Prior to Lockdown, the scale-up concept was gathering real momentum and high-growth entrepreneurs were gaining the type of attention typically afforded to start-ups. But then the pandemic happened, and for many high-growth companies, survival mode kicked in. This feature looks to answer the question – how are scale-up companies adapting and how optimistic are they for the future?
What are the main challenges you are seeing high-growth companies facing in your network?
Mike Dias – Chief War Officer, ScaleUp Valley: “I would say that it is the same challenge that any Premier League top four team is facing now: how to retain, attract and build a world class team and how to keep that team focused on doing what it takes to win each game, instead of complaining about the threats that they can’t control.”
Juliet Rogan – Head of High Growth & Entrepreneurs, Barclays: “The challenges facing the segment are much like that of other businesses, particularly if they are in a deeply affected sector such as hospitality and leisure. That being said, we have seen entrepreneurs and high growth businesses be relatively quick to adapt to the ‘new normal’ – both from a remote working perspective, but also through pivoting to leverage potential commercial opportunities.”
Mark Sanders – Executive Chairman, Scale Space: “I’d group the key challenges into three phases of the response to COVID-19, which are survive, adapt and restart.
“For many, job one was survival – managing cash flow, cutting costs, taking advantage of government support and opportunities to defer or reduce expenses.
“Then a challenge around what the business can continue to deliver and develop – both practically and financially. Remote working technology has enabled businesses to stay productive, but again, the challenge of finding the right tools and rolling them out takes time and effort. Many scale-ups already adopt agile and remote working models, so they were better placed to respond, but the pandemic has forced businesses to adapt to different ways of working.
“For many businesses, adapting how they sell, how they serve customers, how they manage their teams and their projects has been a real challenge.
“Finally, a challenge, but also an opportunity – especially for scale-ups has been around becoming focussed on solving customer problems, resetting the company and restarting with a new focus. Accepting that we are in a ‘new reality’ and focussing on the opportunities will be key for those who are going to make the most of the crisis. This may require adding new capabilities or raising new funding.”
What are the main challenges you’re facing now as a company that is considered high-growth/scale-up?
Adam Ludwin – Co-founder, Captify: “International expansion is a key part of our high-growth journey, but with so many restrictions on travel, we have been forced to put certain parts of that plan on hold until travel starts to reopen and we feel confident our staff can travel safely at all times. So, although international expansion is still a key part of our growth plan, it has taken a back seat as we focus on other areas right now.
“There is also this area of uncertainty over a second, or even third wave, which has led to a much leaner recruitment plan, only hiring the critical roles we need right now for instant growth, versus some other roles that wouldn’t contribute instantly, but would be more of an investment into future growth.
“This poses quite a problem as you become slightly less opportunistic as you do not know what’s around the corner, or how hard you as a business will be hit.”
Peter Rabey – Founder, X4 Group: “The threat of a second lockdown. As we never hire sales experienced people, their ability to work from home is extremely limited. What we would do on a second lockdown is under much debate currently.”
Do you think government has provided enough support for high-growth companies in the UK, during these last few months?
Mike Dias: “I would say that we can’t control that, and it shouldn’t be a focus for those looking to scale their company. If it comes, great. If not, we need to be focused on winning all games, one after another. If we can do that, we will succeed no matter what happens.”
Adam Ludwin: “Yes and no. I think there were much faster ways to help businesses that would have prevented many businesses from going bust and saving hundreds of thousands of jobs.
“For example, the furlough scheme is a great scheme, but when you compare it to other countries like France, where businesses could keep teams working at reduced hours and the government compensates them for the majority of hours they are not working, the UK scheme is not as effective. We were forced to furlough staff that for a period of time were completely detached from the business. This really had a negative impact, causing them to feel helpless, undervalued and detached.
“It was also tough for the company because it put more strain on the existing team to cover wider areas, which resulted in a slower bounce back.
“The Coronavirus Business Interruption Loan (CBIL) was a good scheme, but once again when you compare this to other countries like the equivalent PPP loan in the US, there is much better upside for US businesses whereby the loan from the government is in part, or fully forgiven, allowing business to come back into healthy profitability faster, versus the UK whereby we have an extremely vast and unhealthy amount of companies that are now (and many of them will be forever more) in debt to the government.
“Furthermore, due to the UK’s reliance on the banks there was a massive delay in that money being approved and making its way through to businesses that needed it the most.”
As a leader have you re-adjusted your growth projections or are you still confident of meeting previous targets?
Peter Rabey: “We will be hiring more people off the back of lockdown, but we will also be re-aligning our business. We know this financial year is a write off so it is all about getting going with decisions that will affect next year.
“As always with a business that has gone from three to 150 people, it is about making sure we retain a strong culture.”
Adam Ludwin: “Fortunately, despite the market downturns, we are still set for a considerable level of growth year on year. However, this is the first year we have had to settle for ‘good’ growth rather than ‘great’ growth. What this process has allowed us to do is stretch our teams and technology platforms to the max, leading to even greater efficiencies, which will certainly carry over into the future, allowing us to continue to grow more aggressively and even more efficiently.”
What is your advice to scale-up leaders on how they can continue to prosper?
Mike Dias: “Do not skip your dailies, weeklies, monthlies, quarterlies, and annual team rhythms. Scaling a company is all about nurturing a culture of execution across your team, having the right people on the right seats for each stage of growth, and being the best of the best in a niche. Your job as leader is to simplify. Every fool can make things complicated. This discipline is even more important when you are facing huge disruption such as a pandemic.”
What are your thoughts on the concept of ‘scale-up’ – do you think this will be reimaged going forward?
Juliet Rogan: “I think the concept and the challenges are more pertinent than ever, as companies will need support in navigating their environments. The scale-up challenges outlined by the ScaleUp Institute [SUI] are access to: finance, talent, leadership capacity, markets and infrastructure. These challenges remain the key areas of focus not only for scaling companies but companies looking to ‘survive and thrive’.”