How to Scale a Purpose-Driven Venture

Mike Quinn is a 2007-08 Skoll Scholar and Oxford MBA alumnus, he is also the co-founder and former CEO of Zoona, one of Africa’s earliest fintech companies. With over 10 years of experience running a successful social business, Mike shares his hard-learned tips and experiences on how to get a purpose-driven venture started, built and scaled. This is the third, and final article in the series, how to ‘scale’.

I started this three-part series with some tips on how to start a purpose-driven venture:

  1. Start by falling in love with a big problem
  2. Pick the right co-founder(s)
  3. Rapid prototype to discover product-market fit

I then shifted focus to the next stage of a company lifecycle, how to build:

  1. Build a model
  2. Build a team
  3. Build a culture

Now it’s time to learn how to scale. This is the stage that every entrepreneur and investor wants to get to as fast as possible, but it’s also fraught with challenges when you do.

Know When to Scale

Perhaps the hardest part of scaling any venture is picking the right time to put your foot on the accelerator. If you wait too long, you miss the opportunity and your investors, team, and maybe even you will lose energy and focus. But if you try to scale too early, you risk stretching your organization too far and experiencing burn out.

I have done it wrong both ways. As CEO of Zoona, I took too long to double down on our exponentially growing money transfer product in the early years, but then was too aggressive with market expansion in the later years before we had our core team, operations, and technology ready to go.

The trick, I have learned, is to really pay attention and listen to both the market and your team. If the market is pulling your product and growth is coming organically with strong customer retention metrics, that is the first and most important signal. If you then look across all of your business functions and feel you are executing at a 70% performance level or above, then you are good to go. Don’t wait to achieve perfection (you never will), but be wary of flicking on the growth switch if you have any major shortcomings in your foundations. And if you find these shortcomings, fix them fast!

Pick a Strategy and Execute Well

If it’s the right time to go for scale, the next question is how? Having the right scaling strategy is really important, and it’s generally easier and more effective to scale from your core (i.e. don’t try to scale something that is new to what is already working).

But I would argue that picking a single strategy and really nailing the execution is paramount. You will never know for certain if your strategy is right until you try, and the worst thing you can do is waste time and energy pulling in multiple directions. Have a robust strategy debate with your team and board to find focus and alignment, but then make sure everyone follows Jeff Bezos’ advice: “Disagree and commit.”

Once your strategy is set, it’s all about execution. Cadence is critical: Set quarterly Objectives and Key Results (OKRs) and cull any non-essential tasks that aren’t directly linked to achieving them, set up weekly dashboards to track leading indicators and key learnings, and establish performance management systems for your team. Also, make sure your best people are focused on your most important OKRs and help them by removing distractions and obstacles in their way.

Stay Close to Your Customers

In the scaling process, one challenge I faced as a leader at Zoona was drifting further away from our customers. When you are small, you are in front of customers all the time and this is critical to understanding and connecting with them. But later on, you may have two to three layers between you and your customers, and those layers may also want to execute without you being in their way.

The danger is that you spend more time in meetings watching powerpoint presentations than interacting with the customers who pay everyone’s salaries. You lose perspective and retain outdated assumptions. Your own energy may even wane, as your original source of purpose and inspiration may start to seem inaccessible.

I experienced this several times at Zoona. My favourite remedy was to break my routine and take a customer immersion trip. I cleared my calendar for five weeks and spent all my time in the field working for our agents and serving customers. Not only did I discover several product and operational bugs that were easily fixable, I gained a broader understanding of who our customers were and what Zoona meant to them. This, in turn, influenced my thinking on future strategy and enabled me to take new ideas back to my team to lead the company forward. It also set a new behaviour standard, and soon other leaders across our company were spending more time out in the field with customers, which led to many positive outcomes.

Don’t Run Out of Cash!

Lastly, scaling can be very expensive. You have already gone through an incredible struggle to get to this point and may have even raised a big investment round and have cash to spend. But you can burn through all of that cash surprisingly quickly and end up in a very difficult situation if you aren’t careful.

To navigate this challenge, it’s critical that you have the right people on your team and a culture that values your hard-earned money. Keep your fixed costs as low as possible and spend your money on acquiring and retaining customers. Establish processes and controls to create budget scarcity so that cash is not wasted on things that aren’t working, and empower your CFO to declare war against waste.

Also, watch out for copycat competitors with deep pockets and potential disruptions to your business model. It’s when you are scaling that competition suddenly takes notice and copies what you are doing. Don’t panic (you are probably better than you think) but don’t stand still (you won’t be better for long if you do).

And finally, don’t wait until you are out of cash to raise your next round of investment. You should start nine months ahead of when you need the money and always have a plan B in case you can’t get it. The best plan B is to get to cash flow positive so that your venture is sustainable and you have more options on where to take it next.

Good luck scaling your purpose-driven venture!

If you enjoyed this blog series and would like to learn more, I have written a book called Failing to Win on my ten year journey of being a purpose-driven fintech entrepreneur in Africa. I have launched a crowdfunding campaign for you to pre-order your copy to help me cover the upfront costs of getting the book ready for publication. Please click this link now, and help me spread the word!

Green book cover with bold back text 'Failing to Win, the remarkable true story of building on of Africa's first fintech start-ups'
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Lessons of the Refugee Crisis from Alexander Betts

Alexander Betts gave a guest lecture at the Saïd Business School entitled “Transforming a Broken Refugee System”. Audience member and Oxford MBA 2016-17 candidate, Sagar Doshi, shares the key takeaways from the talk.

When Professor Alexander Betts takes the stage at the grand Nelson Mandela Lecture Theatre at the Saïd Business School, he doesn’t waste time. He just smiles at the audience and lays out his argument. His first point is a shot across the bow to the mostly European audience before him.

“Europe is not the centre of the refugee crisis today,” he asserts.

What? Really? A casual consumer of recent news might find this suspect. But Betts backs up his statement. Yes, Europe has significant problems of migration, he says, but these are primarily political and social problems. The actual challenge of dealing with refugees in Europe, while difficult, is nowhere near as acute as elsewhere.

50% of the world’s refugees orginate from Syria, Afghanistan, and Sudan. Where do these refugees end up? Do they all end up in Germany and Sweden? No, Betts says. It is low – or middle-income countries that accept the majority of refugees. Turkey is – by far – the leader, followed by Pakistan, Lebanon, Iran, Ethiopia, and Jordan.

Map of asylum claims in Europe in 2015

Map of asylum claims in Europe in 2015

Imagine you’re a Syrian refugee, fleeing Homs or Damascus or some other place of conflict in the civil war. Generally speaking, you have three choices:

  1. First, you could bring your family to a refugee camp, expecting stigma and stagnation.
  2. Second, since you are likely an urbanite yourself, you could move to another city, facing limited rights to work and a potential life of destitution.
  3. Third, you could commit to a dangerous journey over Turkey or across the Aegean Sea into Europe.

For years, many refugees—especially from Syria—opted for the third choice. Unfortunately, this occurred just as Europe’s political situation became increasingly delicate. As nationalism and xenophobia increased among European populations, refugee policies followed suit.

Famously, Germany, took a different path. But the environment, even for Germany, was caustic. By the time Angela Merkel gave her “Wir Schaffen Das” speech, she had to make her bold stand in a very muted way: “Germany will manage,” she announced to her people and to the world. She hoped, of course, that other countries would follow suit.

They didn’t. “There was collective action failure,” notes Betts. The UK, Denmark, Austria, and Europe as a whole took pains to limit refugees, so much so that by 2016, Merkel had to make an about face. Betts reminds us that although the door to Europe hasn’t completely closed today, “it’s very difficult to cross Turkey without the right documentation.”

So far, Betts is sharing a known story. It’s a sad and unfortunate story, but it is known.

But then Betts reaches the predicate to his lecture: “We need moral clarity about who we protect and how” he says.  In other words, we need to understand what refugees really, actually need and provide that.

“I would argue that there is no moral right to migrate,” says Betts. “What’s needed isn’t migration per se, but rather a safe haven, where they can get access to their most fundamental rights.”

So what provides that safe haven, and what do refugees need? For Betts, those needs come in three categories:

  1. Rescue – safe havens in host states, basic assistance
  2. Autonomy – jobs, education, socio-economic freedoms
  3. A route out of limbo – reimagined resettlement policies, updated visa systems, spontaneous arrival as last resort

Consider where refugees get to live. Today, many refugee aid regimes conceive of refugees as living in camps. Camps can provide rescue—though those on the Turkish side of the Syrian border might contest even that point—but they typically do not offer refugees autonomy or a route out of limbo. It’s not surprising that today’s refugees often opt to avoid encampment.

Office of the United Nations High Commissioner for Refugees —the international organisation meant to focus directly on this population—is struggling to adapt to this new paradigm. UNHCR is not present in urban areas, even though that’s where many refugees are . Take Turkey, which is host to more refugees than any other country in the world. UNHCR supports only about 10% of refugees in Turkey. Why? Simply because UNHCR is set up to support camps, whereas most refugees in Turkey are in what Betts calls “urban or peri-urban areas.”

So what are we to do? What can governments and aid organisations change to make these situations better? For one thing, all our assumptions should be checked. For instance, many refugees aren’t necessarily looking for permanent resettlement. A large number of Syrian refugees, for example, have tried to return to areas of conflict when their home regions appeared to quiet down. Indeed, when Canand’s Justin Trudeau offered a hand of welcome to refugees in the Gulf, his government targeted those in Lebanon and Jordan. Refugees were contacted by phone and SMS to ask if they wanted to resettle to Canada. 70% of those contacted declined. They preferred to stay close to their region of origin.

The refugees of today’s conflicts are distinct from those of the past. There’s a political implication here. Today, most countries have complex and differing notions of what separates a refugee from a voluntary migrant. The 1951 Refugee Convention that gave UNHCR its mandate doesn’t provide all the answers to today’s challenges. This could be updated to reflect more modern realities of the refugee experience.

And clarifying that refugee experience is critical. Sitting with many of these refugees, Betts found that a very small number are unemployed. Many, in fact, are self-employed. They have built their own forms of autonomy and have contributed to their host country’s economy at the same time. Even governments who are wary of allowing rights to work for refugees en masse might see the benefit of taking advantage of a skilled, available population of idle workers.

Could host country governments “help refugees help themselves”? By making the refugee environment as human as possible, governments can think of refugees as a resource, rather than as a burden. If host country governments are going to organise camps for refugees, and if many refugees do live in those camps, then at least governments should provide some physical connection to the rest of society. Some properly human, interactive environment for a micro-economy to thrive. That means offering rights to work when possible, even if only on a limited basis.

This is a complex problem, and Betts doesn’t claim to offer any simple solutions. Nor is he blind to the lessons of modern geopolitics that underscore the fact that the refugee crisis and the west’s new nationalism are intertwined. But that doesn’t mean that progress isn’t possible. The 65 million forcibly displaced people—and our own consciences—demand it.

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Find out more about Alexander Betts’ research and other publications.

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