Insights into scaling up your business

• The right people with the right understanding is key
• Think big but think small as well

SCALABILITY is essential for a startup’s sustainability but not every business succeeds in this growth. One of the most important factors for a business’ growth potential, if not the most important thing is the people and culture of the company.

According to Azran Osman-Rani, iflix Malaysia’s CEO, businesses should put the same intensity and focus into recruiting as they do on marketing to achieve scale successfully.

Azran was speaking as part of a panel during the global summit GECommunity 2016 organised by the Malaysian Global Innovation & Creativity Centre (MaGIC).

The panel, which discussed the topic Secrets to Scale – Learn from the Experts, also comprised Grab Malaysia country head Jaygan Fu and KFit founder Joel Neoh and was moderated by Leaderpreneur co-founder and managing director Jessica Macias.

Hire right and ahead of the curve

Hiring is expensive – Azran likened it to large-scale capital expenditure – but essential. “When you have the right market fit and the money to expand, the first thing you need to do is make sure you have the ability to execute the plans you have laid out, which means getting the people in place.

“It is daunting to hire ahead of the revenue curve but if you don’t, you will always be playing catch-up and will fall into a vicious cycle where you never get to realise those opportunities.”

Azran opined that no shortcuts should be taken when it comes to hiring the right people for the business – which means people with the right talent for the job and right fit for the culture. “For every one person who comes in, you will have to look at literally 50 to 100 profiles. You have to put in that time, energy and effort.”

He also said that it is useful to explicitly define the culture and values of the business, and the type of people, personalities and teams that the business needs for its growth; this is something iflix did at the very beginning.

Once a startup has a large pool of people, the company should be systematic in how it evaluates and assesses them. There also must be an efficient assimilation process.

“People get very excited about joining startups because of the dynamism, flexibility and opportunity to do many things. But what often happens is they get overwhelmed and paralysed. There are so many things moving too fast for them,” he explained.

The solution to this is to explicitly define their work goals in the first month of their job so that they have a structure to work within. “This rapid feedback cycle is very important. You’ve spent so much time and effort bringing them in, if you don’t integrate them well in the beginning, you will see a lot of attrition in three months,” he said.

Understand to disrupt

One of the biggest challenges entrepreneurs face is figuring out when and how to take their business to the next level. Macias put forth that a leading cause of death for startups is premature scaling.

To the question of when the right time to scale is and how to identify it, Neoh said that it really depends on the company as every business and entrepreneur is different. “Don’t be afraid of failure – you don’t know what will work until you try it - but sticking with failure too long will mean death. Rapid trial and error is the best way when you are trailblazing to figure out what works and what doesn’t,” he advised.

Fu added that it is crucial that once a business finds something that works, it does not rest on its laurels but instead keeps working to disrupt itself. He said that for many startups, frustration with the status quo leads to an idea that disrupts the market – just as it did with Grab – but once the problem is solved, the entrepreneur should not think that there is nothing else to do.

Azran pointed out that one way to disrupt yourself or further disrupt the market and contribute to the business’ growth is to understand the needs of the different demographics of customer. “Just because there is one segment that is being adequately served and incumbent, it does not mean that this service works for everyone.

“Understand the different segments of the market, their frustrations and what they want, then come up with something tailored just for them,” he said.

Find your focus

With so many opportunities waiting to be identified, entrepreneurs often find it difficult not get distracted from their original path or to pick one thing for the business to focus on while scaling.

Neoh likens identifying the right focus for a business to finding the right fit in a romantic relationship: qualitatively, you go on dates with lots of people but one day you may suddenly identify one person as the one for you. If you really think about it, you feel this way because of certain quantifiable factors.

“A business model is similar – you may try a lot of ideas and land on one that you feel works. Sometimes it’s just gut feel. The quantitative factors are unit economics, customer acquisition costs and so on,” he said. 

Neoh emphasised that, when pivoting on the path to scaling up, companies should find a business model that plays to their strengths, whether it be market traction, a highly skilled team or something else.

He also said that while trying out different things, failing fast and learning from the failure as well as communication are crucial so that the company as a whole knows what it should and should not do. Using KFit as an example, he said that though what the company is doing may seem unclear from the outside – it is currently in the midst of a pivot – internally, the team knows where the business is going.

Be resolute in the face of change

Mini innovations are valuable in taking a business to the next level. Fu said that in this case, companies would do well to look at what they have on hand; a simple idea can have immense results. With Grab it was technology and local knowledge: “We realised that Malaysians tend to like to pay up-front, hence the fixed-fair value proposition we came up with.”

The path to scaling up, however, is rarely smooth. Azran advised startups not to worry about things beyond their control because they are impacting everyone, including competitors. “As long as you figure out how to deal with these situations better than your competitors, you will always come out ahead,” he said.

Neoh, quoting Oprah Winfrey, advised entrepreneurs to be comfortable in uncertainty. “When you are comfortable with all the changes your startup goes through, whether you are the founder or an employee, that’s the best way to learn.”

Azran drew from his Ironman experience to advise entrepreneurs not to give up. “Just when you think you’ve given it your all and your body says it’s time to quit, you have only reached 40% capacity. Oftentimes our mind gives up much faster in terms of the will to carry on versus your physical ability to keep going on,” he said.

“Even in the darkest of times, it’s not game over, it’s possibly where it starts. There is always a next step.”

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