The second edition of our Start-Up Series opens with an article from Aneesh Varma, founder and CEO of Aire, who provides an insight into how to successfully build a start-up that is here to stay for the long-term, and the steps founders need to take survive.
The most ambitious building projects take time. Solid foundations, the right workforce, the correct supporters and advocates. The same is true for any start-up.
And with big ambition comes the need to think long-term. Whatever your business, when you exist to enact real change, a quick-win, short-term approach can’t work. Why? Because you’re not just delivering an innovative new product, you’re building a whole new approach: one that requires you to challenge human behaviour to influence an ecosystem.
But how do you build a start-up for the long-term?
As a founder, don’t forget to reflect on your job title. You are called that literally because you are there to build the foundations: the people, the methods and the infrastructure that you believe will power the engine of your business to deliver that change.
This requires a decisive approach from day one, which in turn helps you make the necessary trade-offs as you grow. At Aire, for example, we exist to make credit equitable for everyone: free from bias and free from prejudice. We’re resolute about doing that the right way, however long it takes. Being focused on our end goal informs my approach, and those of my team around me, in every decision we make.
Invest early in culture and values
Often overlooked in the early days when the need to hire is pressing, culture and values are critical to building for the long-term. You can’t retrofit them when the business gets past a certain size, so invest in this early.
Done well, company values become a kind of internal code; a shared language that helps everyone prioritise their work and make the right choices.
This is important, because as your company grows the majority of decision making moves downstream, away from the founding team. Every day, employees are making thousands of micro-decisions that impact the future of the business. Everything – from the code written, to language on the website, to the marketing materials – is impacted.
Clear culture and values empower employees to make these decisions with autonomy, guided by the early ideologies of the business that you set from the start.
When it comes to talent, look for the missionaries
Potential hires can be divided into missionaries and mercenaries. There is nothing wrong with mercenaries: they might have exactly the skills you need for a short-term project reliant on fast delivery.
But for the long term start-up, you need to attract the people most inspired by the vision – the people who build the boat because they are motivated by the story of what it will be like on the open seas, and of finding undiscovered continents. Their shared values and vision are what help you withstand the unexpected, together and with resilience – a key attribute for any start-up employee.
The 50-staff checkpoint
Be mindful of the dilution point. Under 50, and that feeling of a united team is relatively easy to keep alive. But after that, the importance of taking even clearer steps to internal cohesion and the keeping alive of that shared purpose is crucial. Constant communication is vital in creating an aligned team which can continue to attract top talent.
Engagement with investors and regulators
Your long-term goal will also influence how you approach investors. Founder clarity is absolutely vital. You must be singular in your approach: ‘it’s important that you know we’re planning to do this’. That might scare off some investors, but it’s a price worth paying for making sure they are the right people for you to do business with.
The same goes for partnerships and regulation. Some start-ups try to avoid the need to be regulated, but at Aire, we’ve always actively engaged with the regulators, seeking guidance and engagement. That has taken time and wouldn’t have been feasible if the company had been focused on the short-term.
So, you need clarity of vision and message across three concentric circles. In the first – internal – you need alignment of your people. In the second – external – you need to be very clear with stakeholders like investors to ensure enough alignment there too.
And in the outer one – the public, the media and your early advocates – you need a set of values, a culture and a vision that let you answer with confidence the question of why you exist.
Learn to adapt and survive
This doesn’t mean just being stubborn or blinkered when unforeseen opportunities and issues arise. For example, COVID-19 accelerated our plans to provide a customer management product to help lenders better understand existing borrowers’ changing financial situations.
While this is now an important way of helping lenders support customers and meet regulatory requirements, we haven’t lost sight of our big vision – which is to give equitable access to credit, even for those without conventional borrowing histories.
There is one thing for certain: you won’t build something that transforms a sector if you don’t have that goal. And that requires solid foundations.
Aneesh Varma is founder and CEO of Aire.
The views and opinions expressed in this Viewpoint article are solely those of the author(s) and do not reflect the views and opinions of Fintech Bulletin.