Building a strong team is nothing less than a herculean task. How can you ensure early growth translates to scalable results?
Is growing with a lean team better, or do you need a bigger team? How can businesses utilise individual contributors to grow?
To answer all these questions and more, Puja Bharwani, Co-founder and CMO of Wizly, sat down with startup advisor and investor Jonathan Wong. Jonathan boasts of an extensive track record of creating value (from 0 to Unicorn) at Uber and CloudKitchens, building high-performing teams, and scaling high-growth profitable businesses as COO / Head of Strategy & Expansion / Regional General Manager across APAC.
Here are some highlights of the conversation.
Growing With Patience
Puja: Thank you so much for joining us to share your playbook for scaling to success with all the experiences you've had. Can you tell us a little bit about some pivotal moments in your career?
Jonathan: Thanks, Puja. I'm really, really glad to be here and it's a fantastic opportunity to talk a little bit about my experience. Starting off, I’m Malaysian, and I grew up in and around Asia, and over the past 10 years, I've dove a lot deeper into the world of startups after beginning my career in the investment banking and consulting space.
I spent about four years heading up the ride-sharing business for Uber in Singapore and Malaysia, where we took a business which was small and scaled it to a point where we were delivering millions of riders around Singapore and Malaysia every week. After the journey at Uber came to an end, we sold the business to Grab in early 2018.
I then joined CloudKitchens, a company backed by Travis Kalanick. I joined as one of the co-founders for APAC. In early 2018, the concept of food delivery and cloud kitchens was still very nascent. I was brought on to the business to figure out a way that we could build this offering from a zero base to really what ended up being pretty foundational in the world of food delivery. We ended up bringing the concept of a cloud kitchen or a ghost kitchen to APAC in and around 10 different countries, with hundreds of locations and thousands of kitchens. That took me across APAC from North Asia, Korea, Japan, Taiwan, and Hong Kong, as well as Southeast Asia, countries such as Singapore, Indonesia, Malaysia, Vietnam, as far west as India, and as far south as Australia.
The business there took itself from a zero base to hundreds of employees, valuations in the hundreds of millions, if not billions, and took us to a business where we found a way to bring that concept of product market fit and profitability at scale as early on as possible into that journey. So that's a really proud accomplishment of mine, having closed that chapter after about four and a half years in the business.
Puja: Let's go into getting revenue and profit from the early days. As we know, times have changed, and we need to think about startups making money and having a legitimate and credible business model that has been in the works from the early days. Can you tell me what methodologies you used to scale and some of the problems you faced ?
Jonathan: I think it's important to back up and have a bit of context as to how the world has changed over the past 10 years.
When I first joined Uber in early 2015 or late 2014, we were in the heyday of Blitzscaling. You take the constituent growth and multiply that by a hundred, and that's really what Uber was at that point in time. It was a battle of competitive position, market share, and top line.
After that journey at Uber, we realised that unit economics really has to be king. And you have to be able to find a way to eke out profitability at each and every part of that value chain. So bringing that lesson from the Uber part of the journey into the world of cloud kitchens gave the team and the founding members of this organisation a lot more perspective on how you need to build for profit from day zero. Because as we know, in the world of ride-sharing, food delivery, and ultrafast e-commerce unit economics have yet to still be proven at scale.
Therefore, working in the world of cloud kitchens, we knew this had to be something we should focus on from day zero. We knew that this had to be our North Star and that we couldn't make those trade-offs very early on about getting revenue at the cost of profit.
This was mid-2018, and we were still in this phase of hyper-growth — plentiful VC money, the kind of top-line metric of growth and top-line revenue was still king, but we wanted to take a slightly different approach at cloud kitchens and focus on profitability from day zero. What we did here was try to implement a sense of patience into the entire organisation from the very start. It's very tempting in any organisation to become fixated on the number of customers, amount of revenue, how fast you're growing month over month, week over week, and depending on your business, even day over day. In a way, we had to make sure that we didn't get too high on our own supply.
We had to make sure that the growth was moderated with a view to long-term profitability. Taking that lesson into 2018 and as we grew the business from a concept that was vague and amorphous to a world where now if you talk to a restaurateur about the concept of a cloud kitchen, it's relatively well known. That journey was deliberately a little bit paced and deliberately a little bit more patient than I would've been in the prior years, with exactly this intent to build profitability from day zero.
Puja: So your mantra is “Grow With Patience.”
Jonathan: Yes, exactly! Grow with patience and have perspective on the top line, meaning look at the top line for all of its virtues but recognize that the top line is a misleading metric.
Some VCs, investors, and external companies may only still want to look at the top line because that's the easiest measure of growth and success. But what it comes with is often a lot of obscuration or masking of the underlying economics of the business.
Building A Lean Team
Puja: How does growing with patience translate into building lean teams, pricing frameworks, and discipline? Does that go into the very value system of a company and culture?
Jonathan: I think growing with patience has to be embodied at every single level of an organisation. It starts with the leadership and how the leader conducts themselves and the values that they transfer into the business that they're leading. But it can't only come from leadership. Every single member of the team, whether it's an intern, an analyst, a vice president, or another C-suite member, they all have to get on board and be prepared for this patient journey from day zero. This almost has to be part of that orientation that they have.
When you're building a team with, let's call it, the ‘growth with patience methodology,’ it means often looking at your hiring and not going for what seems to be the most attractive candidate or the most qualified or credentialed person. Growing with patience also means training with patience and building a team with patience. One of the nice benefits of growing with patience is that the people that you bring on get to grow with you. Therefore, growth with patience applies to the overall business but also to the type of team that you're growing internally as well. This allows the team to map themselves to the company's culture, vision and journey together. It allows the business to grow with the people that you bring on.
What this means as a kind of consequence of this approach to your hiring being a little bit more deliberate, not hiring the person who seems the most credentialed, but bringing a team which is the right size for the organisation at every stage. You might have the tension and stress of being stretched too thin. But it is better to be stretched too thin, and everyone working a little bit harder and owning a little bit more than to have a team which is a little bit bloated and has a sense of overcapacity, which then pervasively moves into the rest of the organisation. That becomes very hard to fix a few months down the track.
One example which I think is relevant is that as we were building up our go-to-market sales organisation. We were in a B2B sales business, and we were selling a product which no one had heard of in a world where the entire fundamentals of food delivery in the cloud kitchen context were still growing and still being proved out at scale.
One of the things that we were very tempted to do very early on was to look for folks who came from the SAPs, the Oracles, and the large enterprise SaaS companies of the world. This was because they basically knew how to sell incredibly complex products at incredible scales and incredible rolodexes. However, what we realised is that those same people who may come credentialed and have incredible skill sets weren't ready for the pivot into an organisation which is so much younger and with a product which is so far less sophisticated in many ways because it is an organic growing product. If we had made that call, they would not only have been more expensive, but I think they would've introduced rigidity into our organisation, as they weren’t ready to take on this journey of being in a startup, growing with patience and taking the journey with the rest of the team.
Pricing And Packaging
Puja: When you are launching something at scale at a B2B enterprise level, how do you internally segregate your positioning, and do you package and position differently for each market?
Jonathan: In terms of pricing and packaging, I’ll tell you more from a perspective of what not to do. This is because pricing and packaging are something which the market has to inform. I think where we started was a one size fits all strategy. The rationale behind that was if we don't know what to do, let's do it for everyone. But one of the downsides of being in a fast-moving and nimble startup with a very lean structure is that you can pivot incredibly quickly. But what ended up happening is that we fell into this trap of having one pricing structure and being so nimble and trying to cater to every single sub-segment of the customer base that we ended up having far too many pricing structures.
Therefore, we went from being overly simplistic to overly complicated way too quickly. So when it comes to pricing and packaging, what we ended up doing is being much more deliberate about who we actually wanted to target. Knowing after this little bit of a full pile that maybe this wasn't the right approach, and is going back to basics. For example, if there are a maximum of five groups of folks that you can go after and have a clear pricing structure which is accommodating for each of those three to five, no more than five. And by having these groups, you're able to get sufficient feedback on a finite number of options that you can continuously improve those options versus continuing to splinter and have more and more. In a smaller and fast-growing organisation, that complexity can be asphyxiating because you have too many things too quickly, the team can’t keep up, and you can’t keep up. You end up having a model in the market which feels bespoke without the fundamental organisational structure for a bespoke product because you're still trying to scale.
Individual Contributors
Puja: A lot has been talked about the individual contributor (IC) as well. How does that fit in and deter teamwork and commitment to a common mission if there's so much emphasis on the individual contributor?
Jonathan: I think individual contributors have almost been underappreciated for many years in the world of startups because one of the only measures of success in a startup was how many people you were managing. Whether you're in a Series A, Series C, or even a Unicorn, that was how everyone was valued. What happened, as a result, is that there was a massive talent gap when it came to middle management, as you kept promoting people seeking that extra responsibility to gratification by having larger teams who weren't prepared or experienced enough or equipped to tackle those things.
A natural evolution of that is exactly as you said, the individual contributors coming back into organisations and their true value becoming more evident. In an early-stage startup, individual contributors will contribute the lion's share of the work, and if you start having too much middle management early on, you end up with a bloated structure. You end up having people who delegate and distribute versus creating value independently.
Until you reach a certain stage where you, as a founder or CEO, are struggling to keep pace with the amount of stuff that's going on in your business, when it hurts a little bit, you need to start introducing middle management. If you introduce it too early, then what happens is that you end up creating a distance between yourself and the business, and everything you hear becomes second-hand, third-hand, or fourth-hand, which then dilutes the fidelity of that information. So resist the temptation!
It's tough to manage a team of 10, 15, or 20. But the value of being able to influence and impact each member of the team directly as a leader is non-negotiable. That will set up these people long-term for much more success. The challenge with the individual contributors in the long term is that as the business grows, what the individual contributor was brought in to do on day one is very different to what they have to do on day 100. This is the nature of the business, as it will evolve dramatically through time. Therefore, what happens is that the individual contributor also has to be able to grow with the business.
So, rather than hiring somebody who comes in with a fantastic skillset which is form fitted for exactly what you need today, a very important part is to hire people with the potential to grow, learn, pivot and stretch het skill sets into adjacencies that you at this point probably don't know that you'll need. One of the things that often happens is that you hire someone who's fantastic on day one but quickly becomes outs skilled or becomes a little bit out of place in the organisation as it becomes a little bit different. As an IC, the value of that person's role is contingent entirely upon the value that they bring to that particular position. But if the person doesn't change as the position changes, that mismatch grows, and that value, therefore, deteriorates a little bit.
Company Culture
Puja: Let’s talk about building culture as you grow. As you scale, that’s when the company culture can change dramatically because more people come in and there's a different way of looking at things. How can one ensure that the culture that was intended for the vision and mission when it first started remains aligned?
Let’s take Uber as an example. It had so much of Travis Kalanick (ex-CEO of Uber) in it when it first started. Then, of course, he left, and there are still remnants of that culture, right? Uber is just one example. In startups, when you begin, it’s a very small group, and it is easy to spread the mission and vision. Then as they grow, people sometimes lose sight. Here, what can you do to keep that vision and mission always at the forefront to make sure that you're doing something meaningful. Because people work for people, and especially for startups, they are attracted by the vision of the founder or what they're trying to do with the product or platform that they're building. We are working with a generation that is into purpose, and they want to work with people who are making a difference. So how does one ensure that culture and purpose grow with the company, especially in these times when you don't know what's going to happen?
Jonathan: It’s very easy to link everything you do back to it. As the business grows, what happens is you start having more metrics, you keep adding more KPIs, and then talk about specific customer wins and why they joined. For example, six months down the track, when you are managing a thousand customers, the focus shifts to the thousand and not about any of the individual success stories or connecting any of the success stories back to the mission.
Nearly every company I've been in has forgotten about them at some stage, and then there’s a reaction that we do not have culture. Then they go back and try to do one big session, but the culture's not fixed or formed in a day or a session. It has to be drip-fed through time. It should be woven into the fabric of your organisation while being mindful of connecting that story every day. Moreover, I'll also talk about positioning it from a place of optimism because that breeds positivity. Then people become the champions of culture, and you are able to disseminate culture from each person. Therefore, as the business grows, it is true that people won't end up joining only for the culture or mission at some stage.
Puja: What is your one piece of advice to companies that are growing and scaling in changing and uncertain times?
Jonathan: It’s going to be tough, and the uncertainty is jarring. Internally and externally, there's a bunch of stuff which could go wrong. The thing that I would really recommend to any leader, and I try to live this myself, is to recognize that no matter what pain, challenge, or problem you're facing, it's an opportunity for you as a professional and as a person to grow. And if you start perceiving all of these things as investments rather than costs, then suddenly the challenge is not as bad because you know that you're investing your time and effort into becoming a better version of yourself, the company being a better version of itself, and your team to become a better version of themselves.
I think having this mindset about how uncertainty and challenges can, in fact, brace you for a much brighter and bigger future makes it all a little bit more positive and a little bit easier to stomach.
This was one of many insightful and engaging sessions we have lined up for the future. Be sure to join the Wizly Community for the latest updates.
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