02 Aug StressFactor™: Helping Tech Scaleup Companies grow
Take the Risk Out of Your Tech Scaleup Growth
Scaleup companies face many challenges, one of the biggest is growing the teams to match demand. To achieve this companies need to ensure they have a great “employer brand” to attract key people, any bad news out there gets around. So is your Company ready to scale? Bringing in new people when handled or onboarded badly will lead to high churn and bad publicity!
Companies use the APeopleBusiness digital toolset StressFactor™ to undertake an in-depth assessment of their readiness. The tool will highlight areas of core strength as well as areas that carry risk and need some form of attention. A swift process that will provide a route map for ensuring the company becomes a “go to” place to work.
Our personality profiling and business performance mapping software, combined with APB’s considerable experience as a trusted business consultancy allows you to:
Assess the key areas of risk and implement change in readiness for growth
Demonstrate a business led productivity focus whilst building trust with the people
Demonstrate a humane way of listening to peoples real issues and show you care
Let staff do the selling when onboarding new people
Be able to demonstrate a proactive approach to mental health
Be able to check in along the growth curve to see if the enlarged team is functioning at its optimum potential
Continue growing your business by monitoring employee dynamics and identifying & defusing potential workforce issues
Give CEO’s and C-suite executives a dashboard overview of their company’s workforce performance and mental wellbeing
What is a Scaleup company?
A Scaleup is the name given to a rapidly growing start-up that has achieved measurable success and can demonstrate a viable business model. Scaleup companies can be from any industry sector, but they are synonymous with the tech sector. Almost all multinational tech companies that are now household names went through the Scaleup phase.
The OECD defines a high growth firm as:
“All enterprises up to five years old with average annualized growth greater than 20% per annum over a three-year period, and with ten or more employees at the beginning of the observation period ”
The path from a Start-up to a Scaleup
When a company starts, its first few years are hectic and intense as the founding entrepreneurs develop the product they’ve created to fill the market niche they’ve identified. Their hopes and dreams are to develop their idea and passion into a viable business and make their mark on the world.
During the early days the entrepreneurs and their small team are a close-knit group of people who know each other intimately, and live, breathe and work towards the same goal – making the business a success. The initial team is usually small, flexible, able to quickly learn new skills and take on different roles, to overcome the numerous challenges of being a Start-up.
To succeed they must be dedicated, ambitious, focussed and have a fair share of luck.
Time to make the leap and grow the business
In time some start-ups reach a point where there’s a viable business that’s generating solid sales and gaining traction. It’s not uncommon for these new companies to grow fast, typically 10 – 20% month on month. This rapid growth is very common in the tech sector, especially in the red-hot Fintech, Cyber and Applied AI fields.
But rapid success can also create huge problems such as servicing increased demand, which requires solid infrastructures including technology backend, sales and marketing, and customer support. Start-ups often need to move to larger premises to accommodate newly hired employees. Failure to hire enough of the right people can lead to a competitor jumping into their newly created market. The worst scenario is loss of market share, momentum, and potentially even loss of the entire business.
Sustaining continued growth of a Start-up requires significant financing, and there’s a point when the revenues generated by an expanding start-up are insufficient to fund these new costs. Start-ups can quicky use up their seed capital, savings, personal loans and friends and family’s goodwill. At this point, the only way forward is to raise funding from outside the business.
Death Valley Curve
The ‘Death Valley Curve’ is a business term used to describe a dangerous growth phase in a start-up company’s journey to profitability when the initial seed funding runs out, and there is not enough income generated from sales to cover growth costs.
Investment for Scaleup companies
For Scaleups in the tech world there are two main types of investors: Angel investors and Venture Capitalists (VC). There are other ways of raising finances, for example going to a bank. But this isn’t a route many new companies take as banks view Scaleups as a risky business proposition. Because they don’t have a track record or fixed assets to secure a loan they are unlikely to receive a bank loan.
Angels & VC’s give Startups not just a large cash injection, but also mentoring from seasoned pros who’ve been there before and know the pitfalls and challenges that lie ahead. They are willing to take a risk in return for an equity stake because they see the potential for significant returns on their investment (ROI). These investors know that if they invest in several promising Start-ups, one of them might become a unicorn – a privately owned company with a valuation of over $1 billion.
Funding 101: ‘People buy People’
To secure funding Scaleups must demonstrate the viability of their business model, existing sales and client base, as well as realistic growth and sales projections. Investors know that Scaleups have a high chance of failure and it is the drive, ambition and personalities of the entrepreneurs and their team that either makes or breaks a business. Some of the World’s biggest companies became successful because an investor saw an intangible quality in an entrepreneur which sparked confidence and pushed the decision to invest from ‘No’ to ‘Yes!’.
Pitching for funding is always a difficult proposition. Scaleups need to cover all bases to counter any objections that could cause rejection or dilution of their equity stake. Wouldn’t it be great if there was a way for Scaleups to enhance their pitch deck presentation with a document that quantifiably demonstrates their teams’ personalities? It could reassure any lingering doubts about the capabilities of their people and bring a compelling argument to the negotiating table.
Fortunately, there is a way. It’s called StressFactor™ by APeopleBusiness.
How APB’s StressFactor™ helps Scaleups grow:
StressFactor™ is an easy-to-use evaluation tool that profiles the personality types within an organisation. It generates detailed visual heat maps showing group dynamics that are easy to understand. And as it comes from an independent consultancy there can be no question of bias.
StressFactor™ was developed to answer the specific challenges faced by Scaleups by APeopleBusiness founder Paul Finch. As a serial entrepreneur with extensive experience as a CEO and at board level, he has been instrumental in growing and turning around several tech businesses.
In each business one of the challenges that Paul Finch faced was to understand and measure ‘the people’ aspect of the business. For other areas such as finances, there are proven technologies in place that provide a dashboard overview. But for workforce dynamics no such tool existed. He resolved to fix this by creating a unique, bespoke solution. After working with psychologists and leading experts in behavioural science for two years, StressFactor™ was born. It is now used by Fortune 500 companies and large international organisations including CERN .
If you are in a Scaleup company, you should consider contacting APB to discuss the benefits of StressFactor™ in helping you secure your next round of funding.
APB sees StressFactor™ as a key metric for VCs and PEs to evaluate potential companies that they might invest in. We see StressFactor™ as an integral part of the business negotiation process to establish Scaleup credibility for both buyers and sellers.
StressFactor™ keeps helping your business grow once you’ve secured funding
Going forward, when you’ve secured your next round of funding and started hiring new employees, StressFactor™ is your natural tool of choice to evaluate new candidates during interviews; it can help you determine if a candidate is suited to a role or not.
StressFactor™ will also smooth the onboarding process for new employees by providing HR with metrics to determine if a candidate is likely to work well within a specific team.
Finally, StressFactor™ gives CEOs and C-suite executives a dashboard overview of their company’s workforce performance and employee wellbeing. With it, they can monitor employee dynamics and identify & defuse potential workforce issues before they become an issue that needs to be dealt with by CEO’s.
To discuss how we can help your tech Scaleup get an edge on your funding negotiations or select and onboard new employees by using StressFactor™, please contact us.