Scale Space: 3 Top Tips to successfully scale your business
The number of scale companies in the UK grew by 23% to over 5,000 this year, with FinTech being a key growth driver, according to the Scale Up Index 2019.
Mark Sanders, Executive Chairman of Scale Space - the latest disruptor to the office space sector in White City for scaling tech companies – shares his top three tips on how to scale your business successfully.
Mark’s insight comes from leading the Fintech startup, TDX Group, scaling the business to a 400-strong team, across three continents, before selling it in 2014 to Equifax for £200m.
1. Develop an engaged and focussed team
Having a strong team around you is critical in the scaling phase. The FinTech companies that we have helped successfully scale have all recognised the need to invest in talent, while nurturing an environment where people are engaged, motivated and empowered to contribute. I believe balancing the need for some hierarchy, while adopting an agile methodology and encouraging role boundaries to be fluid, can have a really positive impact.
I always urge leaders to open their minds to hiring people smarter than them, as well as providing a framework to enable development. You want to breed a culture that taps into people’s talent, intellect and ability.
Leading TDX Group through the scale phase taught me that holding onto the culture and the values that you had when you were 20 people when you grow to be in the 100s, actually takes quite a lot of thinking about. As you grow, never stop asking yourself if the operating model is still effective.
This is also why it’s so important to invest in a team of people who value and care about the way the business works in the same way you do. In times of high change, you need an active team who will input into evolving the way you operate and can flex successfully around moving priorities.
2. Seek advice: you don’t have all the answers
From personal experience, I firmly believe in the importance of recognising and making time to seek advice from peers, mentors and advisors. It is really easy in a fast-growing business, where there is always something else that needs doing, to just focus on the task or to think you have all the answers.
What I have learned is there are people out there who have got the experience of doing what you are doing. Making time to connect with them for support or advice would have undoubtedly helped me to avoid some of the mistakes I made.
Enabling these connections to happen more easily is one of the main reasons we have created Scale Space. We appreciate the impact an eco-system of talent, knowledge and expertise all engineered to support growth can have during the scaling phase. Looking back, the opportunity to place my business in an environment that connects me with venture building experts, corporate innovation and top universities would have been very attractive when we were growing TDX Group.
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3. My 3 Ps: Purpose, product and profitability
We’ve heard a lot in the last decade on the importance of purpose. But there truly is a real benefit to having clarity and purpose when developing a business. Companies who know what they’re about and have clearly defined a product that genuinely solves a customer’s problem or creates value for customers is a huge driver of success.
And then something I think some scaling companies overlook, is being able to deliver repeatedly and profitably. I meet FinTech businesses that believe once they’re big enough they will become profitable. And that can often be true, but if you haven’t actually figured out the economics of your product and you can’t demonstrate your pathway to profit, it is dangerous to assume that scale is going to get you there. You need to understand your economics.
So my advice, find a way of memorably describing why your business exists, that your people find motivating – this is often best grounded in the problems you’re solving, rather than the product features. And make sure you properly take the time to understand how your business will perform financially over time as it grows.
About Mark Sanders
Mark Sanders is the Executive Chairman of Scale Space. Since 2007, Mark has worked within the UK’s leading digital venture builder Blenheim Chalcot, which has helped scale over 40 companies, including many in the FinTech sector, such as ClearScore, Salary Finance and OpenWrks.
About Scale Space
Scale Space is a new business innovation network from Blenheim Chalcot that supports growth through connecting companies with venture building experts, corporate innovation and top universities in a way never seen before.
Scale Space is set to open its first location as part of an innovative joint venture with Imperial College London on their White City Campus in Spring 2020.
For more information on all topics for FinTech, please take a look at the latest edition of FinTech magazine.
FIVE things fintechs must do to keep investors onboard
New investors flocked to the stock market during the COVID-19 pandemic. Thirty-eight percent of investors said they had never had a brokerage or similar account before opening one in 2020.
Low or no-fee trading options have helped accelerate the trend – nearly half of new investors said they accessed their account primarily through a mobile app. As FinTechs, how do we create the trust needed to keep new investors in the market and create a fruitful customer experience for them?
The financial industry does a disservice to individual investors if we merely offer tools that focus on making money quickly, an approach that usually backfires. Instead, the surge of interest presents an enormous opportunity for those who want to help more consumers use financial technology to educate them on responsible spending, saving, and investing in order to achieve financial wellness current fintech tools have welcomed individual investors in the door.
Now, it’s time to focus on education and improving their experience going forward. There are several ways those of us in fintech can step up to shape the future of retail investing so that it works better for everyone, starting with the following areas.
Equal access to financial wellness education
Financial health should be available to everyone — but today, not everyone has the educational resources to achieve it. One study shows that only 3.9% of students from low-income schools were required to take a personal finance class. What they aren’t learning in school or from family members, fintech companies can provide on their platforms.
The companies should move from solely offering financial services to a more responsible model of education, advice, and prescriptive choices to help consumers develop better habits and make wiser financial decisions. Not only can they empower consumers and bridge historical wealth divides, but they can also stimulate growth by opening up new consumer segments.
Just as we’ve come to expect that our fitness routines are tailored to our individual bodies, we’re also ready for finance tools that go beyond one-size-fits-all solutions. But only six percent of financial institutions say they’re using the kind of technology that allows them to deliver a deeply personalized experience. Fintech tools need to reflect that financial success looks different for each of us.
For one consumer, it may mean providing guidance on how to pay off student loans early; for another, it may mean prescriptive actions that enable them to stick to a budget for the first time; for a third, it could look like prioritizing environmental, social and governance (ESG) investments, so that her portfolio aligns with her political beliefs.
Now, we are seeing financial technology beginning to meet the demands of personalized finance in a substantial and meaningful way.
The rise of AI-Powered Advice
Big-picture advice and predictive guidance used to be a feature of high-end financial advisory firms — a perk only available to those who could afford it. But thanks to rapid advancements in data analytics and artificial intelligence (AI), that kind of holistic advice is now more accessible than ever. AI-driven robo-advisors can parse many different streams of financial information, delivering customized answers to key questions: Is it time to buy a home, or is it smarter to keep renting? Can I afford to take out another student loan?
Intelligent connectivity powered by AI can anticipate consumers’ needs and next steps, making proactive suggestions that guide them along the path to financial wellbeing. Fintech companies can also help consumers identify when their financial picture becomes too complex for a robo-advisor, and help them find a human financial advisor to meet their needs.
Focus on financial mental health
New investors are quickly finding that the market can be overwhelming. That’s not surprising, financial anxiety is common and studies show that financial stress can have an impact on mental health for some.
It’s not enough for fintech companies to give retail investors access; they also must provide the guidance and support that help consumers manage their financial well-being. Educational tools can ensure that consumers are well informed about their options.
Predictive analytics can anticipate consumers’ questions, serving them key information and insights before they ask. Features that emphasize a comprehensive notion of financial well-being, rather than short-term wins and losses, can also help ensure that consumers are keeping their eyes on the bigger picture.
Gamification for good
The surge of gamification apps has done an impressive job making investing as engaging as playing a video game or joining a social media platform.
Much of the current use of gamification emphasizes short-term thinking, but there’s also an opportunity to help consumers think more broadly about their overall financial picture. One example is peer benchmarking, a feature that enables help consumers to see how their financial habits compare to those of friends and fellow consumers.
Gamification can also be used to incentivize making smaller, smarter choices — for example, rewarding saving over making an impulse buy.
The future of fintech is about more than just broadening access to the markets. It’s about making sure more individuals have access to the tools that can help improve their financial well-being—in the ways that suit their own circumstances and needs. The potential to act within their own set of individual priorities, with their long-term financial wellness in mind is much more empowering to a consumer than simply relying on short-term, high-risk investments.