They appeal to both clients and investors, they’re adaptable and they have global ambitions. These traits are shared by thriving emerging companies known as scaleups. For World Entrepreneurs’ Day, the founders of four exceptional scaleups share some of the pitfalls they’ve encountered along the way and explain how fast-growing companies can avoid them. Entrepreneurs – take note!
In 2009, Ukrainian-born engineer Jan Koum bought an iPhone and discovered the opportunities that apps have to offer. He decided to develop an app that could sync with any phone number, and ended up creating the quintessential instant messaging service that’s now on all our smartphones. As illustrated by the case of WhatsApp, coming up with a novel idea that will benefit its users is an indispensable ingredient for any successful startup. Yet it is only the first rung of the ladder. To be considered a scaleup – a company with a proven track record of growth – and to continue to climb the ladder of success, there’s work to be done every step of the way.
Strictly speaking, scaleups are defined as emerging companies that have obtained funding of at least $1 million, and have grown over a three-year period at an annual rate of over 20% in terms of the number of employees or their turnover. In Spain, an increasing number of startups are reaching this level of maturity. According to Dealroom, there are more than 300 scaleups. Also, the South Summit’s Entrepreneurship Map shows that the average age of emerging companies has increased from 2.5 years in 2020 to 2.7 years in 2021. Entrepreneurship ecosystems have also been strengthened in a number of Latin American countries, as illustrated by a CMD Innovation Lab report that classes Mexico, Brazil, Argentina, Chile and Colombia as well-developed innovation ecosystems.
How do entrepreneurs manage to secure increasingly large rounds of funding? What do the companies that make the leap from startup to scaleup have in common? And how do they get sizeable teams to work cohesively?
To mark the occasion of World Entrepreneurs’ Day, which is celebrated on 16th April, we put these questions to the co-founders of four software startups with a proven track record – the Spanish company Trucksters, creators of a smart freight transport relay system that partners with BBVA following a successful BBVA Open Innovation pilot; Genially, an online tool for creating interactive designs; RatedPower, a company that optimises the design of large-scale solar PV plants; and Clara, a Latin American firm that’s helping other companies manage their corporate expenses.
Scaleup growth drivers
The characteristics of an industry, breakthroughs from competitors, and even political and economic context can have an influence on a project’s success. Nevertheless, we have identified specific drivers that, among other factors, spurred growth in each of the four emerging companies we interviewed.
Image (from left to right): Luis Bardají Izard, Gabor Balogh and Ramón Castro Neira, co-founders of Trucksters.
Surf the wave of growth
The four startups all have between 70 and 300 employees. Although their founders agree that talent is essential for growth, they acknowledge that it is not easy to maintain a cohesive corporate culture when a large number of professionals come on board within a short space of time. To manage the growth of their teams, they recommend the following:
In addition to managing team growth, Balogh says that another common stumbling block is “falling in love with what you’re selling, rather than making the market fall in love with it.” The ability to pivot has allowed Trucksters to get it right. They initially planned to offer their technology to logistics companies, but following several adjustments to their model they now offer their own transport services to large companies. Giacomán explains that “the advice to never give up can be both good and bad. You have to do your best, but you should also be willing to change course.”
In essence, in order to grow you must recognise that change is necessary. “It’s like a video game where on each new screen you face tougher challenges,” says Genially´s CEO. The entrepreneurship ladder is high and entrepreneurs will encounter hurdles at each rung, but with hard work, enthusiasm, and a solid team of skilled professionals, it’s possible to keep climbing. The entrepreneurs featured in this article are prime examples of this.