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THE KEY TO UNLOCKING GROWTH IN YOUR BUSINESS LIES IN ‘GO TO MARKET FIT’

Tae Hea Nahm is the cofounding MD of Storm Ventures, which invests in tech and SaaS start-ups all over the world. He’s the author of the book series Survival to Thrival: Building the Enterprise Startup, which provides B2B entrepreneurs with all they need to know to grow and then thrive. His latest title in the series, Change or Be Changed is out in April. Here he tells us the secrets to growth and the lesser addressed topic of how to manage it.

 

What business problem for entrepreneurs do your books address?

The first book was all about unlocking growth – the thing that every start-up wants to address. We came up with a concept which we believe is the missing link to unlock enterprise growth. It’s called ‘Go-To-Market Fit’. Many start-ups will know about finding ‘Product-Market-Fit’ (PMF). But even when they find PMF, they still often find it hard to transcend from survival mode to thrival mode. The bridge between these two modes is finding your unique ‘Go-to-Market-Fit’.

 

Tae Hea Nahm

The first book also helps founders anticipate their start-up journey from founding to $1 billion company.

Book two is about what happens after you’ve unlocked growth. Why is change so hard on the team, including the CEO? Our book looks at how the whole company from the team up to the board needs to change their roles as the company grows.

 

So why exactly is growth so hard on the team once it’s underway?

Finding the growth formula is hard to start with. Then once you have the growth formula (i.e. GTM Fit), the company must change its strategy, execution, organization and even its people to scale and succeed.

 

Here’s why: As the company grows, roles change. Yet there is little institutional knowledge passed down to help start-up leaders understand how their jobs change, and therefore how they must change themselves to succeed. Some of what makes people successful in the early stage ironically must be unlearned for the next stage. This theme ofunlearning’ is what I focus on in my second book. Unlearning is an invigorating and transformational experience, yet painful and turbulent for the team, the CEO and the board. Common company culture becomes more important during this stage and the thing which holds the team together.

 

Can you give an example of how growth can be hard on the team?

A classic example would be when the CEO hires the first “Grade-A” role such as a VP of Sales. Adding this is critical to company growth, but it can make a CEO and others uncomfortable. The VP will push everyone in the company—the CEO, the product team, the marketing team—to the next level. They may point out that early customer-acquisition processes that were the pride of the company were actually a one-off, unrepeatable sale, and will demand that the company develop a repeatable sales model (a playbook). Everyone realises that the old ways of making decisions and doing business will have to change. But the good news is discomfort is normal. Embrace it.

 

What sort of companies do you invest in and why the interest outside of Silicon Valley?

We invest in early stage B2B companies all over the world. Many VCs stick to the Bay area but we want to invest outside Silicon Valley, because i) you don’t have to be in Silicon Valley to access the best technology (Cloud, open source etc are available everywhere), and ii) Silicon Valley has a fundamental cost and retention disadvantage. Most importantly, we have seen huge success for our investments outside Silicon Valley.

 

What are the trends you are seeing in the tech SaaS arena?

Rewriting SaaS architecture to leverage AI. Traditional SaaS (like CRM) was architected for automating workflow and built on transactional data models (like Oracle). Companies have been trying to bolt on AI to SaaS. We believe that the application should first be built for AI and then add SaaS. AI is architected to predict behavior and is built on behavioral data models (like Google and Facebook).

 

 

Considering you invest in tech services for enterprises, does your company use super slick apps on a day to day basis – if so, which are the must-haves?

As a small tech office, we find that we must communicate with everyone everywhere. So we use WhatsApp for Europe, and Kakao for Korea, FaceTime for apple users, Google Hangouts for some video, zoom for basic video conferencing. We are constantly adding new communications apps

For our base deal workflow, we use copper as our CRM and Google Drive for document sharing.

 

Tae Hea Nahm’s first book The Company Journey can be found at the following link: https://www.amazon.co.uk/Survival-Thrival-Building-Enterprise-Startup/dp/1684014905

 

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Interviews

HOW NEW TECH START-UP IS SHAKING UP THE IT CONTRACT MARKET

Neil How, CEO and Co-founder, ten80

 

1. What is ten80?

ten80 enables cost savings on SAP/software projects by an average of 43%. We do this by switching companies to an on-demand workforce – think Uber and how that has disrupted the taxi industry.

The ten80 marketplace connects companies with around 47,000 verified contractors, using algorithms to match companies with the very best experts that then deliver on projects remotely. This enables SAP customers to utilise a global workforce and break free from geographical borders, as well as take advantage of international market rates. In other words, it gives them the exact resources, when they want them, for however long they need them for and at a cost-effective price.

 

2. How did the idea of ten80 come about?

I’ve been lucky enough to work with SAP my entire career. My journey first started at the end-user side. I ran my first SAP implementation project in my early twenties and went on to form an SAP Centre of Excellence to allow for long term improvement.

Over the next six years, I ran three other major change programmes before joining the consulting world, and for the next 10 years I worked with various consultancies running numerous projects in a wide variety of sectors, including retail, utilities, banking public sector and government.

But having spent time working both end-user side and consulting side, it became clear that SAP clients were struggling to access the best in class consultants and contractors. Wanting to get this knowledge into the wider world, ten80 was formed to digitally link the global contracting workforce to a global customer base, while allowing clients to digitally access the ‘best in world’ not the ‘best in organisation’.

 

3. ten80 is solving business problems, but how is it helping contractors?

Consistency of regular work is becoming a challenge for many contractors, and the impact of ‘dead time’ becoming more severe and likely. This is made worse through an ever increasing pool of expert contractors.

In addition, selling time for money is not a sustainable model for financial freedom, and contractors are tired of being capped at an ever decreasing day rate. Contracting also puts a huge pressure on family life, especially if you have to be on-site away from home — missing out on time with family and loved ones is a huge drawback, and there is little work life balance.

With ten80, contractors can benefit from the following:

  • An ‘always on’ demand for work
  • The ability to sell their knowledge and capabilities rather than a day of their time
  • Being able to carry out their role wherever in the world at any time, with total bulletproof security

 

4. What are the main challenges for your business?

ten80 is operating in a completely new area — outcomes-based delivery, so not being able to be ‘put’ us in a specific vendor box type is a challenge. Often corporate organisation’s procurement processes want to categorise us as a systems integrator or recruiter, but we are neither.

Being the first to market is always hard. We are offering some really powerful benefits to businesses and contractors, but we have no one to follow and are learning at every step of the way. There is a great saying that I have always believed in – “Success leaves footprints.” The big difference with ten80 is that we are making them! We are running agile processes on each stage of our journey. Everything is tested, iterated, refined, repeated. It’s the curse of being the first, but actually embedding continual improvement into our business has been one of our rocks of success.

Another challenge has also been controlling deal size. Big corporates have latched onto the benefits of what we are offering and are immediately referring us globally. It’s great but can quickly escalate and then take longer to close.

 

5. What’s next for ten80?

Our focus/goal is to secure a major investment over the next six months. That’s the first ticket to the major league and will give us the potential to grow to 150 people and some pretty big numbers revenue wise. We are entertaining some pretty important investment houses and are looking forward to one of them closing.

Running alongside that we have some really amazing companies in our pipeline, and I am looking forward to welcoming them onto our platform.

 

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Interviews

GOING FOR INVESTMENT IN CENTRAL EUROPE: START-UP LIFE OUTSIDE A TRADITIONAL TECH HUB

A Q&A with Bence Jendruszak, Co-founder and COO at SEON

 

  1. At what stage did you realise you were going to need an investor onboard?

During the early stages of the development (when completing our minimum viable product), we managed secure a Central European payment gateway in order to start using our system (free of charge). From this point on our product development was user feedback driven. It was at this stage, that we realised that our product has gained enough proof of concept, that we were ready to pitch the idea to investors.

 

  1. How important was the investment to getting your business to the current point?

Our pre-seed investment (50k EUR in January of 2017) was the initial kick-start to arriving to the current point. That micro-investment allowed myself and Tamas (Co-founder and CEO or SEON) to start working on the project full time and also to scale up the development team (from freelancers to full time programmers).

 

  1. How did you start the process of looking for an investor? 

We started by setting up our very first pitch deck. Of course, a lot of market analysis and USP shaping went into this. Once we had our first deck, we started contacting investors and started pitching the project to them. That specific pitch deck was very different to what the current version looks like.

 

  1. Were you aware of the challenges you could potentially face as a tech start-up in CE?

We were very well aware of the challenges. The European investment mentality is different than that of the US investment mentality, for example. Investors tend to be more conservative in the EU. Now imagine what the investment mentality may be like in the CE region. Nevertheless, we were also aware of the advantages of setting up a tech start-up in the CE region. The talent pool of

engineers and the cost of labour is by far the best in our home-turf – so the challenge was worthwhile.

 

  1. What was your journey to finding an investor like? Challenges / milestones?

Initially, we were faced with multiple unacceptable deals. The terms and conditions weren’t right for us in the long term. We were always aware that in order to build an international start-up (that would later develop into a scale-up), we had to on-board investors that we were fully comfortable to cooperate with – and vice versa. We needed to be on the same page and have a shared vision for SEON’s future.

 

  1. How did you find your lead investor, Portfolion? What else do they offer in addition to financial investment? (international network etc.)

We met them by introduction from an acquaintance. Portfolion is a well renowned VC in the CE region. They seemed like a partner that we could on-board into our boat and we could steer the ship together with them. They are the subsidiary of OTP Bank, one of the largest banks in the CE region. A potential gateway to partnering with a major bank seemed like a mutually beneficial setup. Aside from receiving a financial investment from the fintech fund of Portfolion, we can happily say that we are providing our fraud prevention services to OTP Bank as of today.

 

  1. What have you learned about the investor landscape in CE?

We found out that European investors are even more sceptical when it comes to CEE countries. They tend to avoid start-ups that aren’t located in hubs like Berlin or London. For them, Hungary is still seen as a former Eastern bloc country playing catch up with the rest of Europe in terms of living standards and infrastructure.

That said, there are a lot of investors in the region, but you really have to focus on getting in touch with the right organization. Onboarding an investor is a long-term partnership, there has to be a fundamental alignment in terms of the vision and mission of the two teams. We believe that we’ve managed to partner with investors who share the same vision and mission as us (up to date).

 

  1. What role will investment play in the next growth stage of the SEON?

 The next growth stage is focused on international expansion. We will be seeking an investor that can provide not only funds, but also somebody that has a solid portfolio of fintech companies and a partner network of financial institutions.

 

  1. Do you have any advice for other businesses in your position that are looking for funding in the CE region?

Do not rush into any deal that is in front of you, time is on your side. If you are in an early stage, make sure to approach as many investors as possible, in order to be able benchmark each opportunity.

 

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