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Annie Chen

Top Scale-up Reads of 2018

Our favorite reads of 2018

Ready to curl up near the fire and increase your learning velocity? Merry Christmas and Happy New Year from ScaleUpNation. Looking forward to an enlightening 2019, full of growth. Please find below our Christmas gift to you: the top scale-up relevant reads of 2018.

Skin in the Game by Nassim Nicholas Taleb

Can you make significant change in the world without putting some skin in the game? No radical innovation happens without an inspiring leader, and these are often the ones that shoulder the biggest risks.

In this year’s release from economist-turned-philosopher Nicholas Nassim Taleb, he challenges the hypocrisy of advising, selling, or participating in any endeavour without being directly involved. Some would say that only those people should be heeded or trusted if they have a personal stake in the outcome, especially if they also partake in the consequences. For instance, if you do not pay your cobbler upfront, he will take care in repairing your shoes knowing that if he screws up, you will not pay him. In a more brutal and honorable past, men were executed if the building they had constructed fell down.

But what if we expect our agents of change to take serious risk? Should we punish an army general that devices and executes a high-risk strategy aimed to significantly shorten the war, that becomes a disaster costing many young lives? Should a political leader be sued when her innovative policies proved highly counter-productive? Should an entrepreneur that wants to bring a new medicine to the market, fails and goes bankrupt, lose his life’s savings?

Ideally the potential personal loss should be designed to align with the amount of risk we want the change agent to take. So, for us as mission-driven entrepreneurs the consequences of putting our skin in the game should not be career ending or resulting in personal bankruptcy. If that were the case, we would act too conservatively. We want to remember heroes for their attempts, not just their results.

“If you don’t take risks for your opinions, you are nothing. People want to have their soul in the game.”

Building on Bedrock by Derek Lidow

More than 30% of the USA population is currently or at some point engaged in or related to someone in entrepreneurship. Some economists argue that we are all entrepreneurs, so long as we can make decisions for ourselves – for whom will we work, what will we buy, how do we spend our time? All of it is entrepreneurial, and is recognized as such.

In this book, the author and Princeton professor Derek Lidow asks whether you are ready to be an entrepreneur, and if it is the right thing for you. It asks you to explore your skills as a founder, co-founder, investor; it answers the who, what, when, where, how, how much, and why of founding. He divides entrepreneurs in two separate groups: the high-risk entrepreneurs, helped by VCs to create fast-growing companies, and bedrock entrepreneurs, who act with patience, low-risk and build a company with steady vision. It explores motivations, creativity, balancing life with entrepreneurship, and whether or not this is the path for you. The final, daunting statistic? 70% of people who actually become full-time entrepreneurs in a typical year abandon their efforts, or do not make their money back whatsoever, losing time and risking relationships.

 “Contrary to popular opinion, ideas cannot generate a passion required to lead successful and self-sustaining companies – not even great ideas. Passion for an idea, inevitably, fades when you realize customers want something different, or during the hardships to making it happen. Setting up a company is easy, but growing it into something valuable and self-sustaining is extremely hard.”

Powerful by Patty McCord

Netflix chief talent office Patty McCord writes the book on how to build a strong culture. In her book, subtitled Building a Culture of Freedom and Responsibility, she outlines how a world-renowned company like Netflix was able to develop and restructure its team as it went from mail-order DVDs to leading streaming platform, now to an entertainment empire.

The most important takeaway from Powerful is to abandon the idea that the people with whom we work are family, when they are a team. Like all teams, changes and rotations to the roster as crucial to the success, sometimes at the cost of trusted and loyal employees, or preferred ways of working. While weaving stories of culture building using discipline, self-efficacy, trust and freedom, a company’s culture begins to form thanks to “stunning colleagues with excellent skills”. As business grows, bring in high-performing people and minimize rules, McCord advises. An outstanding team and culture can solve almost any challenge together, while ensuring the best chance of success for the mission and dream at a given stage.

Just as great sports teams are constantly scouting for new players and culling others from their lineups, our team leaders would need to continually look for talent and reconfigure team makeup. We set the mandate that their decisions about whom to bring in and who might have to go must be made purely on the basis of the performance their teams needed to produce in order for the company to succeed.” 

See you at the AOM Scale-up Conference

Academy of Management Conference

This week at ScaleUpNation we’ve been busy preparing for the Academy of Management Specialized Conference in Tel Aviv next week. The theme “From Start-up to Scale-up Strategies: Coping with Organizational Challenges in a Volatile Business Environment” is timely and relevant as we develop further insights and tools that we can immediately put into practice for the scale-ups in our programs.

ScaleUpNation is joining this conference to learn from the impressive slate of participants, including those whose thinking has been instrumental in our research and product development. We’re especially looking forward to:

Workshops

In addition to learning through conversations and attending lectures, we’re also hosting two interactive workshops on Monday December 17. This is also the moment we begin to share our Lab’s first academic papers and new thesis on “The Art of Scaling.”

The workshops are interactive: designed to leverage the wisdom of the crowd to both learn more from true experts on scaling topics and leverage these experts to help real (in the flesh!) scale-up founders facing immediate challenges. We’re looking forward to our sessions:

Into the Black Box of Scaling

In the workshop, we invite participants to engage in a researcher-practitioner discussion on two questions:

  1. Which scale-up success factors are insufficiently understood or implemented by scale-up management teams, so warrant better awareness and implementation?
  2. Which scale-up success factors are insufficiently clear or ambivalent and need further research to avoid simplistic actions by scale-up management teams?

We, as researchers and practitioners will share what we know and want to get across and as importantly what we don’t and need to find out. This is an ideal opportunity for practitioners and researchersto collaborate based on shared passion and purpose.

Acting as a Scale-up Board Member

In this session, we invite participants to engage in acting as a board member. CEOs from Tel Aviv-based scale-ups will participate in this session and ask you to engage in a board meeting. We will ask you to  reflect on the dynamics and effectiveness, with regard to the following:

  1. What is required to be a scale-up board member?
  2. What is the difference between investing, advising and coaching?
  3. What inhibits you to be most effective?

As Board membership is an experience game, we especially welcome to this session those participants who, like ourselves, already fulfill board roles in young innovative firms.

This is a chance for practitioners and researchers to define the key challenges of scale-up board membership, to share the best practices from research and articulate what we still need to find out. Moreover, we aim to give you direct connections to the vibrant Tel Aviv scale-up community.

Looking forward to seeing you at AOM next week!

ScaleUpNation

Social challenges are also entrepreneurial opportunities. Many innovative new businesses are started but only very few are able to scale.

And only those that scale really moves the needle in terms of social impact, economic value creation and new employment.

Over the last years, we worked intensively with a portfolio of about 100 scale-ups in the Netherlands to understand the factors that increase the probability of scaling success. We work on strategy/firm factors, business practices, organizational/HRM practices, as well as leadership development. We combine practice with research.

In our work, we find that scaling is an art, not a mechanistic formula. Scale-ups operate in a volatile, uncertain, complex, ambiguous world, so a lot is outside their control. Scale-ups are entrepreneurial by nature; they engage in risk taking and therefore depend on good fortune. Their success is path dependent. And finally, scaling is organic, interconnected, symbiotic. Still, we strongly believe that practices can be distilled that significantly increase probability of scale-up success.

Attending AOM:

Hayat Chedid, has a corporate background with a range of managerial positions in industrial innovation settings, followed by a second career in leadership coaching. She supports a portfolio of scale-ups in leadership development and culture building. She will lead the introduction sessions and group facilitation.

Menno van Dijk, has a consulting background as senior partner at McKinsey company, leader of its European Media practice, and founder of its first software business. Menno founded THNK, the School for Creative Leadership, and ScaleUpNation which blends research on scale-up success factors and support to impact oriented scale-ups. He will lead the storytelling session, the setting the scene session, facilitate in the topic break-out and will participate as scale-up CEO.

Jorgen Sandig (Netherlands), is an IT expert with focus on CRM and embedded intelligence. He is the founder/CEO of Scyfer, a Dutch AI scale-up which he sold to Qualcomm. Since he is leading ScaleUpNation’s research efforts. He will facilitate in the topic break-outs and participate as scale-up CEO.

Afroditi Terzi (Greece) is a senior researcher at ScaleUpNation. She leads our research in comparing scale-ups to those that stall, across firm factors, business practices, organizational concepts and leadership traits. In addition, she orchestrates our scientific literature research. She will facilitate in the topic break-outs.

Noam Gressel is a Tel Aviv based serial entrepreneur an investor. He will orchestrate the participation of scale-up CEOs in the Board session.

Event: Cracking the code of corporate – venture collaboration

Event: Cracking the code of corporate & venture collaboration

Increasingly, corporates are sourcing ideas and solutions from the tech start-up/scale-up community, but cooperation can be ad hoc and notorious for moving slowly with minimal return.

There must be a better way! Let’s find a way to work together and crack the code of corporate and start-up/scale-up collaboration by:

  • Learning from leaders who are doing it, not consulting or selling it
  • Discovering insights backed by both science and hands-on practice
  • Meeting corporate and start-up/scale-up leaders who are striving towards your same objectives

All at an event hosted by ScaleUpNation, Rockstart, and Scoutely on November 28 2018.

Cracking the code of corporate & venture collaboration event. November 28 at ScaleUpNation in Amsterdam.

Agenda

14:30 – 15:00

Doors Open

15:00 – 15:15

Welcome

  • Intro from Menno van Dijk/ScaleUpNation

15:15 – 15:40

The Next Wave of Innovation

  • Sander van der Blonk/Scoutely

15:40 – 17:45

Breakout Sessions

  • How to find our common purpose? (ScaleUpNation)
  • How to ascertain trust between people? (Rockstart)
  • How to organize the collaboration process? (Scoutely)

17:45 – 19:00

Reflection and Drinks

For whom:

For corporate leads in innovation, technology, business development, venture capitalist, or M&A acquisitions who currently or hope to collaborate with start-ups/scale-ups.

For venture founders of technology start-up/scale-up who either do business with corporate customers, have a corporate investor, or an ambition to be acquired by a corporate

Participation available by invite only. For consideration, please email your intention to join to Annie (annie.chen@scaleupnation.com).

Date

28 November, from 15:00 – 18:30. Doors open at 14:30 with coffee and refreshments.

Location

ScaleUpNation, Burgerweeshuispad 201, 1076GR Amsterdam. Parking available via ParkMobile.

Hosted by

ScaleUpNation

The growth platform for Dutch impact scale-ups.

Rockstart

Supporting start-ups with access to capital, markets, community, and expertise.

Scoutely

Matching corporates with start-ups as an independent 3rd party.

For more information

Check out Menno van Dijk and Sander van der Blonk’s article on Collaboration Principals for ventures and corporates.

To inquire about an invitation, please reach out to annie.chen@scaleupnation.com.

Corporate & Venture Collaboration Principals

By Menno van Dijk and Sander van der Blonk

Cooperation between large corporates and young innovative ventures can have many flavors. These range from R&D collaboration, to opportunities for leveraging the corporate’s brand and customer base to find initial users. It can also be about strategic investments. The one thing in common is that cooperation between large/institutional and small/opportunistic invariably difficult and often frustrating. Focusing on making the collaboration work before jumping right into the product might feel like slowing things down, but in the long-run makes the entire collaboration more likely to succeed.

For a cooperation to work between a large corporate and a small scaling venture requires a lot, including shared purpose, people/principles fit, and a trust-building process.

Shared Purpose

When two parties collaborate without a shared purpose, a divorce looms ahead. In the case of a VCs exiting their ownership in a venture and a corporate entering – where does the management’s interest lie? Are they waiting until the end of their lock-up, or do they face a future as employees within a larger entity? When a start-up and a corporate collaborate on R&D, is the goal to quickly reap benefits and then act independently, or is it to build a long-term partnership? When a scale-up develops a corporate as a launch customer, will they give exclusivity or will the corporate’s competitors also be served? The first thing to establish a common purpose in terms of intent, targets, and time horizon. This requires scale-ups to think much more strategically.

People/principles fit

Collaboration is between people, not companies, who genuinely enjoy working with each other. This is often based on shared principles, common culture and having the same style and background. In practice, the management of a young, innovative enterprise is often younger, opportunistic, and independent; it is also less formal, less reliable, and less experienced. It requires careful casting from the side of the corporate to create a good match. It also requires the large corporate to understand that a start-up can often not navigate the complex organization to get all the buy-in that is generally required to make an initiative work – they often do not have the resources to do so. The corporate needs to have an internal champion to do this for the scale-up. They also need to understand that timelines matter more to a scale-up – a nine-month delay can be nothing for a corporate, but can bankrupt a younger, smaller venture.

Trust building process

Trust comes by foot and leaves on horseback. This quote about trust is attributed to Johan Thorbecke, the Dutch politician who was responsible for the first constitution in the Netherlands in 1848. Trust does not happen over one dinner: it solidifies over a series of interactions of working together, making promises and delivering on these.  This is the trust building process. In this respect, the “fake it until you make it” mentality of some young ventures is counterproductive. The “let’s straightjacket them” approach of some corporates is equally ineffective.

* * *

So, where does this leave us? As usual, the soft stuff is the hard stuff. This should raise the awareness of the start-up/scale-up to think before acting. Collaborate only with corporates you admire. On the other end, corporates, with their deeper and more sophisticated competency in collaboration processes, they can take the lead to ensure it works. If the mountain does not come to Mohammed, Mohammed must go to the mountain. And in this case, the mountain, surprisingly is the start-up/scale-up, and Mohammed the corporate.

ScaleUpNation, Rockstart, and Scoutely will be hosting an event to explore these insights with corporates and start-ups/scale-ups. Interested in an invitation? Please learn more here.

 

 

Are you an Effective Scale-up Board Member?

By Menno van Dijk, Laurie Kemp, Hayat Chedid, Noëlle Haitsma, and Floris Kroon

Governance can make or break a scale-up. We all have our own war stories and examples of founders/CEO’s being kicked out of their company, board meetings going sour, and politics steering us away from what should be our focus: realizing our joint vision.

Because having a value-adding board is far from obvious, we prototyped a Board Masterclass Program for Scale-up Board Members with two groups of 70 experienced board members, business coaches and VC investors during the first half of 2018.

Over the course of 5 days, we explored the various elements of scale-up board membership, shared best practices between participants, invited experts and learned from cases and real life situations. Here, we share some of our key findings.

  1. A scale-up is not a start-up

The common assumption that after achieving product-market fit the rest is history is nonsense. As ventures scale, the challenges and many demands (both external and internal) a CEO/MT encounters only increase in size and complexity. As board member you need to support the founders in their transition to become executives, and the team in their transition to a full organization with well-oiled business functions (sales, service, production, development), processes and culture.

  1. Coaching seems easy, but proves difficult in practice

Many board members have a tendency to offer direction and advice. Even with the best intentions, this undermines the responsibility, confidence and leadership effectiveness of the founder and his/her leading team. Coaching – i.e., asking the type of questions that help the leadership team gather their own thoughts and make their decisions is far more effective, but difficult to master for the typical board member. As common management wisdom has it: tell someone what to do once, and s/he might do it. Try it twice, and you will kill any future creativity and independence of thought.

  1. It’s a balancing act

As our participating board members became more proficient in coaching, they also realized the multitudes of roles board membership requires, and the difficulty in balancing the roles of coach (at the one extreme) and investor (at the other extreme). In practice, everyone involved in a scale-up wears multiple hats, and there is no clear division of roles.

  1. Withhold judgment and trust the process

Board members of scale-ups are often (former) entrepreneurs who tend to be quick on their feet and react immediately and intuitively. Avoiding this instinct, reflecting and following a more thoughtful and disciplined discovery and decision-making process invariably leads to better solutions and gives the MT much needed structure and control. So try to avoid giving into your primary reactions and adhere to process instead.

  1. Keep your eyes on the prize

Scale-ups need to keep innovating, to stay ahead of competition which is quick to copy their initial lead. As a board member, you build the confidence and conviction in the MT to not only focus on sales and production targets for your first-generation product (even if the VC’s put a lot of emphasis on this) but to also keep developing new products and business opportunities, to rapidly expand internationally and to be opportunistic. It can be great fun to explore these opportunities together with the MT as long as you avoid imposing your vision on them. No entrepreneur pursues someone else’s dream.

  1. Excellence is about creating leverage

Scale-up CEOs try to solve every issue at hand themselves. They might drag you into this, e.g. by asking you to sell to a big account, help de-bottleneck production or resolve an organizational issue. A good board member helps the CEO lead instead of firefight, so to articulate the bar for operational excellence, to hire top talent with the right mindset and values, and install continuous improvement processes, instead of helping out on execution (even more firefighting).

  1. Let go of your own biases and frames of mind

Your success is based on your specific situation and does not automatically translate into the situation your scale-up is now facing. History does not repeat itself, especially not when scaling an innovative scale-up. You can only avoid your biases through continuous probing and open-minded listening. Once you start to better understand the personalities of the MT, the dynamics of the industry, the business model, the qualities and vulnerabilities in the organization, your biases start to disappear. And chances are that even when you think you are listening without judgment, you probably aren’t.

  1. You ARE the mirror

Interviewing customers as well as employees is your obligation. While this may not be welcomed by to the CEO and s/he will want to control the process and outcome, doing employee and customer discovery your own is critically important. It is the only way to provide candid feedback and a mirror on how the CEO/MT influence and impact others.

  1. Maintaining constructive board dynamics is your fiduciary responsibility

Having discord between board members is the last thing a scale-up MT needs. Boards should build a strong foundation of trust among themselves, a strong sense of togetherness in supporting the scale-up and clear alignment on mission and vision of the business and qualities of the MT. So, actively build trust instead of assuming it is there already.

  1. And finally: It is not about you.

Yes, you are an accomplished professional with many years of executive, investment or entrepreneurial experience. That is what got you a seat at the table. But now that you are there – it is not about you, and it never will be. Scale-up board membership is about supporting your CEO and his/her MT on their journey. One Board Masterclass participant shared that his biggest learning was that he is not yet ready to be a board member, because his self-orientation was still too strong. He realized that, at this point in his life and career, he preferred to still be in the driving seat. He has since taken an executive position at a fast-growing Dutch company.

Scale-up board membership is exhilarating but also much more difficult than you might think. It requires deep self-reflection and ongoing self-development to be able to help others. Mastery requires a learning mindset, humility, and a good sense of humor.

Are you an effective board member? Do you want to develop yourself as a board member, with a highly curated group of fellow board-members? We are launching two new Board Masterclasses on September 26th and October 18th and have limited spots left for both groups. Please reach out to jacqueline@scaleupnation.com if you want to learn more, or click to apply here.

Building for Culture

The value of a strong company culture is clear, but building a strong culture is far from straightforward. We identify and expand on healthy practices for building a culture: how to best characterize your company’s unique person, recognize the common elements of a healthy culture and leverage best-practice tools to strengthen your culture. 

Building for Culture

What is culture? Culture has been defined as the way we think, act and interact. What about what we believe in, and what binds us? It is as well a shared value system of norms, purpose and expectations, aimed toward a better future.

In business, they say culture eats strategy for breakfast, with culture as the hidden ingredient to success. All the big dreams and strategy maps won’t amount to much without a culture of people that knows how to collaborate toward a goal. As scale-ups ramp up and more people join the team, leaders acknowledge the importance of culture and at the same time its seeming complexity renders leaders overwhelmed.

Culture is also deeply underestimated as something malleable, and easy to unlearn and readopt in new ways. This could not be farther from the truth: 83% of failed mergers can be attributed to unsuccessful cultural integrations. We might believe that culture is defined differently by individuals in the team – it feels intangible and subjective. Without ever simplifying this incredibly complex topic, our work with scale-ups found that leaders recognize culture as an incredible space for opportunity.

We identify and expand on healthy practices for building a culture:

  • how to best characterize your company’s unique persona
  • how to recognize the common elements of a healthy culture
  • which best-practice tools to adopt to strengthen your culture

Your culture is unique

Much like Marketing teams design a detailed cut-out of their customer persona, leadership teams can design for their own culture’s persona.  No two company cultures are the same, and their very definition implies that they are not like another set of people and behaviors. They are like a personality, impossible to duplicate and distill their way of thinking, feeling and behaving.

We found the following ways helpful to tease out your team’s uniqueness:

  • Word Cloud – everyone maps out adjectives to describe the company’s persona as they see it. Management collects and combines those that resonate toward building a culture with a healthy competitive advantage.
  • Pen portrait / persona – A pen portrait is an informal description of a person or group of people. Draw out your culture’s by using personality traits, demographics, likes and dislikes, appearance, and attitude based on product, vision and lifestyle.
  • Birth story – Every company has a birth story, and important milestones that formed its existence. Does everyone in the team know how it all started? Write out either founder’s story or company genesis in a 1-2 pages based on key events and values.

When the company understands what unites and binds them, culture emerges as an agent of cohesion and alignment. What if, instead, you could also build your culture by enforcing certain elements of principles, behaviors and practices?

Healthy cultures have common elements

In the majority of scale-ups we assessed, we found four cultural elements at their core. These are:

  • Ambition and performance-orientation: the team shares a winner’s mentality, and comes to work with a sense that what they are doing is changing the world.
  • Eager to learn and improve: cynicism is trumped by curiosity, combined with an optimistic mindset toward growth and becoming great together.
  • Cohesion, togetherness and trust: each team player knows their relevance to the overall success, and feel themselves to be part of the A-team. They also create a strong sense of belonging and sameness.
  • Commitment and resilience: everyone shares the conviction that success comes by working hard and pushing through the challenges.

These elements work on a spectrum, and the risks of going overboard are real. The urgent nature of scaling risks can bring out a dark side to all four parts. Too much ambition and performance orientation can lead to over-identifying as “you are your number”. Focusing on constant improvement can degenerate into an imposter syndrome. At the same time, being too cohesive as a unit risks bias and xenophobia, while over-commitment risks morphing into bullish stubbornness.

Strengthening the culture

Once we identified these common elements, the question was on how to design for culture, versus leaving it emerge on its own. Mapping it with too much detail dilutes its freshness – culture has so many dimensions that all of its flavors, freshness and subtleties would suffer inside a framework.

Here it comes to showing your work, and walking the talk with consistent behaviors. We identified the most important building blocks to strengthen your culture.

Storytelling & Role-modeling: What is the story you are choosing to tell? What do you highlight and what do you exclude? Role-modeling: How much do you embody your culture in everyday actions? Does everyone in your team see you walk the talk? Does everyone know what is important to show and share?

Skill-building & Hiring and Onboarding: How serious are you about growth and development? What learning mechanisms have been established and embedded? Identify where you can instill learning mechanisms and experimentation. How much do you spend on training? What are the key business metrics for learning? Create Personal Development Plans per project that include before and after goals.

Rewarding: What gets rewarded becomes culture. What do you reward, and how? In what way, is it publicly or privately, and with what frequency? Is it a superhero story, or a daily dose of excellence? What do you celebrate as a team? These are not the team drinks and social events, rather the milestones that become part of the DNA.

Interventions: Where is the line? What are the unwritten rules? How do get the best out of others? Are company values and culture simply a slide in PowerPoint, or does the team embody them fully? These are team essentials, and not specific to the role.

Rituals: How do you incorporate rituals in your ways of working? Often the value is in the ritual act itself, and it is more symbolic than the output. What things of emotional and symbolic value do you cherish in your organization?

Self-assessment

How does your culture score on these? If you are just starting, we advise to focus on three and build up toward all five blocks. We have designed a self-assessment with the following questions to build a clear and cohesive team culture.

  • What is a story I find very important to tell and what is the underlying message?
  • How do I act in a town hall session, what do I want to demonstrate?
  • The last time I intervened in a heavy-handed manner, what was my point?
  • Whose success did I celebrate recently and why was this success so valuable?
  • How much money do I set aside on employee skill-building?
  • During Christmas dinner, what do I highlight in my speech?

Hungry for more?

How have you designed your company culture? We would love to hear about your experience.

For further research on the topic, we recommend:

The Masochistic Reflexive Turn by Cederström and Grassman

The Z Theory of Motivation by William Ouchi

The Culture Code by Daniel Coyle

Interested in joining a scale-up entrepreneur or board member program? Please check out our program page.

The Essential Product Roadmap

A well-crafted product roadmap can a be startup’s key step toward scale. Once the product hits square market fit, it needs to get to work toward launching the next product fast, or risk death. How to build a solid product roadmap? Read for tips and watch-outs based on company size.

Product Line vs. Roadmap

Take a look at the history of Apple’s product line: what started as a few unique products began to accumulate over the decades, peaking in 1993 with a total of 47 products and bleeding money.

Three years later, Steve Jobs returned to Apple and gutted the overstuffed product line. With a team and a vision aiming at changing the way people used computers, they built a product roadmap with significant stops along the way: first came the iMac G3, followed by the iPod, iPhone and iPad.

Apple achieved market dominance thanks to its ability to revolutionize new markets, while outpacing any competitors. iPod’s boom inspired other companies to create similar devices, but before the competition could reach similar level of quality, out came the iPhone. Apple bulldozed through product segments before they had time to turn stale, and erected entirely new goalposts for others to chase. Each new product brought in a flood of new users, while loyal customers rode one high after the other.

A product market map provides a clear development path for launching your products into new market segments. Traditionally, companies launched a product in the market and continued to maintain a cycle of upkeep and bug-fixing, but this method proved outdated as technology advanced. Cell phones companies in the 1990s and 2000s were so focused on making their latest release the smallest and thinnest, they never saw the iPhone coming.

At the same time, roadmaps have their features and issues, depending on the sizes of the enterprises. Keep in mind that all size is irrelevant to these three issues: priority setting, managing expectations, and how to use the data you continue to gather.

A Tailored Fit

Roadmaps have unique features and issues depending on the sizes of the enterprises. Keep in mind that all size is irrelevant when it comes to three main matters: priority setting, managing expectations, and how to extract information from usage data.

Small Start-ups

Watch-outs

  • Being hyper-ambitious and driven risk complicating what should stay clear and simple.
  • Intense focus on the details might prohibits what could be welcome change.

Practice

  • Stay flexible and agile in the early stage level.
  • Keep the roadmap clear of hard dates, while still making objectives and key results.
  • Focus first on how to best approach the innovators you want using your product and process all the information that are produced in these first contacts.

Small to Medium Enterprise

Watch-outs

  • Expansion generates complexity and the risk is to want to simplify what is naturally becoming complex.
  • Experts working in a silo can create confusion and misunderstandings.

Practice

  • As your company becomes more mature and aimed toward processes, the roadmap becomes a hybrid of customer demands, team efficiency, and overall flow.
  • Dates and times are set, but instead of being fixed in stone they can be divided in a framework similar to the three horizons – current, midterm, future.
  • What this provides is a comprehensive view of the company and how all its elements work together toward the shared goal.

Established Enterprise

Watch-outs

  • Focusing only doing more of what works can become stagnant.
  • Internal disruption in growth guarantees external combustion.

Practice

  • Your company is now at a higher level and things are become far more complex.
  • At this level, creating goals centered on dates makes sure targets are met. With so many departments working in synch, a timed roadmap guarantees everyone is held accountable.
  • There are many moving parts in the overall operation concurrently, and added stakeholders will have entered your process, so the more universal clarity the project can enjoy, the more each player can know what the others are doing and collaborate clearly.

Vacancy: Operations Intern

About this role/responsibilities

From September to December (4 months), our ScaleUpPractice team has an internship opportunity for an ambitious student that is excited about hospitality, operations and entrepreneurship!

You will have two main projects:

1. The Runway Program: The Runway program is a peer-based learning class where the founders of 15 ventures come together to learn how to scale their businesses. The Runway classes meet once a month for four months. ScaleUpNation will be running three Runway Classes in the fall: one for triple-bottom line ventures, one for science ventures out of universities, and one for corporate intrapreneurial ventures.

2. The Board Masterclass: This class is for people who are already board members of scale-ups and looking to increase their impact with their ventures. ScaleUpNation will be running two Board Masterclasses in the fall, each consisting of 5 full days of interactive workshops with 30 board members.

This person will be working with the Operations Lead to ensure that all five (three Runways and two Board Masterclasses) of these programs run smoothly. Responsibilities include ensuring participants and greeted and feel welcome, catering runs smoothly, class materials are always ready, facilitators are prepared, and whatever else needs to happen to make these programs a success.

This internship is a well-structured learning opportunity during which we will support you to work on your professional development. You will have the chance to be part of our international, dynamic, and smart team and take on responsibilities that will provide you with insight into our young organization. You will also get great exposure to our community of entrepreneurs.

You will work from our office at Tripolis, Burgerweeshuispad 100, 1076 Amsterdam. This can be a 4 or 5 day a week role. A compensation for the internship can be discussed.

Are you …

  • Service oriented (experience in hospitality is an advantage)?
  • A young and ambitious student in the fields of Hospitality, Communication, Organization,Event or Business management?
  • A great communicator, a team player, and a self-starter?
  • Flexible and reliable?
  • Fluent in English?
  • 80-100 percent available from August 2018 to mid- or the end of December 2018Apply now

To apply, please send a cover letter and a recent CV to Nina Kotterik, program manager (nina.kotterik@scaleupnation.com) by Friday August 17. Interviews will be held on 21/ 22 August. The ideal start date is the first week of September.

The Transition from Founder to CEO

Successful CEO-cum-founders are a very rare breed. Most founders surrendered management control long before their companies went public. (Based on the research in the US) by the time the ventures were three years old, 50% of founders were no longer the CEO. In year four only 40% were still in the corner office and fewer than 25% led their companies’ initial public offerings.

Based on 2008 HBR Article from Noam Wasserman “The Founder’s Dilemma”, summarized and adapted Menno van Dijk of ScaleUpNation.

Four out of five entrepreneurs are forced to step down from the CEO’s post. Most are shocked when investors insist that they relinquish control, and they’re pushed out of office in ways they don’t like and well before they want to abdicate. The change in leadership can be particularly damaging when employees loyal to the founder oppose it. In fact, the manner in which founders tackle their leadership transition often makes or breaks young enterprises.

Start-up phase: Founder’s vision and drive

At the start, the enterprise is only an idea in the mind of its founder, who possesses all the insights about the opportunity; about the innovative product, service, or business model that will capitalize on that opportunity; and about who the potential customers are. The founder hires people to build the business according to that vision and develops close relationships with those first employees. The founder creates the organizational culture, which is an extension of his or her style, personality, and preferences. From the get-go, employees, customers, and business partners identify start-ups with their founders, who take great pride in their founder-cum-CEO status. New ventures are usually labors of love for entrepreneurs, and they become emotionally attached to them, referring to the business as “my baby” and using similar parenting language without even noticing. Their attachment is evident in the relatively low salaries they pay themselves.

Scaling coincides with sharing control

Founders realize that their own financial resources aren’t enough to enable their ventures to capitalize fully on the opportunities before them. They convince others to invest in their company. Outside directors will join the company’s board.

As they raise resources in order to capitalize on the opportunities before them, their company might become much more valuable, and the value of their share would soar. But as a consequence, they will have to give up equity, so share control over major decisions.

Even if the company can be fully bootstrapped sharing control can make sense.  The reason is that scaling is a team effort.   A team of three or more co-founders all sharing in the control of the enterprise significantly increases the chance of scale-up success. Successful scale-ups allow employees to share in the equity and adhere to inclusive decision making.  Having a Board does help a company to scale.

Scale-up phase: Growing Pains

The first major task in any new venture is the development of its product or service. But when the founders celebrate the shipping of the first products, they’re marking the end of an era. At this point, leaders face a different set of business challenges:

  • Strategic Leaps: The founder needs to make smart bets in terms of new product introduction, additional market expansion and internationalization.
  •  Operational Flywheel: The founder has to build a company capable of producing, marketing and selling large volumes of the product and of providing customers with after-sales service.
  • Organizational Flow State: The organization has to become more structured, and the CEO has to create formal processes, develop specialized roles, and, yes, institute a managerial hierarchy. The venture’s finances become more complex, and the CEO needs to depend on finance executives and accountants.

The dramatic broadening of the skills that the CEO needs at this stage stretches most founders’ abilities beyond their limits. Some venture capitalists invest in a startup only when they’re confident the founder has the skills to lead it during the scale-up phase.

Pass on the baton or up your game

In the scale-up phase, the board demands a CEO capable at managing the other executives, who has deep knowledge of the functions the venture has to create and has experience in instituting the new processes to knit together the company’s activities. The board’s task is straight-forward if the founder underperforms as CEO.

Some scale-ups have founders that are already experienced, credible scale-up CEOs. In other cases founders who want to be CEO for a longer time need to quickly learn new skills. Boards can coach their CEOs to develop and apply these new skills while the company is scaling. If they do, founders can become accomplished enough to maintain control.

Even if the need for change is clear to the board, it isn’t clear to the founder, because the founder’s emotional strengths become liabilities at this stage. Used to being the heart and soul of their ventures, founders find it hard to accept lesser roles, and their resistance triggers traumatic leadership transitions within young companies.

Keeping Founders on Board

Ideally, a board should keep the founder involved after he is no longer the CEO.

After all, you can replace an executive, but you can’t replace a founder. And the unique skills demonstrated to envision the opportunity and achieve product/market fit during the startup phase, are still highly relevant during the scale-up phase.

Many times, keeping the founder on board is easier said than done. Founders can act, sometimes unconsciously, as negative forces. They can resist the changes suggested by new CEOs. But also, those (co-founders, employees, investors, board members) who have now gained control can misuse this for selfish objectives or have misplaced confidence in own capabilities and judgment. The founder can leave deeply disappointed feeling his legacy being squandered. Sharing and relinquishing control is a courageous act. The responsibility is also on the receiving end to recognize this and maintain appropriate balance and restraint.

In US studies of technology start-ups and high growth firms, about a third of founder-CEOs leave their companies when a professional CEO comes in, while about half move to the board of directors (often as chairman) and the remainder take a position below the CEO.

Boards can sometimes help founders find new roles. When a founder has an affinity for a particular functional area, such as engineering, the board can offer him or her the opportunity of focusing on that area and letting the new CEO “take on all the things you don’t like to do.”  The more concrete value the new CEO adds, the easier it will be for the founder to accept the transition.

Entrepreneurs need to come to grips with what success means to them. Founders who understand that their goal is to achieve something larger than themselves in terms of impact, value creation and organizational size will not view themselves as failures when they step down from the top job, as long as these goals are being achieved.  Founders must, as the old Chinese proverb says, “decide on three things at the start: the rules of the game, the stakes, and the quitting time.”

Interested in joining a scale-up entrepreneur or board member program?  Please check out our program page.

For further research on The Founder’s Dilemma, we recommend Noam Wasserman’s book.

HealthTech Leadership Breakfast Series

HealthTech Leadership Breakfast Series

Introducing the ScaleUpNation HealthTech Leadership breakfast series: a monthly forum for founders and management teams of HealthTech ventures to work together on challenging leadership topics. Each of the 4 (2 hour) breakfast sessions will be dedicated to a relevant topic for health-tech scale-ups.

Addressing the HealthTech Challenges

  • What kind of leadership can disrupt a conservative, highly regulated ecosystem?
  • How to attract highly sought after talent whilst competing with big industry and big health institutions?
  • And more. Questions will be co-generated together with attendees – you’re invited to send in the topics that are top of mind and in need of an expert discussion.

Tailored format

An intimate gathering of founders/management leaders from 10 scale-up companies in the HealthTech field.
These sessions follow Chatham House Rules to create an atmosphere of privacy and anonymity but allow leaders to leverage their learnings for personal and company growth.

Led by Hayat Chedid

As the trusted leadership partner for many of the ventures in the Flight Program, Hayat has an inside view into the challenges facing HealthTech leaders and is looking forward to facilitating a master forum with these inspiring management teams.

4 Engaging Sessions

The breakfasts will take place from 8:00 to 10:00 on:
September 28, 2018
November 28, 2018
January 30, 2019
March 28, 2019

Fee: €900 for the series, per person, ex. VAT

Location TBD in Amsterdam

Interested in joining? Please get in touch: nina@scaleupnation.com.

The ScaleUpNation HealthTech Focus

The ScaleUpNation team is dedicated to empowering HealthTech venture leaders as part of our mission to enable triple bottom line (people, planet, profit) ventures and founders.

We are proud to have worked with many innovative HealthTech scale-ups, including: Stockhos, Siilo, Mellon Medical, Minddistrict, Quantib, Forcare, Happitech, Incision, SocialMedwork, NLC, tinybots, Nemo Healthcare, Usono, Robot Care Systems, BioDetection Systems, Sensara, and INCISION.