Having reflected on much of the commentary from last week’s Bdaily Scaleup Awareness week, we have a somewhat different perspective to that of the ‘black swan theory‘ whereby startup and scale-up businesses experience a growth explosion around external factors and events.
Having worked with a number of scale-up's over the years we believe there are many reasons why some companies are able to achieve scale whilst others operating with a similar solution in the same industry don’t. We believe there is something all successful businesses have in common that wasn’t specifically called out in last weeks coverage.
Consider the following examples:
Created as recently as 2015, Revolut, now worth £1.3bn, rose to fame on the simple idea of international fee free money transfers. International money transfers were already very well established, but they disrupted a traditional market by removing fees and making the process easier and much more customer friendly in the process.
In a similar way Sagepay, recently sold for £232m, was acquired from Protx in 2006. Protx was as rapid growth credit card payment gateway and again credit card payment gateways weren’t a new concept. However, through API’s they made card payment services easily accessible to the developers of web shopping carts and payment services. At the same time introducing a simple monthly eat as much as you like subscription charging model as opposed to the then more complex transactional charging models.
Closer to home, a number of successful scale up retailers such as End Clothing, Pink Boutique, and Start Fitness identified gaps in traditional markets that weren’t well served and built their business model and brand around specific customer segments and propositions.
We also have companies like Zerolight, who started out as a games business before successfully pivoting their innovative ideas, assets and skillset to take advantage of a gap in the automotive market, if not indeed having played a role in co-creating a new market.
Then of course there is Sage Group, their story of scale is legend. However, their success wasn’t just about having a winning product at the right time, and they weren’t first to market as Pegasus was the incumbent back in the day. They were blessed with great leadership including Graham Wylie and an inspirational marketing genius by the name of David Goldman. With David’s help Sage built a strong brand and emotional connection not just with customers but with industry advocates, the rest is history.
It‘s not easy to attribute the success of these businesses to any specific black swan event. However, it is easy to attribute their success to strong leadership. Of course it’s widely acknowledged that in order to scale you need access to markets, access to finance and access to skills. Looking back at these examples, and leaving finance to one side, they were all able to spot market opportunity and they were innovative in creating solutions that addressed customer problems and moreover could be commercialised.
However, the common element is that most of all they have access not just to skills but to talented individuals. They are led, or have been led, by highly talented individuals who possess the ambition, winning mindset, and belief to continually innovate, experiment and ultimately succeed. What’s more they are also very good at developing other talented people who can think and act in the same way.
If a business is looking to scale it needs talented individuals with relevant expertise, and if they don’t have this they need to develop it, hire it, or buy it!