How to grow your business and scale up
How do you grow a business? Not an easy question to answer as there are so many elements for start-ups to consider, but taking on board advice from those that have been there and done it would be great start.
As part of the Investing in Success forum on 7th March, we heard inspirational stories and practical advice. Blake Morgan Legal Director Tim Coles chatted with successful entrepreneurs Laurence Pearce and Vivek Madlani about how to grow your business.
They spoke about a number of areas, including:
- Attracting funding
- The regulated market
- How business culture can drive success
- Timing and recruitment
- How non-executive directors (non-execs) can help
The speakers and their journey
Laurence is the founder and CEO of Lifelight, who have a vision to turn every smart device into personal healthcare monitors. Lifelight allows users to take accurate blood pressure, pulse and breathing rate readings just by looking at the screen of a smart phone or tablet.
Laurence cited cardiovascular disease as being the world’s leading causes of death. He commented: “Problematically there are over 1.3 billion people with high blood pressure, or hypertension, but 46% of those don’t know that they have hypertension. These people don’t have access to blood pressure cuffs. Even in the UK there is a similar ratio. Our primary mission right now is to find those missing people that are unaware that they have hypertension. To avoid all of those issues that can happen in the next five to seven years, like strokes, heart attacks, etc..
“The journey to get here has been a tough one. Seven to eight years’ work to build the technology from that ‘eureka’ moment, thinking, wow this looks really exciting.”
Vivek is the co-founder and CEO of Multiply AI. Multiply’s product gives financial institutions the ability to provide digital, or hybrid, advice to all of their customers.
Vivek remarked: “In our very early days we were providing advice in our own name, had an iOS and Android app that people could receive advice from us. The plans that we were generating, and still generate today, cover up to 11 different financial planning areas. Everything from paying off high interest debt and selling emergency funds, starting to invest, saving towards retirement, life protection and so on.”
From 2022 onwards, Multiply have shifted their focus away from serving customers directly to licencing the software to financial institutions, such as advice firms, life companies, asset managers and banks. “They essentially embed our software and customer journeys into their apps and their websites to provide financial advice to their customers,” explained Vivek who wants people’s finances to be a source of pride rather than anxiety.
Attracting investment
To start with, Lifelight obtained grants, including from Innovate UK and the National Institute for Health and Care Research (NIHR), with Laurence also doing consultancy work to help fund the journey. Both stressed the importance of de-risking any potential issues. Laurence stated:
Once you are beginning to de-risk the tech, then investors become increasingly interested.
“The VCs (venture capitalists) will look for you to de-risk as much of the technology as possible and then it becomes a commercial risk so it is about product/market fit.”
Vivek reiterated: “At the beginning there were quite a few leaps of faith that investors needed to make in order to believe in both our product and our place in the market. What we did in the very early days was really focus on which points to de-risk. We focused on which of those leaps of faith we thought we needed to de-risk in the shortest period of time.”
Timing was a key aspect in attracting investment, along with being able to prove you can do what you aiming to do.
“For that early stage seed money you’ve got to demonstrate that the technology can actually work,” said Laurence. “It is also a learning process to understand the right sort of investors to talk to as you can waste a lot of time talking to later stage investors too early.
“It is a really complex Venn diagram of finding the right people at the right moment in your journey who happen to have funds available.”
Vivek spoke about two optimal times to seek investment. Before the product was launched, he was talking to investors “lighting fires” and encouraging them to take leaps of faith. Down the line, Multiply now have “fantastic metrics to point to, which investors can get excited about.” This is the other time to earn investment, when you can prove growth and show an upward trajectory.
Be prepared for a long and bumpy regulatory ride, with an upside
“For anyone looking at a start-up in a regulated market, you’ve got to really be prepared for the worst,” warned Laurence. “Don’t underestimate how long and how expensive it can be. It is kind of out of your control due to the amount of process, as you are relying on regulators to audit your processes, audit your claims, audit your product.
“It’s all about intended use so you have got to be super clear, which conflicts with start-up culture where you’re moving fast and breaking things, you can’t really do that in medtech. You have to be agile but in a regulated and documented way.”
This process also proved to be a blessing for Lifelight as the continued documentation and looking out for potential issues meant confidence and trust in the product and processes. Having a quality management system and auditing gave the company traceability and ensured that they tested and de-risked the product.
Vivek also had advice for start-ups in a regulated market and again stated the importance of de-risking. “We had a motto going into it that we would always take it more seriously than the regulator would themselves, which meant that we would do a lot of homework, making sure we were on top of everything that was going on.
“We’ve spent a lot of time building systems that help with testing the boundary conditions of our advice. We had five pillars of governance and risk. It allowed us to be a lot more confident about our product. Having been through that process, we de-risked our company as a result of doing that.”
Laurence added: “There is an upside to it, it might seem daunting but there are benefits.”
To what extent do you think your success has been driven by culture?
Rigour was another reoccurring theme along with de-risking. Having a culture of rigour, integrity and transparency has helped Laurence and his team. “Culture is a massive thing for us,” he said. “Our approach of taking rigour, working through clinical data, using that to build evidence. Using AI but adopting it in this explainable way where we can prove the physiology.
“We do have a tight culture around the integrity.”
Transparency was another part of the culture at Lifelight. “We have our IP protections in place but we’re open to publications and explaining how we do things for reassurance because this is new stuff. Clinicians are naturally wary of big changes and things that might bring risk.”
Vivek also stressed the importance of culture at Multiply and ensuring that it is part of recruitment. “When we’ve got culture right and embedded those aspects of our culture into our hiring process, I think it has been enormously beneficial for the company.
“Culture is how people behave when you’re not in the room. You don’t have to micro manage. In our company, people are ambitious, they’ve got high integrity.
We default to action.
Stated Vivek, who added: “One of the most helpful things we, as leaders in the company did, was go through an exercise early on of what we wanted to see in the company and what we stood for.”
Getting recruitment right
For prospective founders and owner managers of start-ups, one of the things for hiring is finding people at the right stage is important because you are on a journey.
“Your first few hires have to be real risk takers to join something where there is no real certainty,” said Laurence. “As you grow, you need to have people who are going to support the journey for the next step. It’s getting people with the right set of skills for the stage you are at.”
He highlighted the fact that Lifelight have learned to be more rigorous about designing roles and did give advice for start-ups. “The danger with a start-up is that you can approach it like a heist movie, where you hire all the people you know in your network. What you need to do is design the roles, then create the seats. Then you go and look for the best people to fill those seats.”
For Vivek, he needed his team to wear many different hats and show versatility at the beginning. “We hired people who were not only good at handling that uncertainty but also thrived in it and were excited by it.”
How beneficial are non-execs?
Both founders praised non-execs. Laurence hired a non-exec chair early on as he wanted someone who would fit the culture of the company and had the right experience rather than having a chair imposed by VCs.
“We had a much more organsied board with better governance,” he said. “It helped me as a founder and this will be relevant for other founders. As a founder you have different hats – the owner/ investor and the CEO who is doing the doing. On the board I would be beating myself up. Having a non-exec chair and bringing in other non-execs, can help you to separate your two hats.”
Non-execs can also provide a laser focus, which is needed as a start-up. “You can really get pulled in different directions,” warned Laurence. “Before you know it you have lost that focus as you are building different solutions for different customers.
Do one thing, execute it really well, prove that to the market you can do it, then expand and add other things later.
Vivek added: “We appointed our chair person about four and half years ago on the back of a VC round. We ran a search to get someone in and they have been absolutely fantastic in terms of specific areas like fundraising.”
It wasn’t just fundraising where the non-exec has proved highly beneficial to Multiply but in an overall strategic view. They can challenge certain decisions so that the company isn’t just being run in an “echo chamber”. Their chair person also has experience from companies that are five to 10 years further along in their journey so is more aware of the challenges to come for Multiply. “That’s really helpful for us to stay five steps ahead,” remarked Vivek.
What would you do differently?
“I would have really pushed to get some external investors in earlier,” said Laurence. “In hindsight, it brings a rigour and that kind of independent view to the business.”
Vivek would have been more focused on certain parts of the product. He said: “We spread ourselves too thinly at certain points.”
However, it was clear that both companies were proving to be very successful and it was a pleasure to hear from them on our webinar, which you can listen again to here.
Investing in Success
This webinar was part of the Investing in Success business forum, which is run by Blake Morgan and dedicated to helping you and your business succeed. To ensure that you do not miss out on invitations and insights, you can sign up to the Investing in Success mailings list here.
Tags: Investing in Success
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