Lessons learned when scaling from zero to IPO

Growth is top of mind for most founders, but scaling from startup all the way to a public offering takes dedication and perseverance of the highest order. Naturally, there are many hurdles along the way; no company can reach success without its fair share of tough times.

In a recent xCollective podcast, RocketX spoke to Dagmar van Ravenswaay, ex-Adyen and Venture Partner at Borski Fund and Rudy de Back, CEO of Objective Platform, to talk about these topics in more detail, and the lessons learned throughout the process to IPO and their experiences.

Here are some of the key takeaways for those with ambitions to scale from zero to IPO.

Core values and company culture are paramount

Van Ravenswaay was responsible for connecting the global growth strategy in the scale-up phase of Dutch payment company Adyen, a brand that is well-renowned for its very tight-knit and high performance culture.

Van Ravenswaay cites the importance of core company values as one of the most crucial lessons she learned during this time.

“Those that have already defined and implemented a formula of core principles for working together really guides a team towards understanding one other,” she says, adding that it can be something as simple as not hiding behind email and instead picking up the phone.

“That was a very important learning curve for me,” she explains. “The core values were not just our core values, but they really formed the foundations on which the company was built.”

For de Back, having a defined culture isn’t something startups will hone at the beginning

“It's more about having an enormous drive and a lot of optimism,” he says. “You start by having a basic idea that you test with the market. And later on, it's more about processes and structure, and then it makes sense to form some sort of culture.

“In the beginning, culture is quite tightly-knit with the founding team, the way they present themselves, and the way they act. But when the company starts growing, you have to become more professional and think about what culture you want to embrace and how to present yourself to the rest of the world.”

Don’t be afraid to switch the roles of key team members

One important lesson that van Ravenswaay has learned during her time working at different-sized companies is how a team functions and being open to that changing over time.

“Changing roles is more about keeping the focus on where somebody is best placed and that not only counts for key personnel, but founders, too,” she explains.

“In deal flow meetings at Borski Fund, we always discuss what the team looks like, and it’s super important that we can make an assessment such as ‘is this founder still fit for when the investment comes through, and will they have the right skills in the next stage? To take a step back and take on a different position in order for the company to grow can be an outcome. De Back agrees, adding that when a company is scaling, unpredictability and opportunism can be quite dangerous.

“That's why I think, after 3-4 years of establishing something, it makes sense that the founder/CEO should start thinking about whether they focus on their role maximising the value for the stakeholder. Or instead, focus on operational excellence to help scale up the company.”

There is always a bit of conflict between those two roles, he says, because if you’re the founder, and you have to think about maximising shareholder value, then the operational hassle and challenges can also limit your ability to grow the company.

“Your entrepreneurial instincts basically fade away when you're more interested in operations.”

Going international: timing is everything

Any business looking to scale to IPO will have to make the tricky decision of if or when to go international. Now, how do you pursue this? For de Back, going international is a no-brainer, especially if you’re a Dutch company. However, it’s all about timing.

“You should have a proof of concept that’s credible before you start rolling out, so you know exactly what's working, what the pitfalls are and how you can prevent those pitfalls again, internationally,” he explains.

“A lot of companies feel the need to directly go abroad, and then they end up quite disappointed because the actual model or proposition or product is not yet tested, and they run into all sorts of problems such as it being way more expensive.”

It’s therefore really important that you can rely on a test proposition, you time it well and only make that step when you really have the feeling that you're ready for it.

Final pieces of advice

As a business from startup stage to the all important IPO, it’s inevitable that you will make mistakes. What is important is that you learn lessons from them. For de Back, when scaling up it’s about being aware of your own expectations and a framework that you want to build a business on. And then try to create yourself some kind of safety net, making sure that you have a fallback or an escape - research also the success metrics of the fund, so you don't get fully locked in by one stakeholder.

“While it’s really important to be ambitious, you have to do it in a staggered way and really understand that you must first make sure you can move onto the next level of revenue and then the second one, and so on, and on the way constantly assess if you're on the right track.”

Van Ravenswaay’s final piece of advice is ensuring team diversity for optimal success.

“Diversify your team and do so at an early stage,” she suggests. “Think about what it is like now: are they all copies of your own character?

“Also think about the best time for an independent board member,” she adds. “That's more of a governance advice, but if you have investors, and you are your own shareholder, it might be wise to align those two with your sustainable vision that lies years ahead. An independent board member can help you with that.

Want to learn more? Listen to the full story on Spotify!