{"id":7576,"date":"2017-11-22T11:00:53","date_gmt":"2017-11-22T10:00:53","guid":{"rendered":"http:\/\/www.ie.edu\/exponential-learning\/blog\/?p=7576"},"modified":"2018-11-06T14:43:13","modified_gmt":"2018-11-06T13:43:13","slug":"nuggets-from-joe","status":"publish","type":"post","link":"https:\/\/www.ie.edu\/lifelong-learning\/blog\/business\/nuggets-from-joe\/","title":{"rendered":"Nuggets from Joe"},"content":{"rendered":"

We\u2019ve prefaced that\u00a0Scaleup: How to successfully manage growth<\/strong><\/a>\u00a0teaches you 20% of what you need to know as an entrepreneur primed for scaling up, while the other 80% each entrepreneur has to find for his or herself. Long after the end of the HiOP, you might find yourself wondering, what words of wisdom should I keep in mind as I pursue my expansion model?<\/strong>\u00a0Don’t fret; we\u2019ve combed through some of Professor Joe Haslam’s most significant findings and are going to break them down.<\/p>\n

Get help<\/h4>\n

This is Joe\u2019s number one piece of advice for entrepreneurs. Founders must understand that the likelihood of success is low, and unless the venture has something special<\/b><\/a>, then the most probable outcome will be a failure<\/strong>. Haslam notes that<\/b><\/a> \u201c[m]any founders I talk to don\u2019t really know the game that they are in until it\u2019s too late;\u00a0like a Sherlock Holmes not knowing his adversary is Prof Moriarty.\u201d While Haslam started his first business in the late 1990’s when there was a lot less information available on the internet than now, entrepreneurs now have so much more information online that they should take advantage of it<\/strong>. Despite that, he remarked that he<\/b><\/a> \u201c\u2026still meet[s] founders who don\u2019t believe they have anything to learn from reading the core entrepreneurship texts, taking courses or watching online talks.\u201d This HiOP is the help that you as an entrepreneur can get to help improve your chances of success with the right preparation<\/strong>.<\/p>\n

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Get your culture right<\/h4>\n

The final module of the HiOP takes a deep dive into why company culture is essential. There’s a reason why the renowned Harvard professor Peter Drucker stated<\/b><\/a> \u201cculture eats strategy for breakfast,\u201d and as Haslam points out<\/b><\/a>, \u201c\u2026it is the thing you absolutely have got to get right.\u201d Not only are the early hires you make so critical, but you must continue to retain the right talent<\/b><\/a> at every stage of your company’s growth cycle. When good people leave a company, then you can tell, as Haslam mentioned<\/b><\/a>, things are not going well. No wonder why Uber\u2019s<\/a> employee attrition rate was so high in the midst of its crises during the first half of 2017<\/strong>. As Joe remarked, \u201c[t]heir culture doesn\u2019t scale.\u201d<\/p>\n

“I don’t believe in founders, I believe in founding teams.”<\/h4>\n

Why is that<\/b><\/a>? \u201cIf you can\u2019t get at least one other person with you and are not prepared to credit them as a founder, then that\u2019s a red flag. I\u2019m a great believer also that you need to have XX chromosomes as well as XY chromosomes. It still shocks me when I see a founding team of four guys.\u201d<\/p>\n

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The winning team of founders?<\/i><\/p>\n

Joe\u2019s ideal team of founders is a three-person group fitting the following archetypes<\/b><\/a>:<\/p>\n

a Qual, a Quant and a Sicario (the Mexican Spanish word for a \u2018hitman\u2019). The Qual, or Qualitative, is the face of the company who gets out there and meets customers, investors and the press. The Quant, or Quantitative, spends all day on Excel, manages the cash flow and knows at any time whether the company is winning or losing. The Sicario fixes problems (of which you can expect many).<\/p><\/blockquote>\n

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Always try<\/h4>\n

Not trying: this is what Haslam notes to be the most significant mistake<\/b><\/a> that entrepreneurs make. A \u201cfailure is not an option\u201d mindset<\/b><\/a> is key. There is some hope, but it does take away a large portion of would-be entrepreneurs<\/b><\/a>: \u201cSome founders learn this in their first start-up and go on to do better the next time, but others continue to lack the courage to really have a real go.\u201d<\/p>\n

Timing is everything<\/h4>\n

Premature scaling<\/b> is another one of those significant mistakes; that’s why in the HiOP Joe places such high importance<\/b><\/a> on not adding sales and marketing until after you have worked out the product\/market fit. \u00a0What happens<\/b><\/a> when you do not wait? \u201cNothing kills a bad product like good marketing. In other words, if you have a terrible product and you set people up for huge expectations and then you don\u2019t deliver, they generally don\u2019t give you a second chance.\u201d<\/p>\n

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Product\/market fit is everything<\/h4>\n

Not only is premature scaling the outcome when you add the sales and marketing mechanism without working out the details of product\/market fit, but product\/market fit also plays a prominent role all throughout the scaling process<\/strong>. According to Joe, \u201c[a]s you scale, you have to keep the product\/market fit, always.\u201d<\/p>\n

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You need operations<\/h4>\n

While in the startup stage, there’s a focus on demand, when it comes to operations, one has to get thinking about the<\/strong> supply-side<\/b><\/a>. As for an example of how to think about operations<\/b><\/a>, \u201c\u00a0[t]he classic engineering way of thinking about problems is the magic triangle of good, quick and cheap. I can give you any two, but I can\u2019t give you all three. The modern operations thinking is much more that I can give you all three, and Amazon is a huge example of that.\u201d In the case of Uber, they don\u2019t have a COO<\/b><\/a>, \u201cwhich is another raging red flag.\u201d<\/p>\n

There\u2019s more than one type of scaling<\/h4>\n

To make the distinction between two primary types of scaling, we can frame it based on the areas they are the most prominent: Silicon Valley and China<\/strong>. The Silicon Valley scaling, consisting of a hyper-focus on growth and taking in venture capital is blitzscaling<\/b>. Haslam summarizes blitzscaling like this<\/b><\/a>: \u201cload up on VC, as long as we have the engagement, go public as quickly as you can and then incentivize your employees with share options\u2026\u201d<\/p>\n

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By contrast, in China, scaling works differently<\/strong>. For that, we look to the term hyperscaling<\/b>. Haslam summarizes it in this way<\/b><\/a>: \u201c[t]he way the Chinese people are organized, a lot of people are living away from their villages and they can get hooked on something really, really quickly. Xiaomi would be an example of a Hyperscaling company.\u201d<\/p>\n

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As for everyone else? Everybody else outside China and Silicon Valley<\/b><\/a> \u201c(moves) slowly and profitably rather than a dash for growth. Profit is still attached to a lot of the rest of the world.\u201d<\/p>\n

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Need more nuggets?<\/h4>\n

We highly recommend you take a listen to this Podcast from Intercom where Joe sits down with its Director of Content, John Adams:<\/p>\n

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