For modern entrepreneurs in today’s ever-changing market environment, it has never been more vital to understand the difference between a startup and a scaleup business. The core challenge is being able to decipher when you’re best positioned to begin transferring from the previous to the latter, and how to successfully cross Geoffrey Moore’s chasm from the early adopters – your most ardent fans – to the early majority segment of the market.
As Steve Blank, founder of the Lean Startup movement, puts it, “Essentially, a startup is a science experiment.” In the earliest stage of any business, the game is testing whether your company meets a market need, and if that need is both sustainable and profitable. “A startup is a temporary organization designed to search for a repeatable and scalable business model.” states Steve, adding, “in a startup, no facts exist inside the building, only opinions.”
Once proven, your business is now ready to move into the scalability phase, turning your attention predominantly to growth capital and profit strategy.
Recognising when your business is ready to scale, and having the insight to successfully launch the transition, is no easy feat. One entrepreneur who seems to be mastering scalability for the digital age is Jason English. The 42-year-old has a reputation for taking companies from humble beginnings and launching them into global market players.
During his time as the CEO of Prommac, a South African company in the oil and gas sector, English and his team were able to acquire the business, transitioning from a small market player to market leader and turning over a yearly revenue of over R500 million (USD 33 million) within a few short years. Today, as the Chief Ecosystem Officer of CG Tech, an investment holding company with a diversified portfolio across oil and gas, events, film studios, construction and virtual technologies, English continues to recognise market trends and pushes his teams to infiltrate established industries with disruptive new technologies.
In a recent survey by Upwork, it was found that an estimated 36.2 million Americans will be working remotely by 2025, an 87% increase from pre-2020. Last year, The Virtulab, a CG Tech subsidiary, launched their own software platform, Virtuworx, featuring digital-rich environments that are custom built and allow users to meet up to plan, train, work and learn remotely. Tapping into an emerging need in the market is a skill that English and the team have in spades. We recently caught up with English for a chat on scaling businesses.
I’m a helicopter pilot, so everything in my mind is a checklist.
First, you need to establish that the experiment phase of your business is complete. This means you have clearly identified your place in the market and are confident your business strategy is ready to handle the growth phase.
Second, with your target market in place, you should have secure funding, confident that you’ll be able to secure the right people, materials and equipment to support your growth.
Third, and something I really believe in strongly, is having a clear vision of your company’s culture. As your team grows, it’s vital they understand your purpose and are able to work effectively within your organisation’s hierarchy.
Fourth, recognise the necessary tools that will help you grow. Re-evaluate the software and systems you are currently using but don’t get bogged down by every new piece of tech advertising that lands in your inbox. Concentrate on the tools that will help you manage your weak spots and keep track of your progress.
And finally, in order to optimise your team’s ratio of time spent versus value created, automate anything repetitive. This can be from accounting to onboarding new team members. Recognise repetitive tasks and put systems in place to handle them rapidly, efficiently and effectively.
The price of not being prepared is definitely something we’ve looked to tackle within our own group. By instigating an approach of active preparedness, led by our chairman Niall Carroll, CG Tech has sought to instil an integrated readiness for any disruptive events in our day-to-day processes. It’s definitely not an easy approach to implement, but by taking the time to ensure your existing strategies are assessed, aligned and agile, you are then able to adjust quickly in times of disruption.
It’s like building a strong foundation of a house, if you get that right, you can then safely extend in multiple directions but if the foundations are weak, it doesn’t matter how beautiful the roof and walls look, it will crumble in the first storm. In terms of CG Tech, our board of directors is made up of owner-operators of our subsidiary businesses. This automatically creates an environment of transparency and openness that allows each company to align their interests and visions to the others. While oftentimes the cultures are different, synergies are quickly recognised, information is shared and they are more likely to work together to solve an emerging challenge.
As I mentioned before, I strongly believe in instilling a solid company culture. I refer to this as The Oros Effect, a leader’s ability to successfully transfer their ideas, knowledge and beliefs system into those around them. I’m so passionate about this idea, I’m actually in the process of writing a book about it, but that’s a story for another day! (Laughs)
Really, what’s most important to recognise is the need for a diverse team. A well-rounded unit of individuals that each brings an essential piece to your business strategy. A common framework to follow here is the 6S model, where you have your Stars, the high achievers who naturally step into lead roles and provide a good example to follow; your Sherpas, who basically keep your operation moving smoothly by bringing solid consistency to your team; your Strategists, the visionaries who shape long-term goals and work diligently to achieve them; your Specialists, who know the ins and outs of your market and are really useful during difficult times, especially when problems need to be solved, and lastly; your Supporters, the individuals who help in bringing the entire team together and offer assistance to ensure collective goals are met; and finally, your SWAT team, those individuals that jump in and do whatever it takes to get a task completed.
You might not always have employees that fit into each of these categories, but you should always be looking to build teams that represent the essence of each. If you can do this, while also instilling a solid company culture, productivity, growth and success are pretty much guaranteed.
I’ll give you two.
We touched on the first one earlier – automate wherever you can. As your team begins to grow exponentially, you won’t want them getting stuck on repetitive tasks. This goes a long way in saving you time and will be more cost-effective in the long run.
Secondly, pare down the number of things to track. Remember that the key isn’t to track everything, it is to track a combination of a handful of metrics which act as red flags. This will allow you to stay focused and not get overwhelmed.
I don’t like giving advice but share what I’ve experienced in life, which is to worry about the things you can control, and not worry about those things you can’t control, regardless of the given climate. New markets create new opportunities, and we are seeing an incredible amount of change happening right now. It’s all about identifying market trends and where your business can be most effective. The Virtulab team is a great example of this. Last year they were able to recognise that an in-house productivity solution we were already using across our group had the potential to solve an emerging global challenge – remote work. By quickly changing gears, they were able to roll out the Virtuworx platform in record time, offering customers the ability to engage with the physical world, virtually.
I would also say, don’t be afraid to take chances. Digital is the weapon that allows the Davids to beat the Goliaths of the world. And remember, scaling isn’t just about traditional growth. It is more about redefining the rules of the playing field by introducing new technologies that allow outsized scale, better customer experience, and ultimately, higher profits.
The collection of business within the CG Tech group allows us to share learnings and ideas with each other, sparking collective investments into research and development of new products and services which would not normally have been created.
The technology arm of the CG Tech group, The Virtulab, has allowed me to grow the reputation of Prommac as a digital business in a traditional industry, and we have been able to transform at a fraction of the cost of outsourcing these services.
As the youngest leader in the group, the collective knowledge of leadership has helped me grow personally by engaging with great business leaders who have been there, done that and have shared their experiences with me.
The CG Tech team has helped us raise capital and fund growth using the know how and experience of the collective group. The spread of skill sets between Accountants, M&A Experts, Operational Specialists, Metallurgy Specialists has helped me shape my business for the future.