Business Beat

A Day in the Runway

As we gear up to welcome Runway Class 7 to ScaleUpNation, we’re sharing a peek into a typical day in the Runway Program. We’ve got an incredible group of impact ventures starting this March 28. There are only a few spots left in the class, for more information please see our Runway Program page.

A Day in the Runway

But first, coffee

8:43 am – The first ventures begin to arrive at ScaleUpDistrict in Amsterdam and the coffee and camaraderie are flowing. It’s not every day that venture founders meet their counterparts at companies in exactly the same growth stage, so each break is designed for a meeting of the minds. Even early in the morning, the questions and conversations go deep:

  • How did you set up a sales team to launch in Germany?
  • What was your experience like with that VC?
  • Where did you find the right CFO?

Claim your market

9:02 am – The 15 venture management teams are ready to get busy. Morning topic: operational excellence for sales and marketing, leaving behind the opportunistic startup style to become a strategic sales machine. B2B sales expert Christophe Frère leads the teams through specific scale-up case studies and war-stories, prompting lively discussion, then the teams dive into action mode and analyze their top customers. Conclusions from the session:

  • Four teams now know exactly what to look for in a professional sales director.
  • Three teams have a clear next step on how to close the big prospect they’ve been talking to for months.
  • One team feels comfortable that it’s time to “dump” a couple customers and focus their energy on a more profitable niche target group.

Diving deep, 1:1

13:35 – A successful serial entrepreneur is a needle in a haystack, a rare breed. Only ScaleUpNation has assembled a unique group of 20 veterans, who are all available to our Runway teams for discussion and insights. Over a healthy lunch, they team up to deep dive on a specific scaling challenge chosen by each venture:

  • Jaap Maljers works with one team on their medical device roadmap.
  • Jörgen Sandig asks the questions that help develop a new perspective on a machine learning agenda.
  • Alexander van Wassenaar advises on a particularly an urgent need: maintaining financial health and a healthy cash flow.

Moving your team to action

15:03 – Many teams take great pride in their start-up culture, but worry about this changing as they scale. Going from a close-knit group of pioneers to an organization with real management, how to deal with the new dynamics, beliefs and empowerment? We’ve found tremendous power in storytelling for keeping the soul of a scale-up alive through the transition. Founders are typically already good at inspirational “pitches” but together with maestro Robert Wolfe, they learn new storytelling formats they can use to motivate their teams to act, trust, learn, envision and reinforce culture. Then, they practice.

  • Three of the teams realize they mostly tell stories to get buy-in from externals, but don’t use stories effectively for inspiring action and building trust with their larger team.
  • Five of the teams decide to use this technique in their weekly meetings, especially to connect with new employees.
  • Two of the teams figure out they had a natural storyteller in their management team they didn’t expect.

And as the day draws to a close, the teams feel renewed energy and continue to share their stories on the way out. Tomorrow they will deepen their team leadership perspectives especially on hiring, taking inspiration from casting a performance. On the enterprise side, the focus shifts to strategy and the big blue ocean ahead now they’re beyond start-up stage. Each session brings to life the ScaleUpNation research insights and expert perspectives, allowing the management teams to step away from day-to-day operations and reflect on the company they want to build.

ScaleUpNation only invites those founders who have made it past the early start-up phase and have shown the vision, leadership, track record, and impact orientation that we know it takes to scale. Find out more about the Runway Program 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 if you want to learn more, or click to apply here.

Board Members that Propel, Not Protect

Supervisory board members of scale-ups focus on value creation rather than value protection, this article describes what it takes.

By Menno van Dijk, founder of ScaleUpNation. With input from Rodria Laline, Valeria Mecozzi, Noëlle Haitsma, Bouke Marsman, Grant Davidson, Wal van Lierop, Frank Landsberger, Jaap Maljers, Floris Croon, and Jan Paul Grollé.

My daughter was a competition skier. Her coach/trainer had many successes on her name. She would have deep insights in what it takes to win. She would not only train my daughter on technique but also coach her on commitment, courage and focus. She would provide coaching on request and also freedom when needed. She would try to propel my daughter towards success, not protect her from failure. It is the kind of relationship scale-up CEOs would look for in their board members.

In my work with scale-ups, the topic of creating a board often comes up. As scale-ups are in a transition from first product to growing sales and services to a broader, international market, they need to build the strategy, organization and network to support this exponential growth. And with increased exposure they need risk management and control, solid financial reporting and compliance with legislation and regulation. And for this they need a board. In fact, our research among Dutch scale-ups finds that scale-ups are almost 50% more likely to have a supervisory board than those young innovative companies that stall.

An Effective Board

Scale-ups do not just need a supervisory board, they need an effective one. And we have found that being an effective board member of a scale-up requires quite a different skillset and mindset than that of a board member in a large, mature enterprise. There are two main factors that drive this difference:

  1. In a good scale-up, the CEO already has a close relationship with all stakeholders and an insight in their needs and expectations. The founder/CEO is a major shareholder. The inspirational role model that has attracted and engaged the employees. The number one sales person, in constant contact with customers. The one that manages relations with suppliers, the public and an early investor community. So, in essence, the CEO already embodies multi-stakeholder management. Little you need to do in this respect.
  2. Your focus in the scale-up phase is on value growth more than value protection. Check and balances, fiduciary duties and mitigating risks and liabilities – these constitute the core of the work for a supervisory board in a large, mature company. But a scale-up still has little to lose. Instead, most of its value consists of future potential and this needs to first be realized before there is anything to protect. Your role is not to help protect the company, but to help propel it.

As a result, as a scale-up board member you are an actively involved inspiration more than the non-executive supervisor at a distance.

It starts with setting direction and expectations.

Your role is to coach the CEO in leading innovation and formulating great expectations. The CEO’s big dream (a “hockey stick” in revenues and value) should be worth making a risky investment in. This hockey stick is an investment graph, and as the scale-up progresses and more investments are coming in, you slide into larger and larger commitments, engagement and risk taking.

You deep dive into the opportunity.

You need to truly understand the market opportunity and competitive dynamics as well as the company’s capabilities and edge. A scale-up pursues a high risk innovative strategy, so a superficial understanding disqualifies you from being of help. So, you spend time diagnosing issues and blind spots. You will do a lot of ‘sensing’ for weak signals through informal conversations with key people in the company. You can listen well and master the art of asking insightful questions – questions that not only further your understanding but more importantly trigger the CEO to realize for him or herself the most appropriate action.

You earn your trust as a coach.

Your founder/CEO is a bit of a stereotype: adventurous, creative, eager to learn, impatient and comfortable to take risk. Open to people, quite informal and preferring respect over power. Very focused on action, execution and speed and very demanding of the team. In the scale-up phase, the distance to the organization increases after the founder has rounded out the management team. To bridge this distance, the founder must become a CEO, shifting from push to pull and from tell to listen mode. Become a better listener, become more patient and more emphatic. It is your role to coach the founder/CEO in this transition and in the new leadership and management roles.

In the journey, you help combine execution and innovation.

To scale the organization needs to be ambidextrous, combining results in operating excellence with results in ongoing innovation and experiment. You need to be comfortable with that as well. On the one hand, you help to instill accountability, install relevant performance indicators and exploit management processes – all to keep the enterprise on track. On the other hand, you help explore entrepreneurial potential. You challenge assumed risks and limitations and help reframe these into breakthrough opportunity. You support a constant quest for innovation – a divine discontent with the current quality of the product. It is not your role to be the head of innovation, but you certainly are its biggest supporter. Whether you are involved in operating excellence or ongoing innovation, you provide access and legitimacy. You lend your name and Rolodex to open doors to new customers, potential partners, investors and knowledge institutions. And in those cases that make all the difference, you are on the road together with your CEO, because in the action you are at your most effective.

You manage the VC relationship.

As the scale-up is getting traction and more people start coming in, everyone wants control and a piece of the cake. For instance, VCs come on board and they require a board seat. It is your role to demand that the VC brings in a person with whom the CEO can build a strong, successful relationship. You need to be demanding, do your due diligence, and ensure the person is committed to go the extra mile in case of trouble, and not simply disengage and step out. Also you need to have a thorough understanding on how financing sources influence business models, how to best raise the valuation in financing and which clauses to avoid.

You work well together with the other board members.

Good dynamics between the board members are crucial. As the scale-up continues to progress, the stakes become higher. You need to manage the resulting power discussions and politics (which most entrepreneurs detest and try to avoid) and keep all goals and interests aligned. Each board meeting requires your answer to questions such as: What is the customer need we are targeting and what is our proposed solution? Who are our competitors and how do we win against them? What do we need to do to make our strategy profitable? What is the game plan for sustaining our competitive advantage or for strategic renewal?” As a result, within the board the following discussion topics come back again and again:

  • What drives all of us? It has to be serving the scale-up’s customers, and serving them extremely well.
  • How do we do that? We want to make sure the reality of execution can keep up with all the new ideas.
  • Who will do it? We help bring in the team builders, the process managers, the operational experts.
  • Why we do it? The overall purpose and holding on to that purpose, is so important.

You educate the CEO on upward management.

Lack of information or information asymmetry is one of the biggest causes for ruptures within boards as it severely undermines trust. Here you need to educate your CEO. Your CEO needs to over-communicate effectively: the more you know the better you can anticipate and the more you can help. THE CEO should want to seek your input and feedback and assign you specific tasks. And provide quantified goals and progress metrics to ensure quantifiable and objective discussions at board meetings.

Do you have what it takes?

In summary, do you have what it takes? Do you have real experience as a scale-up entrepreneur? Do you have the insights in the industry? Do you understand how to combine results in operations with results in innovation? Do you understand the ins and outs of Venture Capital? Do you And most importantly, do you know how to coach effectively? In delivering support programs for scale-ups we have come to realize that the current board training programs available are not sufficiently tailored to this specific role. So, we have developed a program “Board Masterclass” that fills this void. The format is strictly peer based, focused on coaching rather than controlling. It also focuses on value creation rather than value protection, and experiential and explorative rather than classical lecture-based.