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The “10x” challenges we keep hearing from founders

Many founders are wrestling with the same scaling challenges – getting the org design right, hiring the right senior leaders, putting in the right systems and so on. If you’re a founder trying to find your recipe to scale, read this article to feel less lonely!

Over the past 10 months or so, we’ve had the privilege of engaging deeply with founders across the startup ecosystem in a variety of ways:

  • 55+ Vision Challenges – deep freewheeling conversations (most of them over breakfast at home) which start at the founder’s birth, the moment of insanity which led to starting a company and all the challenges and opportunities they are wrestling with
  • 16 companies in 10xAcademy across two batches – a structured programme with 8 founders covering 10 specific topics in depth
  • 70 founders on 10xConnect – enabling conversations between founders, since often inspiration can play a role that logic cannot
  • 10 “mini-engagements” – helping make deeper interventions in a few companies
  • 75+ expert-led roundtables – peer learning where a group of founders go deep on a specific topic with relevant experts

In the course of this journey, three things have stood out for us:

  1. The sheer breadth of problems being solved and the creativity being applied is amazing. From online education to gold loans to social commerce to used cars, every aspect of the economy is being approached with a disruptive line of attack – creating access where none exists, delivering reliability in low-trust environments and enabling livelihoods for hundreds of thousands of people without jobs. Pure inspiration!
  2. The rate of collective learning in the ecosystem is low. While many founders are wrestling with similar problems, the access to deep practitioner knowledge is very limited. Some of this is explained as the “newness” of problems startups are solving but a lot of repeating problems are needlessly being “solved again for the first time” – OKR implementation, Business Finance, Org Design & Engagement, Customer Experience, Brand Building, Data Science – common problems are being solved individually without the benefit of deep guidance from someone who’s been there before.
  3. A missed opportunity for investment is in Founders’ personal learning. If you grow, your org will grow with you!

The recurring themes…

This article is an attempt at a summary of the recurring questions we have heard, grouped in a few thematic areas. Since just a summary of issues can leave some readers feeling vaguely uneasy, we have also tried to capture a few ideas or “points to ponder” for each theme. And yes, some non-operating areas such as fundraising and managing the board are not covered here!

Strategy and business design

“So much is changing. I’m not sure of the goals for the next three months. How can I define a strategy for the next 1-2 years?”

Key questions
  • What’s my proposition to demand and my GTM machine as the platform scales beyond early adopters? Seen in CACs going up, conversion and repeats dropping as the business scales
  • How do I choose between growth via distribution (new markets) vs. penetration (in existing markets)?
  • Is going full-stack the only way to create quality and reliable supply at scale?
  • How do I keep an eye out for competition (without reliable market intelligence!), and how do I get the balance right between strategy and tactics?
  • What are the capabilities I need to build to make the core business defensible?
  • What is the right time to think about business opportunities beyond the core e.g., fintech, new categories, international?
  • How do I strike the right balance between unit economics/ profitability and growth?
Three ideas to consider
  1. Winners make Big Moves in a Big Market, invest proportionate to potential
  2. Creating proprietary assets/ capabilities (technology, brand, distribution) is key to defensible scale
  3. Sun Tzu: “Strategy without tactics is slow. Tactics without strategy is noise.”

Org design and leadership

“Our org is not keeping pace with our business. As founders, we are now becoming the bottleneck. How can we bring in the right team without diluting our DNA?”

Key questions:
  • How do I build an outstanding leadership team? What is the right mix between domain experience, first principles thinking and fit with our DNA?
  • What’s the right org design to deliver the company’s top priorities (for example, centre vs. city, GM vs. Functional roles, role of pods)?
  • How do we get the right balance between zero to one (new products) and scaling the core?
  • I like doing new things and solving problems, not running reviews! How do I evolve my role as the founder?
  • What’s the right org design for GTM (large enterprise vs. SMB – for B2B companies)?
Three ideas to consider
  1. Align the org design and leadership staffing to the org’s top priorities for the next 12 months. Org design in high-growth mode may have a shelf life of only 12 months.
  2. Choose the type of org design (GM vs. functional vs. pods) based on the nature of problems to be solved for the top priorities and the talent you have. Finding GMs is not easy, finding P&L capable city heads (at scale) is also not easy.
  3. Test the org design against your L0 to L3 metrics – are there clear owners for the activities that actually drive outcomes?

Installing a functional operating system to help run the company

“We have tried (more than once) to implement OKRs and failed – how do we translate our goals into outcomes in a reliable way? We always seem to overshoot or miss our AOP – how do we bring more rigour and predictability into our performance?”

Key questions:
  • Which are the key roles (e.g., Chief of Staff) and functions (e.g., CX, Biz Fin) I need for this?
  • We tried Objectives and Key Results (OKRs) twice and failed both times. Why?
  • If OKRs are more aspirational, how do we sync it with our Planning and AOP process which are commitments made to the board?
  • How do we solve for our customer leaky bucket – in some pockets we are losing customers faster than we’re acquiring new ones! How do we create a customer-first mindset in our operating teams?
  • We have tried hiring a few senior leaders with great experience but it hasn’t worked. What company systems (e.g., playbooks, ops design, biz fin) do we need to install that will help senior leaders to come in and be effective?
Three ideas to consider:
  • OKRs work best as a “3rd bus stop” (after strategic goals are clear and the right org design is in place). Otherwise they can add confusion. Business finance and “L0 to L3” metrics clarity can act as a force multiplier for effective OKR implementation.
  • If you want to double your capacity, hire a Chief of Staff; but it has to be someone who can match your wavelength and responsibly work with the org on your behalf
  • NPS measurement is most useful with clear input attribution (what really drives it) – owning this as a source of truth and driving accountability for it is a key role for the Customer Experience (CX) team

Founder’s personal growth and learning

“I have limited time to invest in myself – yet the company still depends on me to get to the next level. How can I be the CEO this company needs one year from now?”

Key questions:
  • How do I make an effective transition from founder (building something) to CEO (leading a company)?
  • How should I build the right team around me so I can keep doing what I do best and yet be a guardian of the company culture?
  • What rituals do we need to follow to maintain a strong relationship amongst founders?
  • How do I get (and give) honest feedback?
  • How should I manage my board?
Three ideas to consider:
  1. Take a design approach to evolve your own role as the company evolves
  2. Hire a high quality Chief of Staff to double your capacity and keep you honest
  3. Maintain a high external orientation; invest in your own learning (don’t leave it to chance!)

Sustaining “hyper-growth”

“We now seem to be hitting both demand and supply constraints in driving further growth. How do we break out of this? What kind of growth team/ function should I have?”

Key questions
  • When and how should I move from performance marketing to building a brand and advertising?
  • How do I solve for supply availability and capacity for 10x scale without creating huge costs?
  • How do I balance scaling the core with cracking blue ocean/ breakthrough opportunities?
  • How do I create the right level of micro-market intelligence on which my expansion team can take decisions?
  • What’s the right time to create a dedicated growth team and what should they do that sales/ product/ business/ ops teams are not already doing?
  • What’s the right design for a sales ops machine and how should I differentiate between large and small enterprises (B2B)?
Three ideas to consider:
  1. Deeply understand the customer funnel and how the shape is changing with scale
  2. Invest early in an A/B platform and high velocity experimentation
  3. Plan early for the big levers (international expansion, new adjacencies) to start delivering growth when core starts saturating

Leveraging technology for scale and competitive advantage

“We have a lot of data but we don’t think we are using it well at all. We have grown our tech team. How can I ensure we leverage it to scale rapidly?”

Key questions:
  • How do I ensure my product, tech and data teams are translating top goals of business strategy into execution?
  • How do I organise my product, tech and data teams to achieve maximum velocity in execution?
  • How can we leverage tech and data to get a very deep understanding of our customers?
  • How to maintain balance between long term capability building vs short term business growth priorities?
  • When is the right time to invest in fundamentals like a Tech blueprint, A/B platform, Data platform, ML platform etc?
  • How do I reach a state where I get quick answers to questions on behaviour of business metrics?
Three ideas to consider:
  1. Use the 5 day sprint process to stress test product design (from idea to prototyping and user testing) and the drivetrain process to ensure a thought-through approach to data
  2. Balance growth hacks with agile pods with capability building driven by architects; use an A/B testing platform for high velocity experimentation
  3. Future-proof your product through a well thought-out blueprint

Ops design to ensure much higher leverage with scale

“The physical side of our business needs lots of people and it has become very complex to manage this across so many cities – how do we ensure we don’t scale people linearly with sales?”

Key questions:
  • Our monthly attrition is >10%. How do we hire and retain the right ops profiles?
  • We seem to be very inconsistent in our operating performance. How do I create an efficient setup that consistently delivers on key operating metrics?
  • What are the capabilities and right org structure (central or regional) needed to go from 5 to 50 cities? What are the best practices that I can follow as we plan to expand our footprint over the next few years?
  • How can we set up operations to continuously improve in terms of service quality, cost efficiency and experience as we keep scaling rapidly?
  • What is more important for an ops leader – big company experience or first-principles thinking – how do we get this balance right?
Three ideas to consider:
  1. Create a strong design team to cover all aspects of operations: hiring, training, process design, customer experience, cost efficiency and scalability
  2. Build the right teams around operations i.e. Planning, Business Finance, Control Tower, Expansion, Product with the right interaction mechanisms (e.g., pods)
  3. Build strong governance mechanisms to run operations to a high degree of precision: well designed real-time dashboards, daily calls, weekly huddles and monthly reviews

People Excellence & Culture

“I know culture is important but I need help with managing this in a systematic way. What’s the best place to start?”

Key questions:
  • How do I build and sustain a healthy culture? How do I drive the right set of behaviours across the organization?
  • My org has grown rapidly over the last 6 months! What is the pulse on the floor?Are my teams/managers engaged and working effectively?
  • I want to attract and hire the right set of talent for my business needs. Where do I find them and how do I get them onboard fast enough?
  • How do I assess the performance of my employees? How do I grow my high potential employees into leadership roles and let go of those who are not able to deliver/ align to the org?
  • How do I share ownership, reward & recognize my employees?
Three ideas to consider:
  1. Build your company “manifesto” – articulate and communicate the core values and ways of working that has got you so far
  2. Practices build behavior into culture: Design people practices such as Performance Management, Hiring and Rewards in deep alignment with your manifesto. Don’t copy/ paste from other companies!
  3. Over-invest in org engagement (stories, all hands with AMA, monthly bulletins, OKR updates) – winning the war for talent is as important as fund-raising

What’s your score?

Are some of these questions applicable in your context? If yes, you’re in good company. And chances are you can find someone who has solved it in a way that is helpful for you. Happy hunting!

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Tags: , , Last modified: September 10, 2020