How to build 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 second article in the series, how to ‘build’.
In my last blog, I outline a three part strategy to starting a purpose driven venture:
- Start by falling in love with a big problem
- Pick the right co-founder(s)
- Rapid prototype to discover product market fit
If you get that far, you are well on your way and should be able to raise investment. The art of fundraising is a topic on its own that has been extensively covered, including this excellent piece by Y-Combinator’s co-founder Paul Graham. In this article, I’m going to assume you have some capital and now it’s time to build. Specifically, there are three critical foundations you will need to put in place in advance of scaling your venture (which will be the third part of this series).
Build a model
I used to falsely believe that innovating means everything needs to be new and unique. A more mature approach is to first research what other models are out there that you can learn from. As John Mullins and Randy Komisar wisely advise in Getting to Plan B, start by finding successful analog models that you can emulate, and figure out how to copy and adapt them to your market. When launching Zoona, we studied M-Pesa’s agent and money transfer model in Kenya and figured out how to adapt it to Zambia where it didn’t exist. It’s a lot easier to build off of someone else’s successful innovation than to start from scratch.
Conversely, it is also useful to identify antilog models that are past their prime and explicitly define what you want to do the opposite of. In Zoona’s case, this was deploying entrepreneur owned and managed kiosks instead of branches as the banks and the post office were doing.
You will also need to figure out your growth levers, how you make money, and establish metrics and feedback mechanisms to track if your model is working. The faster you can learn and adapt, the greater the probability of success.
Build a team
Your ability to build a motivated, aligned and high-performing team will make or break your venture. This is one of the most important jobs of an entrepreneur and ironically one of the easiest to screw up. When there is so much work to do, it is extremely tempting to hire the first person who walks in the door and leave her alone to sink or swim. I have learned that it’s much more effective to be purposeful and systematic every step of the way. Here is a checklist I use when building a team:
- Do you really know what roles you need, and have you defined them as clearly as you can?
- What roles can you outsource or make part-time to avoid taking on too much fixed cost?
- Have you defined what values, abilities, and skills (in that order of importance) are required for each role?
- Do you have a clearly defined Employee Value Proposition to attract the right people? (i.e. Why would anyone want to work for you?)
- Do you know where to find potential candidates? (The good ones most likely already have jobs).
- Have you looked within your organization?
- Do you have a non-biased process to assess candidates?
- Have you thoroughly checked their references to identify red flags and validate their track records?
- Can you “try before you buy” by starting new hires off as consultants?
- Have you defined clear 30/60/90/180/365 day objectives and key results that will determine if the new hire is performing?
- Do you have a process to give and receive regular and honest feedback? Do you have a simple and effective performance management system?
- Do you have a process to identify exit the wrong people?
The last point on identifying and exiting the wrong people is as important as hiring the right ones. A mentor once told me that the best recruitment firms in the world will only get it right 75% of the time, but the best companies in the world are those that efficiently deal with the other 25%. If you want to build a great team, learn how to compassionately offboard people who stand in the way of that goal.
Build a culture
With the right people in the right roles, amazing things are possible. But for anything to be achieved, those people also need to exhibit the right behaviors, which is where your culture comes in. As with all my advice, the starting point is to be purposeful about designing what culture you want and then taking steps to shape that. If you don’t do this purposefully, a culture will emerge anyway, and it may not be one that is productive or that you want.
- Have you defined your purpose, values and principles?
- Do you live your purpose, values and principles?
- Do you reflect and learn from failure?
- Do you celebrate your successes and acknowledge achievements?
- Do you care about your people and their well-being?
The golden rule for building an effective culture is “do what I do, not what I say.” As a leader, everyone will watch how you behave for signals on how they should behave. As Ben Horowitz rightly titled his latest book about creating culture, “What You Do Is Who You Are.” With any purpose-driven venture, time and energy spent designing and improving your model, team and culture will be time well-spent. It will pay off in multiples when you enter the next phase: scaling.