Ask any entrepreneur what drives them, and for most it’s the simple ambition of growing their big idea into the next big business.
Of course, no five year old startup or scale-up investor plan would ever predict flat growth, and no company is going to become a unicorn overnight. But from those early days of ideation and investment, the end goal is always growth, and – if you can manage it -hypergrowth. Because who wouldn’t want to be the next unicorn in the forest, or become the next Elon Musk?
Hypergrowth, a concept first coined by Alexander V. Izosimov in a 2008 issue of Harvard Business Review, is the rapid growth of a business by at least 40 percent compound annual growth rate.
If you have time to go back and read Izosimov’s original article – and it is worth a read – you can see that the priority of a hypergrowth focussed business has to be selling. Or, in his words, sell first and ask questions later.
Sales define hypergrowth, and a sales-first approach is the only way to become a big player in any market. You don’t plan your way into a perfect business; rather, you grab the wave you want to ride and grapple with the problem of having to grow as a result.
Entrepreneurs have to be both great dreamers and great salespeople, and let’s be honest, sometimes they need a little bit of luck. But there is a lot less luck and a huge amount more judgement than you’d think behind the growth success stories we all admire.
A business offer without a scalable business operating model
will turn a potential unicorn into a dodo.”
There is skill at play here, and the leaders of our new unicorns are actually phenomenal at executing the right things at the right time. While they need to have a true passion to see their startup or scale-up grab market share quickly, they must also understand that through each stage of growth they absolutely must put in place the people, process and platforms that can ensure the business moves forward sustainably.
In today’s hypergrowth world you have to be ready to go – and go as hard and fast as the market demands.
Research from the World Economic Forum talking to 200 growth businesses back in 2018 identified the biggest priority for hypergrowth companies as that of being able to scale at the speed of growth. Of course they also need a fantastic product or service as well, along with the right talent and funding.
But with the right external market factors sweeping them up, they will get hurled forwards faster as they catch the proverbial wave. Fair warning – a fantastic business offer without a scalable business operating model will at some point stall and turn a potential unicorn into a dodo.
Don’t be a dodo in front of dragons
I’m a big fan of Dragons’ Den, enjoying the TV show pretty consistently since it started, hiding behind a pillow every now and again while watching some pitches. But to my recollection, I’ve never seen an entrepreneur stand in front of the Dragons and pitch for £75,000 for a 15 percent stake in their business and say it’s because they need to buy an ERP system or new IT operations management platform.
While they never ask for it outright, (they always want the cash for branding, or marketing, or social influence) at some stage Deborah, Peter or another Dragon are going to sit them down and tell them that the business leaders who consistently invest in the right areas are the ones that catch the growth curve faster and more consistently than their competitors.
To that end, putting in place the right digital operating platforms to run finance, supply chain or IT systems must be on the radar of any hypergrowth hopeful.
Sébastien Ricard, CEO and founder of LumApps, hit the ‘scale nail’ on the head when he said that despite all the other challenges of a hypergrowth business (people, products, innovation, data), “after a certain point, your systems and operations break down. You don’t account for important IT problems such as infrastructure or software scaling.
“Systems that worked with 10 employees are pushed to the limits with 50 and a major hindrance with 1,000. Then, you have to spend even more money modernising them.”
And here I have a little saying: you can find the term ERP in entrepreneur as it also is in enterprise, and to move from one to the other you are going to need a business operating platform that helps you run your business well – both while it is small, but also when you hit the accelerator so as to keep your business intact.
It’s always a treat supporting hypergrowth businesses
as they make the journey from startup to scale-up.”
In 2022, your hypergrowth leadership needs the ability to scale the business, and SAP is at the forefront of this – putting the ERP into entrepreneur to ensure you can become an enterprise of the future.
Grow by SAP is a fantastic offering to high-growth companies which puts the power of a hyper-scale operating platform into the hands of a business of any size, giving them access to an ERP system that ensures they can move successfully from a cash-burn business to a cash flow business, from spending their investors’ cash to revenue streams from a growing customer base.
With the support of the Grow by SAP programme, growth companies can get advice, access to business networks and the assurance that the back office can scale to support the growth of the front end.
Built around SAP’s cloud-native ERP, the concept of Grow by SAP is to put a foundational platform in place before the business needs it, to pre-load scale and growth potential in those key operating areas and also open up advanced capabilities such as intelligent automation RPA, making it easier to scale the size of the business without scaling people as the first option.
SAP is also putting money and expertise on the table.
Eligible businesses get their first six months for free, which means they can manage their overall cash burn more intelligently while getting to grips with using the platform inside their business.
And before you can say “but it will take six months to implement!”, SAP has developed a rapid deployment methodology which allows them to implement the platform in as little as four weeks.
It’s always a treat working with hypergrowth businesses, supporting them as they make the journey from startup to scale-up. So it’s very exciting to be part of this SAP programme which shares our passion for investing in great businesses to help them realise their potential as the next big thing.
Grow by SAP is perfectly designed to help create the next unicorn, and that my friends is not an idea that is away with the fairies.