“We do see business people that have the extremely rare ability to take a company from ground level to a £500 million business,” says Joanna Santinon, Partner lead of EY’s famed Entrepreneur Of The Year programme.
We interviewed Joanna for the second edition of our Ambition Nation: Female Leaders Series magazine and our talk revealed a few home truths about the mettle an entrepreneur needs to tack through the choppy waters of scale-up. Principally, someone that can navigate it alone is somewhat of a one-in-a-million.
“Investors invest in people”
Working in and working on
That’s not to say those people don’t exist. They do, and the traits that they share are quite specific – to be the businessperson, that can build an empire from the ground up and be investable, you need to be someone with a unique ability to handle working in the business and on the business, generally at the same time. Indeed, from our conversations with entrepreneurs at previous Ambition Nation conferences, a major issue they all share in common is that running a business and scaling a business constitute vastly different skillsets, the latter of which one has to learn uncomfortably quickly.
“When you talk to a private investor, you realise people invest in good management as much as good businesses,” explains Joanna. And it seems that is true of the ‘one-in-a-million’ types, sometimes even regardless of their current success.
“Just the other day, an investor told me they were specifically on the lookout for simply great entrepreneurs – people with ability, but who might not have found the right business idea yet.”
Joanna explains that there are very few, if any, business ideas that are good enough to warrant private equity investment on the idea alone. Investors invest in people. Becoming a highly investable individual means learning how to be that person – building one’s skill base as a leader.
You might enlist on a development programme like EY’s Entrepreneurial Winning Women programme, or Goldman Sachs 10,000 Small Businesses; indeed, The Times reported this week on one such individual, Byron Dixon, the founder of Micro-Fresh, who was recently made an OBE for services to industry and innovation - read the article here.
It’s in such places that scaling and investability is taught, where founders learn how to exhibit the traits of bringing a strategic overview to the business, as well as the more detailed implementation concerned with developing and selling your product.
“The biggest hurdle to scale-up is not one of individual skill, per se; it is a people problem.”
The people problem
In truth, people like this, that can operate as a lone wolf, are rare. Rather than holding on to the aspiration of being that person, it’s worth bearing in mind that as you move up through the various stages of investment, the biggest hurdle to scale-up is not one of individual skill, per se; it is a people problem.
The hardest part for founders is knowing when it’s the right time to take a step back from the business implementation, to show you can deliver that strategic overview to investors.
“Strategic overview really becomes a question of how much of a people person you are, which manifests in your ability to bring the right people on – how you recruit, how you develop them, how you retain them and how you succession plan,” explains Joanna.
Getting your recruitment right
Investors invest in people; in other words, they invest in great management teams as much as great entrepreneurs. A strong founder is one that can show they have the nous to recruit smartly. Being smart means being future-looking.
“Your recruitment plan should focus on people that reflect what you want your company to eventually be – people with a mindset that is steps ahead of where you are now,” says Joanna.
It’s a hard thing to do and it’s a hard thing to get support for; you can outsource all sorts of elements of business development, such as financing. But building a team around you that you trust, that you can work closely with, and that have the knowledge to keep pushing the company up to the next level, is an undeniably personal mission.
“Recruit people with a mindset that is steps ahead of where you are now”
That said, getting it right at an early stage can pay dividends down the line in terms of how investable you show yourself to be. And indeed, support networks like Ambition Nation are there so that entrepreneurs that have done it before and succeeded in that recruitment mission, can advise others on the best way forward.
You might be, or aspire to be, that one-in-a-million person that can take your idea and business from zero to hero; that’s a great thing. But the question of how to be investable need not have such a daunting answer. Knowing when to step back from your business and recruit a team around you that shares your vision and reflects where you want to be in the long term – and in so doing, demonstrating your ability to transition from detailed implementation to strategic overview – arguably creates the strongest investment story you can tell.
Ambition Nation: Female Leaders Series - 'Mind The Gap' is the next event in the Ambition Nation calendar, to be held on September 10, 2018. Please email firstname.lastname@example.org for more information.