Over coffee last week, my colleague Akshat asked Gray Ghost Ventures’ CEO Arun Gore what three things he considered most important for startups to scale. Arun would know: as Director of Operations and then CFO at what would become T-Mobile, he helped scale that company (then VoiceStream) from 35 employees to 30,000 employees in seven years. Arun’s three most critical determinants of scale:
When a company gets its first round of funding or its first taste of good press, the temptation to dilute focus can be overwhelming. Arun gave one example of a US-based company with one year of experience operating in India, a company which was planning to expansion into the Philippines. This, Arun advised the young company, was a mistake: having only begun to learn the Indian market, the company would lose focus by splitting its time between India and another country. For a company to scale, says Arun, it needs to be as focused as wildebeests after water.
“A CEO,” said Arun, “Doesn’t manage a company. A CEO manages people that manage a company.” It’s not uncommon for entrepreneurs to struggle with letting go of any aspect of their company–be it marketing or operations or fundraising–but until she learns how, the company will not grow. Secondly, a great entrepreneur collects the people. She comes to an investor with an armful of people eager to come on board as soon as the company secures funding. She will also have a demonstrated capacity to wrangle with the big personalities necessary to grow a company, quickly.
An entrepreneur can build focus and management ability with time and discipline. But timing, says Arun, is a gift. The best entrepreneurs know that right now is when an idea’s time has come and that this is the product that people don’t even know they want yet. The difference between good and bad timing is that of swimming down and upstream (or perhaps like being in the way of a wildebeest stampede?).
Thanks to Arun for the time and the tips.