Why start-up chaos is good but has to be conquered fast to grow big
It’s easy to get addicted to the chaotic life of a start-up but, as these award-winning entrepreneurs attest, business success demands greater control…
Ask most new business owners what running a start-up is like and – privately at least – they’ll agree it can be nothing short of chaos.
The process of getting a new business idea off the ground – particularly if you’re trying to break into a new market – requires long hours, tight deadlines, and the focus of a passionate and committed team.
Juggling, getting your hands dirty, and becoming a Jack or Jill of many trades is par for the course.
But this chaos isn’t necessarily negative; it can help you achieve business milestones that initially seemed impossible, learn new skills, and bring you and your fellow co-founders and early employees closer together.
Chaos means walking a tight line between failure and success yet as James Davidson, the CEO and co-founder of tails.com, asserts it’s often “the most exciting time” of your business journey.
So, how is it possible to get beyond the chaos and turn a business into a well-oiled machine? And can you still keep hold of the “excitement” as your business scales? We posed these questions to a room full of successful UK business people – all winners at the Startups Awards 2016 – and they had some brilliant advice for their fellow start-ups.
Supported by Startups Awards sponsors The Start Up Loans Company and haysmacintyre, the conversation focused on how these incredible start-ups have made the transition to “controlled chaos” with more effective team, and time, management.
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Read on for the thoughts of our Startups Awards Winners’ Dinner attendees on why start-up chaos is good but has to be conquered fast to achieve scale…
Start-up founders should embrace chaos (but only initially)
James Davidson, tails.com:
“The best few weeks of my career, actually of my whole working life, were when things were all about to fail and we had to pull together effectively until things went good.
“I remember when we were working 13-hour days for a year. You share so many experiences with your team that you form a bond.
“At the time, it was enjoyable because our team had such a short-term clarity of purpose and there was camaraderie. It’s easier for everyone to focus on the same goal because they don’t want to necessarily have a goal that’s 10 years away so three months is achievable and all the team can work towards that.
“It’s like with anything – singing, rowing, marching – you fall into a rhythm and it just feels amazing because you’re in harmony.”
Steve Folwell, LOVESPACE:
“The test of being a scale-up is how many screw-ups and mistakes you make and we don’t make that many now. In a way, the excitement of having to deal with a crisis has gone
“I haven’t been in a LOVESPACE van this year, last year I was in the van for a few months, and that’s a KPI for me!
“We’re now in a different phase and we’re profitable at gross and operating levels so it’s all about scaling but that’s not easy. I think it’s tough in London particularly because there are a lot of sexy businesses all going after the same customer”
“We’ve got oodles of things we need to do this year but they’re not based on having to screw up and then having to fix it.”
Create processes of predictability
Steve Folwell, LOVESPACE:
“You’ll get past the chaos when you know there’s a rhythm and it works – when it becomes controlled chaos. There needs to be enough plates spinning that one will drop but never does because someone else steps up to the task.
“Now, all of our plates are spinning stably and I can see issues coming. For instance, at 4pm today, we’ll have done several hundred collections and might have two or three left. Last year, at 9pm at night, I’d have been on the phone dealing with problems.
“Today, running the business feels closer to my previous life of having been involved in C-suite and having to plan and think ahead.”
David English, The Start Up Loans Company:
“Every month we help hundreds of aspiring start-up business owners realise their ambitions. We’ve learnt that most expect too much of themselves.
“They want to get everything right and are extremely hard on themselves when they don’t. The early days of any start-up should be all about testing, learning, being flexible and evolving. Even the best laid business plans are likely to change within the first few months.
“Time and time again we see the sense of pride and satisfaction that comes when start-up owners overcome these obstacles and achieve goals that, at the very beginning, may seem out of reach.”
Conquering chaos has a lot to do with how you approach hiring and managing talent
Jonathan Lister, PensionBee:
“People are no longer joining the company out of a drive to prove the company won’t fail, it’s actually because they see the vision. They’re not saying: ‘I assume this is going to fail so I’m going to fix this for you.’
“Whereas when you hire somebody and there’s only four of you, it’s much more likely to be that vibe – like: ‘Am I going to do this? Uh, yeah I back myself to fix their problems.’
“I’ve worked at companies before PensionBee and felt the chaos of working all-nighters and I don’t think I’d wish it on anyone. PensionBee has been much better managed and I’m grateful for that.”
Guy Buckley-Sharp, ClearScore:
“The risk you run when scaling a business is that the early employees have a sense of ownership and it can be harder to convey that to new hires. There isn’t a doctorate [in what it should be like] if you’re joining a team of however many. The worry is, if you’re stressing about it, they’re not stressing about it.”
Steve Folwell, LOVESPACE:
“We’re trying to build LOVESPACE in perpetuity so we’re getting more expert people in now. You can’t hire people on a wing and a prayer, and you certainly can’t hire people working illogical hours and doing practically extraordinary things anymore.
“We had a guy working for us and, when City Link went bust, he drove a flatpack cardboard box of materials on Christmas Eve to Aberdeen; without us telling him to do that. We were all at a board meeting on Boxing Day thinking ‘we’re all very important’ and then we realised that the box had moved and it shouldn’t have moved because the logistics company had gone bust. Then we found out that this guy had taken it upon himself to drive from Maidenhead to Aberdeen at Christmas!
“That doesn’t happen now, we have really wonderful people but they want more than the excitement of just working mad hours. I respect them for that.”
You can still achieve the excitement of start-up chaos in a more controlled environment
Penny Roberts, Onfido:
“You can still get that start up buzz when you’re working on a new product launch or feature release because, it comes with that short-term need to go above and beyond.
“Good leaders inspire their teams to step up during such times and help create that ‘chaotic buzz’ for a common mission that we all love.”
James Davidson, tails.com:
“The trick is being able to turn it on and off when you need it. Now, we can have a situation where we think ‘Just because a person’s away why is it going to be a week until a new-feature launch? We don’t want to start creating a crisis out of nothing!’
“With tails, we’ve got to the size where we have processes that create predictability. I’ll come out of a meeting now and the office is empty and I’m still consciously having to say to myself ‘I should be happy that everyone’s gone home, they’re having a good work/life balance!’ But I still miss that feeling of no longer ‘being in the van’, as Steve alluded to.”
Ian Wallis, Startups.co.uk:
“Startups’ was acquired in February by MVF and we’ve experienced quite a different culture. There’s an annual trip to Ibiza – if targets are hit – which is based on the profits from the previous year. The target has been set for next year and it has been communicated we’ve got to hit these targets otherwise we won’t be able to go.
“The company has achieved a sense of building adrenaline and a start-up mentality of urgency, while growing to 350 people. It’s about providing the motivational stimulus and making everybody aware that ‘this is on you’ and every single person needs to pull out all the stops.”
Ultimately, good management and communication is key
Penny Roberts, Onfido:
“Going from a start-up where everybody is doing stuff to a scale-up where you need to manage people doing stuff is very different. You need good managers to run effective teams – and as we all know good management takes time.”
David Cox, haysmacintyre
“We’ve been growing and relatively quickly over the past three years, going from 200 to 250 people and our internal communication didn’t keep pace.
“To fix this we started a staff engagement project which included asking our people about what communication channels and topics they would find useful. The feedback and insights from the project have been invaluable and have helped us introduce new initiatives, bringing the partners and staff closer together.”
As the experiences of some of the UK’s most outstanding young businesses demonstrate, life in the fast-growth lane is very much like blasting away from the start line, contending with traffic at every corner, dealing with tricky chicanes at top speed, and being forced to take the odd pit-stop when things don’t quite go your way.
Eventually though, by learning and adapting fast over those early laps, it’s possible to achieve racing nirvana – clean air, the moment drivers find themselves on an empty track able to take advantage of all the aerodynamic modifications they’ve made.
Through adding the processes of a more mature business, it’s safe to say our Startups Awards winners are on the right track.