest, including my wife and my brothers who support me to invest the time into improving in this sport and sustaining my motivation even when it dims.

Pole, Purpose, Passion, Persistence, and People

These experiences and learnings have culminated into a personal philosophy, and to put this into practice, I developed my own framework to better understand it – I call it the 5 P’s: Pole, Purpose, Passion, Persistence and People. These P’s are what I consider to be the key attributes most important in cultivating grit.

First, you need to identify a Pole: an overarching destination or goal that you are in pursuit of.   To get there, it’s necessary to understand the “why” behind your goal — hence the Purpose.  Once you’ve rationalized the goal, there also needs to be intrinsic enjoyment from the activity and therefore developing your Passion is next. The pursuit of any long term goal also comes with great challenges, so developing Persistence through routine and mental resilience is critical. Lastly, in any mission, success comes easier when the right People are involved.

This framework is the very tool I have used to help me develop a high level of grit in everything that I do. I hope that this can also serve as a tool for others as a first step in cultivating grit and harnessing it to achieve your life’s goals.

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This article was first published on e27 on September 11, 2018.

e27 publishes relevant guest contributions from the community. Share your honest opinions and expert knowledge by submitting your content here.

Disclaimer: Convergence Ventures is an investor in e27.

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