Millionaire founders reveal 8 ways to be awesome fast-growth CEOs
Our illustrious Young Guns, including the founders of Ten Group, Blinkx, G2 and Fresh Group, share their invaluable tips on growing a business
It isn’t easy to start a business. But it’s arguably even harder to turn a start-up into a sustainable, scalable firm dealing with the challenges – both exciting and mundane – of fast growth and expansion. Young people often go into business to bring a fantastic idea to life.
They thrive off the buzz of living on the edge between runaway success and crashing and burning. They can pitch with all the enthusiasm and passion in the world. They work tirelessly to create their product, and eulogise to great effect to press, investors and potential customers.
But entrepreneurs have to be honest with themselves about their ability and willingness to stay the course once their business has gained some traction and the initial start-up buzz dissipates.
Young people can make excellent CEOs of established companies – but how?
Find and hire advisers and mentors with more experience than you
As with starting a business, growing one requires advice – and lots of it. Some fortunate entrepreneurs have been able to call on the expertise of industry veterans who have joined the board as investors. Brent Hoberman, co-founder of Lastminute.com, joined the board of WAYN, for example, after investing in the business founded by 2007 Young Gun Jerome Touze and partner Peter Ward.
Such advice is particularly critical for young people, who are more likely to lack in-depth business experience. Suranga Chandratillake, founder of Blinkx, explains: “There are two aspects of being a good CEO: domain knowledge and experience. I had a lot of domain knowledge [but] I had no management experience, or any experience in raising capital.”
His way of dealing with this was to find others with the experience he lacked. “I supplemented that with the right mentors,” he says. “The board really helped me, people who weren’t involved in the company day to day. You need to surround yourself with the right advisers, not necessarily someone in the company – because they are too caught up in it – but someone who cares about you and who isn’t too blinkered by what’s going on.”
Capitalise on a market opportunity
Blinkx is one of a number of Young Guns’ businesses that were one of the very first players in their market: Monitise, Maximuscle and Notonthehighstreet.com also led the pack from the start. Blinkx’s single-minded focus on innovating has certainly been a hugely significant factor in its continued rise. “In our industry you simply can’t stand still,” says Chandratillake. “No matter how successful you are today, you have to be thinking of tomorrow and the next day. Even companies as large and as profitable as Google have to do the same.”
Never become complacent
Complacency is surely the enemy of start-up success – and the journeys of so many Young Guns pay testament to the importance of a continual striving for the new and the improved. Innovative is a word that many associate with cutting-edge digital and tech start-ups, but it is important for all businesses: from retailers to accountancy firms.
Jamie Waller credits much of the success of his bailiff firm JBW, which has displayed year-on-year growth of around 20% and has achieved a turnover of £16m, to its constant innovation. “We have been the only company in our sector to deliver new products and services consistently since formation,” he says, proving that a company doesn’t need to be a Silicon Roundabout tech start-up to be an innovator. “We invest in research and development all of the time and have people dedicated to this.”
Frequently, innovation can manifest itself in the simplest of ways. World First, for example, the business of 2007 Young Gun Nick Robinson, has carved a niche for itself among legions of foreign exchange companies simply by being committed to making the customer experience as pleasant as possible – a priority the sector is not known for.
Thea Green has kept her Nails Inc products on-trend and original by creating new nail varnish effects: her customers’ nails can show off a leather look, 3D effects or nail jewellery, for example.
Even sectors as traditional as confectionery can be shaken up with something completely new: 2012 Young Gun Dan Shrimpton and co-founder Mike Stevens created a range of mints, gum and sweets that are different because they are made from natural ingredients and are the healthiest option on the market. Simply put, whether they innovate with their product offering, or in the way they operate, successful businesses set themselves apart from the competition.
Be wary of ‘too much, too soon’
To be running an established business displaying impressively fast growth is many entrepreneurs’ dream. But it’s a risky business. ‘Too much, too soon’ has been the downfall of many a small firm, with the danger of losing track of the bottom line ever present. Expenses can quickly spiral out of control – whether they are due to aggressive hiring, expansion into new markets, diversification into new product lines or new services, acquisitions or countless other drains on capital.
Equally, expanding before a business’s model has been rigorously tested, or into markets of which the management hasn’t sufficient knowledge, or diversifying into an area the business does not excel in, can also spell disaster.
Many Young Guns show how to accept large injections of external capital and ensure that the business doesn’t get blown off course. Others demonstrate that growing organically, through revenues, can still be a path to impressive growth rates. One such is James Gorfin, co-founder of recruitment firm G2, who says his business could feasibly open new offices in multiple different territories around the world.
But the company will only open a new office when there’s a member of staff who has worked his or her way up through the ranks and has proved capable of taking on the responsibility of managing their own office. Ten Group, founded by 2009 Young Gun Andrew Long, has expanded internationally, but will only enter a new territory once it has won a contract there, thereby minimising the risks posed by the expensive launch process. Many other firms in the preceding chapters, though no longer particularly new, have started expanding into new territories only recently – ensuring that their UK operation is running as smoothly as possible in order to be able to replicate that success elsewhere.