Roland Siebelink reveals how startups can become scaleups

Roland Siebelink reveals how startups can become scaleups
Roland Siebelink. Photo: Supplied

Roland Siebelink is an expert in helping startup companies to maintain their energy while they grow – in other words, as they scale up. He has a successful background in startups, having founded 3 companies in Europe – one of which was acquired by Tagged.

He has also created a quiz, FastAtScale (available on his website www.rolandsiebelink.com for free) that helps businesses see how well set up they are to scale their operations.

Roland is an expert in helping startups to become scaleups, and publishes regular articles about the challenges faced by new businesses as they try to achieve as much growth as possible. His goal is to help the CEO’s of new businesses to be successful, as often it can be difficult to turn a good idea into a sustainable company.

Roland, can you explain a bit about the difference between a startup and a scaleup?

The key difference is that a true startup is still looking to find traction for a product in a market. A scaleup has already found that initial traction and is trying to replicate and grow it.

The technical term for this inflection point is product-market-fit. A true startup is still seeking product-market-fit. A scaleup has already found product-market-fit, and should now have its eyes on product-market-dominance.

This means that a true startup is in exploration mode, whereas a true scaleup is in exploitation mode.

Almost all Silicon Valley management advice focuses on that exploration mode: Learn-Build-Measure, customer development, frequent pivoting, new product development.

Scaleup leaders have typically found themselves in an comfortable split between sticking with their startup DNA and applying big company practices. It has only been very recent that we have started to recognize scaleups as a different breed of company, in need for its own best practices and its own management advice.

Could you tell us a bit more about your background in startups and scaleups?

I have been very lucky in living through a rapid scaleup journeys in three successive companies. Every time I joined a team of less than 10, that would grow to over a 1000 in just 3-4 years.

In the 1990s I rolled out the first consumer broadband Internet in Europe for Telenet. The product grew 900% year after year and is still market leader today. In the 2000s I helped Bluewin launch VOIP and Triple Play and in the 2010s I launched platform offerings for Rocket Fuel, a pioneering in applying AI to digital marketing.

But whatever official hat I was wearing, I always found myself advising the founder/CEO on how to scale the company while keeping the entrepreneurial zeal alive. I found first hand how many scaleups find themselves in constant conflict between wanting to be a startup and wanting to be a corporation. Over the years this helped me see how scaleups are really a company type of their own.

Just about everyone lives this journey only once; I am probably the only person in the world that has gone through three in succession. Not just as an investor, board member or adviser, but as a true insider, working closely with each CEO. That means I have seen the movie and I can predict what happens next. First-time scaleup founders—and frankly that is all of them—find this immensely valuable.

Why do so many new businesses fail to keep their energy as they grow?

The #1 reason that a startup has any chance at all of competing with big incumbents, is their lack of baggage and complexity. When you have no historical customer base to protect, no legacy processes to change, no established channels to offend, no long-time employees to keep happy, it is relatively easy to chart the way forward and launch an innovative product. This becomes much harder as a startup scales, and starts building its own customer base, processes, channels and long-time employees.

On top of that, the initial product-market-success often makes founders overconfident. Being entrepreneurs and product people, they are eager to launch new product lines or business lines in the name of growth. This creates additional complexity, confusion, friction before their first “hit” has truly entrenched itself in the marketplace. It saps the very source of competitive advantage that the startup once had, and soon the company has to contend with disappointing results.

Since people join startups because of the huge growth potential, any sign that that potential is slowing down will cause severe demotivation in the ranks and make it harder to recruit new people.

This is why I always stress to founders that their most important job is to focus their strengths and keep up momentum. It is much easier to keep up energy as the company entrenches itself deeper and deeper as the preferred solution in one product-market-niche. It is much easier to waste energy by trying to manage toeholds in several markets without fully occupying at least one.

What exactly do you help your clients with?

My key role is to help the management team of a scaleup maintain momentum. I do this primarily by facilitating the quarterly planning sessions, infusing and teaching scaleup best practices in the planning work they are doing anyway.

I help the team move beyond the perspective of individual functions and departments, creating a new focus on the cross-functional drivers of value and performance. How to engage your people better, how to create strategic focus, how to execute reliably and how to optimize cash and flow for maximum growth and valuation. I find most workshops create 2-3 real breakthroughs for the team, clarifying blind spots that were blocking their progress and creating a bout of new energy and focus to start a new quarter.

Next to the quarterly planning sessions, I will typically talk to the CEO once a week, some of it followup, some of it holding accountable, some of it coaching. In some cases I also provide monthly deep dives for a broader management team on topics of interest or a particular problem that needs solving.

Finally, every package comes with software and worksheets to stay on top of the goals the teams set themselves, and integrate followup into their every day work. This way we avoid the typical workshop syndrome of exciting conclusions deflating as soon as the confront the next workday Monday morning.

How does your FastAtScale quiz help businesses to improve their scalability?

The FastAtScale quiz helps scaleup businesses get a quick grasp of the functional and cross-functional areas that they are very strong at, and of those that may have been a bit of a bland spot for the team.

It covers the eleven dimensions that we think drive a truly successful scaleup: four functional “engines”, four cross-functional performance  levers, three leadership competences.

The quiz comes in the form of statements that, overall, respondents can say apply to their business or do not yet apply. This makes the quiz easy to take. Most respondents can get an initial score in less than fifteen minutes.

For scaleup executives who want to get a better understanding of their score 1-1, we offer scheduled calls with an experienced scaleup coach.

What are the most common problems that you help new companies with?

A typical case is a scaleup that has just struck a goldmine and is scrambling in all areas to cope with the demand. Demand of the market, but also of investors, potential partners, potential hires etc. For these lucky companies, we help the team increase hiring and delegation momentum so that the founders and executives can keep more of their own time free. We also improve execution reliability and optimize flows and cash for rapid valuation increase.

Another common case is a scaleup that had growth momentum but has hit a plateau. Growth is slowing down and they are not sure what to do about it. Some executives may even be panicking in quiet desperation. For these companies, we help the team focus efforts on their true sources of differentiation, focus execution on fewer but more impactful priorities and help liberate cash from inefficient flows to improve the runway.

Sometimes we work with companies that have lost momentum a while ago and haven’t made changes in time. Time is running out rapidly and they need a quick turnaround to rebuild investor and creditor confidence. For these companies, using the crisis for rapid liberation of cash and refocus on essentials is paramount. After we have stopped the bleeding, we help them reposition themselves in the marketplace with a higher chance of future success.

And finally, every now and then we take on true early-stage startup founders pro bono or on an advisory basis. This is to stay in touch with the spirit of early stage founders and to pre invest in early stage companies that have high potential to become scaleups themselves in not too distant a future.

Are there any factors that might make it impossible for a new business to succeed?

First of all, I think all depends on your definition of “succeeding”. For venture capital investors, any venture that does not return at least 10X the amount invested will be considered a failure. Not all of us need to maintain such a high standard of success, however; there are many businesses that may not grow into a Google or a Facebook and still return money to investors after producing positive cash flow on a steady basis.

Having said that, total failure is almost guaranteed if founders show no willingness to learn—from circumstance, from their team, from books, from a coach. Contrary to popular belief, a startup is not guaranteed success after it has found product-market-fit. Scaling is a perilous journey in its own right, and the most difficult aspect is that what made founders successful in one phase is almost the opposite of what made them successful in the next phase. Time and time again. You need founders with a strong sense of self confidence and self awareness to be open for feedback and show constant willingness to change.

All other factors are generally manageable if caught and dealt with in time. This is why it is important to keep an open atmosphere where all problems can be discussed, and a truth-seeking culture in which rank does not trump insight. Part of growing up as a scaleup is to mix some truth serum into the Kool-Aid. Once a business is able to do that and team members are able to trust their peers to be right more at least as often as they are, there is almost nothing that can force a business to fail.