Over the years I've worked with a lot of great South African [and a few international] startups.
Technology startups are radically exciting places to work. They are built on the wild idea that they can change the world and take a few big name players down at the same time.
They prototype rapidly, attract young people that are full of energy, have flat hierarchies, chilled leadership, limited rules, drinks on Fridays and are often capitalised by super-optimistic venture capital partners that are flush with lots of cash.
Startups however - especially South African startups - have a very unique culture.
A culture, which in the early days, allows the business to grow very rapidly and hit some impressive revenue numbers, is also a culture which is the polar-opposite of what is required for that startup to start actually making serious, profitable money while standing on their own two feet.
A lot of the consulting work that I have been focusing on over the past decade has been in helping these startups transition from that first stage of cultural development - into the next phase, which is absolutely vital if these organisations are going to successfully breach themselves into profitability.
Years ago I worked with a team that had achieved some astounding growth success - at least that's what their press releases would have you believe, but internally the functional teams were scrambling to try keep up with management's constant selling of 'prototype products' that were nowhere near to production ready. The climate inside the organisation was clouded by burnout, fear, constant resignations and blame. Staff would talk a lot and say nothing, because they had an overwhelming sense that they needed to justify their existence by sounding like they were busy. The culture inside the organisation was one of extreme innovation [an adhocracy run amuck] and very little predictability, clarity of communication, leadership or teamwork. This was a culture that was in a constant innovation cycle, but never took their immense effort to a commercial end. They existed on VC funding and were very near the point where they just would be able to sustain the effort any longer.
The challenge was first to bring awareness to the cultural issue, reduce the power of the source of the disruption, calm the growth engine down just a bit (enough time for the ops teams to catch up) and begin to bring a few structures in place; while at the same time focussing intently on the effectiveness of their internal communication.
It was a long and painful process, but the business survived as a direct result of the intervention and eventually went on to be sold to a much bigger organisation who continued the work and brought in their own systems and methods of innovation commercialisation. But it was the internal culture, the prevalent collective behaviour of the organisation that needed to change first before that opportunity could be fully leveraged.
It was Peter Drucker who said: 'Culture eats strategy for breakfast' - and in my experience as a business strategist and futurist, this is one of the most profound management statements ever made.
It really doesn't matter how many strategy sessions you host or what hotshot administrator you hire to try 'turn things around' on your behalf - if you do not have a careful look at your company culture, and make a commitment to redesigning and reengineering it so that it is fit for purpose for the future that you want - you're just throwing good money after bad.
A typical South African startup culture is not conducive to scaling and making a ton of profit from most innovative ventures. Before you can think about scaling and making some serious money you will need to very truthfully have a long an honest look in the mirror and ask some hard questions about your collective company culture first.
With a lot of introspection, some guidance and a good facilitator it certainly can be done (I have enough case studies to illustrate how), but knowing that this is where to start is important action step #1.