Reaching global audiences is a focus for most SMBs, but how can you tackle the challenges of scaling?
Rare Birds Founder and CEO Jo Burston describes what needs to happen to make scaling possible.
First, she says, you need to define why you want to scale – considering what scaling means from a build and impact perspective – and then how to go about it.
“We know that technology and the number of people we have within the organisation is scalable, but how do we apply our resources and the capabilities in a combination that creates the ‘how’? That is the secret sauce ingredient to entrepreneurship,” says Jo Burston.
She has successfully scaled three businesses, with her largest business Job Capital, forecast to turn over $40 million this year. She says to determine the size and impact of scaling you need to strategise and implement actions that enable it to happen.
“If I was starting my first business and I wanted to scale, I might think that scaling means reaching seven capital cities in Australia. But now, 10 years later, scaling for me is, ‘I want to be able to reach everyone on the planet who has the internet’.”
How to get started
One way to go about reaching “everyone on the planet” is to first test all your ideas about how to scale before building anything. Consider how time, costs and your resources impact these experiments.
“I put about six to eight months of thinking into how to do it… I anticipate five different ways of scaling a business and then look at it from a technology perspective first, a financial cost perspective second, a human capital and resources perspective third, and then an impact perspective fourth,” she says.
“If all those things line up for me and they all look like green lights, and I’m capable of resourcing those four areas, then scalability will occur.”
If one of those four things is missing though, it’s unlikely that scaling will be successful.
Getting the technology right
Jo Burston says she managed to scale Job Capital – an essentially bricks and mortar business – by automating parts of it. “I could see straight away that by removing the friction or removing the points of contact where a human could be replaced by an automated piece of technology that I would be able to scale the business much faster.”
With Big Data, a business she launched in 2013, she scaled it by building a platform for an entire contingent workforce. “It was a really complicated piece of work. We mapped out the process for the customer, the company and the candidate.”
She looked at who the customer was, what the product needed to be and how she could multiply the effect of that. She also considered how many sets of hands and decisions were being made during this long and difficult process.
It took a year to map out a technology-enabled, scalable product. Then the team started building the technology incrementally, testing if each piece worked before proceeding to the next piece. They also recruited a volunteer customer to test the platform for time-efficiency and the user interface.
“It was a long piece of planning and processing, and we didn’t actually build anything until we could see that it was scalable – until we had the resources; the human talent to help it happen, and the time that was required to do that.”
She says entrepreneurs often see scaling as a fast move. “For me, it has always been a slow, measured, carefully thought through strategic plan. It’s a big investment, so you’ve got to make it work and be prepared in that journey to iterate and pivot without a lot of cost or time being lost.”
Justifying the costs
If you’re struggling to justify the cost of developing a platform that costs, say $50,000, it helps to weigh it up against the cost of hiring someone for a year for the same amount of money.
“If I bought myself a $50,000 diamond ring in one year everyone would look at that and go, ‘that’s unbelievable, how can you afford that?’ But I was putting $50,000 people in my business without having the same ‘wow’ factor. So, I thought, ‘why don’t I replace this $50,000 of person, who is only able to deliver for one year and convert that into $50,000 worth of technology, which can deliver for me year-on-year and it’s repeatable, and scaleable?’”
She then worked out how to do that many times over, so it was hundreds of thousands of dollars worth of investment, “however, I knew the long term, scalable returns would also return to me, and they did.”
Technology is also depreciable and has research and development benefits. “When I pay an employee at that level, I’ve still got to pay tax and on costs, so add another 20 per cent for turning the lights on, so to speak. Whereas, with technology there are attributes that not only progress the business faster, but there are incentives, from a tax perspective, to do it as well.”
Sharing the vision
As the company expands, Jo Burston says you need to be clear about the vision, because it’s the businesses’ guiding rudder when things go wrong. She recommends sharing the vision openly with your employees, so they can decide for themselves if they can cope with the pressure. She typically shows her team the goals and workload for the next 12 to 18 months, “setting the vision for that growth pain before it happens”.
“People thrived in that environment or they didn’t. They would often leave, because it was just too challenging for them to be stretched and to be that uncomfortable.”
Those who embraced it grew as the company scaled. “They just did incredible stuff, because they didn’t know they could even do it,” she says.
“When you look back in 12 months’ time and really actually measure their success, and not in a numerical way, but what their behaviours were and what they learnt in the process… that’s got a really incredible ripple effect in a person. If they achieve something and they’re acknowledged for it, then they’re going to try to do a little bit better next time until all of a sudden they get to a point where they look at themselves and go, ‘oh my god, I’ve changed. Look how I’ve grown’.
She says employees also have a responsibility to understand the vision, because fast growth companies need people who can get in the door, reach benchmark and keep up with the pace of growth. “Individuals have a responsibility to ask themselves, ‘how am I going to stay relevant in an organisation that’s moving faster than I am at the moment?’”