How to Scale An Early-Stage Startup During Covid-19, with Kimberly Ofori

I see everyone joining us right here, right now, which is wonderful. Good afternoon, good morning, good evening to wherever you are in the world. My name is Rachel Sheppard. I'm the Director of Global Marketing and the co-creator of the Female Founder Initiative at Founder Institute. The Female Founder Initiative is a platform powered by Founder Institute, which is the world's largest pre-seed startup accelerator. We help women around the world launch, grow, and fund their companies. And we also— if you want to learn more about the Female Founders Initiative, you can go to www.femalefoundersinitiative.com. If you're interested in learning more about Founder Institute and the Pre-Seed Accelerator seems like a good fit for you, we're currently enrolling across 6 continents in over 70 countries. And you can check out more information about that at fi.co/enrolling. But here with me today, I'm very excited to be speaking with Kimberly Ofori. She's a growth strategist and scale-up consultant. She's a multi-time founder and current founder of Growth Lab. She's mentored with Founder Institute and mentored many, many startups through FemStart as well. Kimberly, is there anything you'd like to say to the audience today? Welcome.

Thank you so much for that, Rachel, and good morning, good afternoon, good evening, everyone. It's so great to see all of you joining in today, and I am excited to dive into this discussion around scaling your early-stage startup and how to do this in times of crisis. Now, so as Rachel mentioned, my name is Kimberly Ofori, and I was born and raised in Amsterdam, the Netherlands, to my Ghanaian father and Surinamese mother. For those of you who don't know, Suriname is a small country in South America. And like many of you, at a certain point in my life, decided that I wanted to step out of the ordinary and try something different. And one of those things being entrepreneurship. So I went out and started a number of businesses ranging from digital platform solutions to human resource, and I even dipped my toes into global FMC markets. Some ventures were more successful than others. I've been fortunate enough to have sold 3 businesses, but most importantly, my journey into entrepreneurship provided me with tremendous amount of knowledge and insights and really hands-on experience concerning the founding and the scaling of a startup. I quite recently sold my online social networking platform for entrepreneurs to a US investor, which was another great experience, but I'll save that for another day. As of today, aside from working on a couple of exciting new ventures, I am, like Rachel said, a scale-up consultant. Training management teams of rapidly growing businesses with revenues ranging from €2 to €100 million on how best to structure their organizations for the next levels of growth. And I also consult organizations on business model design and strategic innovation. And of course, not to forget, I am also a mentor for Founder Institute and, and FemStart.

Wonderful. And we have an amazing audience with here, with us here today. Thank you so much for sharing with you Sharing with us where you're calling in. We've got people from Israel, Canada, Belgium, Boston, Arizona, Germany, Chile, Seattle. Welcome, welcome, welcome. Ghana, India. So thank you so much for joining us. We're so excited to learn from Kimberly, learn from her experience, and specifically talk a lot about scaling. That's our, that's our main goal today, and we're very excited to have everyone here. So the first thing that we want to go ahead and do is our team is going to put a poll into the chat here for you to engage in. So the— there are 2 questions we want to know, and this will help us as you put in these results, this will help us sort of gear the conversation towards answering your most pressing questions. First, the first question we have for you is, what is the biggest hurdle for your early-stage startup right now? You know, are you— is it validating product-market fit? Is it attracting new customers? Is it cash for product development or not enough qualified team members? Ooh, and the results are coming in. This is exciting. And then the second question we have for you is, how do you describe your startup strategic response during this crisis so far? Have you been defensive, meaning you've had to let go of some staff or shut down operations? Would you say it's been neutral? We're trying to move forward with business as usual with minor adjustments. Or would you say it's been offensive? So we've had completely changed our product offering and have repositioned. And so kind of as we let these results pour in, Kimberly, we'll get started with a quick question for you, which is really why do only 0.4% of startups scale?

Well, it's super interesting actually. I've been looking at it for a while, for a long time now. And to answer that question, I first always like to reverse that statistic to say 99.6% of ventures stall out or fail, and that is a lot of failing startups. And so what these statistics remind us of is that it is hard to run and grow a business in any industry. And of course, there's no one reason why startups fail or unable to scale, but what we do know is that a lot of the issues and the struggle to scale starts with the lack of information and know-how. So really the basics on what needs to happen internally in order to scale. So to break it down, in order to grow from a startup team of about 5 employees towards a scale-up company of more than 50 employees, a company needs to transform itself. It needs to transform itself from being a team to becoming an actual company, having a founder to having a CEO, and from your first revenue to having recurring revenues and moving from projects to processes. And then the need to grow from your initial product, your MVP or whatever brought you this far, to having an innovation pipeline. And so there is a lot of change and transformation that needs to happen. To lay down a solid foundation on which you can then build upon in order to scale. And a lot of startups simply do not know how or when to navigate through that kind of transition. And so this is where you will see one of three things happen. Either the founder gives up because it's too hard, the team gives up because, you know, there's not enough guidance, there is a lack of vision, the drive, motivation, or the plan to scale is executed poorly, which then results in failed attempts. And here's the thing, right? There is no simple formula for scaling your business. So because we live in a volatile, uncertain— we've seen that— complex world. And so a lot of things are out of your control. The second thing is, your success is really path dependent and your growth is really interconnected. It needs to be organic and symbiotic, meaning that there are a lot of factors that need to work well together in order for you to succeed. And so before you get a grip of all of these things, you will find that, yes, over 99% of startups fail.

Yes, it's a, it's a, we see a lot of the same things at Founder Institute too, right? And that's something that you, you, you, I know you teach a lot of founders about. And two of the traits that come up quite often in terms of, of, of how you coach and educate founders are discipline and focus. You talk a little bit about those important, the importance of those two things and also tips on how to maybe develop those if founders are feeling like they don't have one or enough of either?

Right. So I believe that, you know, what we have seen in— when we are observing and researching and looking at companies that have successfully scaled is that they are able to focus on a certain goal for an extended period of time. And so what happens usually in your startup phase, you're grabbing all of these opportunities just to get, you know, cash flow or to get audience or to get people to buy into your product. And so that is, that's not really focused, but it's normal. It's like the hustle that comes with, you know, a startup. But after some time, you will find that that's not scalable. And so that's when you need to start working on what are you going to focus on. And that is really finding out who exactly is your target audience for the product that you have developed. Or the other way around, and then focus on that particular target group and servicing only them, because that is the only way you will be able to test, you know, if your products are, you know, validating. Does it fit the market? Are you able to generate enough revenue? Is your margins right? Are your margins right? If you're gonna start offering all these side gigs and side services, what you will see is that it actually really cuts into your margins and lack of focus usually starts developing a lot of miscommunication internally. And so a founder really needs focus. Like as an entrepreneur, our minds are all over the place most of the time. We have all these ideas and so we need something to bite into. So that's what we teach. Focus is probably the most important thing that you will have to start working on once you want to scale. And then discipline is really, you know, once you have figured out what you need to do, follow through. You know, you cannot say that we are only servicing this type of customer and then somebody offers you $100K and then you're gonna move away from that because you've already figured out that usually it doesn't work well for you in terms of delivery time. Probably isn't good for your margins. It's not what you want to— you don't want to have customers who are going to cost you more time than what you have. And so discipline is really setting, following through on the decisions that you have made for extended period of time instead of trying to just get a little bit of this and get a little bit of that. So we really teach founders, if you have made a decision and you've seen that this is the focus that you need to have in order to grow, then you need to periodically review that you are keeping up with those and making those appointments.

Fantastic. That's awesome advice. And the results, kind of along the lines of what you were talking about, the results of our first, our first two polls are in, which is the number one thing that's the biggest hurdle right now is attracting new customers, followed by product market fit and then cash for product development. And then most of our audience has been mostly neutral throughout this crisis, and then offensive, offensive, I should say, followed by defensive. So any advice for founders on the call right now who are looking to attract new customers? You said focus is really important. Any other, any other things you really want to share with us that could help them attract new customers during this time? Right.

So it's usually always comes to this chicken and egg theory, right? So you have this product, and then, or you have this, these customers that you want to reach, which one are you going to focus on first? I always say, do your research on the market that you are looking to service. What problem are you trying to solve? So you may think that you have a great product, an MVP, an idea, but if you see that your market has changed while you were working that out, don't hold on to your idea and say, I'm going to push forward and try to get customers for this exact thing that I've created. We have seen, you know, with COVID that whatever you have, a lot of businesses who were founded just last year had to pivot their business model to and adapt to the new way of working and to the new needs that their customer base had. And so an entire market and sometimes entire industries had to change. And things that previously were seen, you know, if you are in the services industry, things that were previously known as, you know, having to be offline, such as events, to have a good experience are now— we're seeing that we are having major global events with triple the revenue and profits by doing it virtually. And so are you going to hold on to your old business concept or to the product that you had developed, or are you going to look at what is happening in the market. So my first advice would be, if you're struggling with getting new customers, make sure that you have done your research on what is happening and what has changed in the market. And also try to find out always what are the competitors or people in your peers doing that are attracting these customers. Because a lot of times you can actually leverage off some of the research that you've done. You don't have to copy, you need to always validate and do your own research. But it really helps if you are seeing that your customers are asking you for a specific feature that you don't have and a competitor does. That's usually a signal that you haven't quite found either the product market fit or you're not focusing on the right audience.

Yes, absolutely. And being in touch with your audience right now is something that's super important and something we're really talking to founders about as well at Founder Institute is if you can create a small community of people who who are your target audience and know your product really well and talk to them as much as possible. That's huge in navigating both attracting new customers and product-market fit as the markets start to shift. Right. Kind of along those lines, we had a question about profitability here from Payal who said, at the beginning, should you start a business with low margins to test and learn or focus strictly on profitability early on in your startup journey?

I think this really depends on the industry that you're in. And the reason I say that is because sometimes if you start with low margins in a particular industry like manufacturing, so it's very, very hard to get out of that because getting deals with suppliers and all of that are all incorporated into your margin. And so once you've set a deal that might not be favorable for you in terms of margin, there's a very long road ahead of you to try to change that. So it really depends for, and this also counts for if you are servicing, if your product or service is related to people. So if you're in consulting, for instance, whether it's in it or you having services that you are selling, Decision you make now to offer things for a lower price is going to affect the way people perceive you later on. So, if for instance, we know, Apple is the perfect example, you know, they started off with very high price points. Nobody had ever seen or felt or nobody knew about the technology that they were launching. But they believed that if you are pricing it this high, there must be something that is validating that. And so, Apple did a very good job showcasing that they use quality materials and that there was a lot of research that went into it. And so, they really focused on what is important to our target audience. Our target audience prefers, you know, security. They like quality products. And so, we are going to give that to them, but at this price set. So make a decision early on how you want to be perceived in 10 years from now, because that's probably what's going to happen if you start with a lower margin.

That's a great point. Kind of along these lines too, I was having a conversation with a founder recently who was asking about traction, right? So she's really under pressure to have more traction from investors and she's B2B and the companies don't really have a lot of extra capital to spend at the moment. So she's considering sort of giving them an extended free trial trial, but keeping the pricing at what she would normally, you know, want to launch it as. Do you have any thoughts on that in terms of just getting the product in the customer's hands or any sort of tactics you've seen founders use that could be really effective?

Yeah. So you— there are ways that you can actually leverage that. Sometimes you can choose to get people, as much as many people on your initial product. As possible. And so I usually like to use the PlayStation and the Xbox example. So PlayStation and Xbox, they actually decided to go for very low margins in the beginning when they were developing their consoles. And so they were— their target audience were avid gamers, people who actually wanted to pay and expected quality. And so what happened is that they invested a lot of money in having quality manufacturing. And, you know, the video games needed to be of a higher quality, you know, and that really, actually they ran on a loss for many years. But what they did is that they wanted to make sure a lot of gamers were trying out their product. And as soon as they had the PlayStation or the Xbox, at home, they will now start reaping the benefits from these royalties of developers, game developers now wanting to develop games for these consoles. And so what they did was they started off not taking a lot of profit, but getting a lot of people to use their product and then working their way up by their— this new business model that would help them really make profits by having game developers pay, you know, crazy percentages in royalties to develop video games. The other way that you can approach that is Nintendo is a great example. They are actually a competitor, and what they did is they found out that, you know, the market for avid gamers is probably already saturated with PlayStation and Xbox. But there are a lot of people who are casual gamers who probably like, you know, being more active, who don't really care about the high quality of things because they'll occasionally be using the games. And so what they did is from the beginning, they made sure that their manufacturing and their prices were affordable for them, and they made profit from the beginning. And so they were tapping into a new segment and industry and market segment that PlayStation and Xbox didn't even consider to be customers. And so now we had all of these moms and these grandmothers and these kids playing with the Wii because they, first of all, weren't being serviced, and because it was something lower priced, and they were able to easily adapt to it without having to be, you know, gaming experts. And so Nintendo actually used that to get out of the, you know, the— red figures that they were in at the time and made profits from the beginning. So these are two strategies that you can adapt.

Will had a similar question to that, and I'm glad you touched on that too, is really when you're not first to market, and he's specifically asking for non-coders to build web and mobile apps, how do you overcome not being first to market as a startup founder? Right.

No, I think that really, so part of what I said applies to that. And I think also, There's a lot of advantage to not being first to market. We've seen that a lot of times where, you know, the first to market is being probably the hardest position to be in because you have to educate people on new ways of doing things. So there's a lot of research and development that needs to be done. There's a lot of testing, a lot of failing. There's a lot of investment, on and on and on. And so once that first-to-market product or service has found a sweet spot and they're publishing and you're noticing that, you can just tap into the knowledge and the market that they have created for you to provide your services. And so I think that it actually works in your advantage. And so I think a lot of the times what we see is that founders feel limited by, you know, oh, there are already big players in that field, but you shouldn't underestimate the advantage, the competitive advantage you have, because now you can build upon firstly the market that they have already set out. They've already educated them for you. And now all you need to do is look at, okay, how is the market changing? Because you shouldn't forget, as a startup, you are going to be able to make rapid changes and quick decisions and adapt more rapidly to the changes in the market than an already set firm. They are going to have to redevelop, pivot, it takes a longer time. And a lot of the times they are not able to do so because they build their products so specifically for that period of time. And so that would actually be your competitive advantage.

Agreed, totally. And also we've been talking to startups about that now too. It's like, now's a great time because, you know, a lot of companies are putting a lot of capital into changing everything around and trying to figure out how to survive and, you know, through COVID and its potential, you know, long-term problems as well. And so, but startups are able to be completely agile. So I totally agree. So moving on to one of the topics, the third most sort of biggest challenge for the founders who answered our poll was cash for product development. And so do you have any, you know, cash flow was something I know that you teach a lot of founders about, and any action items for founders in the audience right now who are looking to improve their cash flow immediately?

Right. I mean, cash is, you know, was inevitable to become in, as you know, something that is a huge topic. I, and I was going to touch on that on the first best decisions to make, but I'll elaborate now. I think the best cash decision that you can make early on is looking at the first law of entrepreneurial gravity, which is growth sucks cash. So I would encourage startups to calculate their cash conversion cycle, which measures company-wide how long it takes when you spend a dollar on marketing, on design, on rent, wages, until you get that dollar back. And the reason I say this is because once you understand where— what processes and things happen before you are able to generate revenue from that investment that you've you will most likely find in the beginning that there are certain processes and your strategy and things in your strategy that you need to adjust and change in order to become more profitable. So it could be that you are finding out that the kind of customers that you are servicing now have a habit or are accustomed to maybe paying you in 60 days or they're accustomed or, very used to paying lower prices than what you are offering your services for. And so once you start looking at that cash conversion cycle, you'll find out that, wait a minute, 70% of my customers actually expect and find it normal to pay me in 60 days, and I cannot afford that. So is this the right target group, or is my strategy— does my strategy need to change in terms of what am I offering them in terms of incentive to make them pay earlier or to make them pay a higher price. And sometimes that would mean that you have to, again, go back and review whether or not these people are the people you want to be marketing to. And so there's no like magic way to get more cash. Like you can ramp up sales, but then it could also press on your profitability. And so what we need to— we shouldn't forget as founders is not to look so much at how much revenue you are making, but how much profit can you make off of that?

I love that. That's super actionable. Just track that dollar. When does that come back to you? And that especially comes up a lot when we talk about like marketing expenditures, because those are very long-term, right? Sometimes now I'm spending marketing dollars and that may not come back for, you know, 3 months or something like that. So love that. Okay, so let's, let's talk a little bit about the scale-up DNA. So how do you check your scale-up DNA as a company? Let's talk a little bit about it.

Right. So the scale-up DNA theory, which is based off of researching hundreds of thousands of startups, stands on the belief that your scale-up potential is defined early. And so in order to find out if your business has the DNA and therefore the high potential of scaling up successfully, a startup would ideally tick the boxes of these 5 areas. So you have a compelling vision, you have a great market, you have delighted customers, you have a competitive advantage, and you have a scalable model. So breaking that down, what it means is to have a compelling vision is that you have been able to articulate a mission to resolve a large or an urgent need through an ambitious and future-oriented business concept. Having a great market means that the market that you are in provides you with tailwind, market size, potential for growth, and best industry margins. Having delighted customers means that you have customers that you are servicing or could potentially be servicing who are buying your product as fast as they can because it's either significantly better than the competition and it really fills an urgent need. And so, with delighted customers, again, Apple is an amazing example of that where we— every time there is a launch, people, you know, spend the night in front of the stores to make sure they can have it as soon as possible. And then the competitive edge, so that is that which makes your product or service distinctive, something that you have owned, trademarked, a mastery of skills, or a privileged relationship that you can provide your customers. And then lastly, that scalable model is really a business model which you will be able to increase your returns in the long term. So something that is constantly able to evolve with viral dynamics and will allow for improvement through the use of the product and that focuses on economies of scale. And I actually like to use this analogy to make sense of it all and perhaps maybe put it in simpler terms. Try to see your startup as a little turtle that is on a clear path, and all it needs to do, you know, it hatches out of the egg, is reach the sea. That's the first thing that it needs to do. And this is the period of time that you validate your product and you validate your market fit. And once you've reached the sea, then an ocean of opportunity lies ahead. You're going to look at, you know, okay, now that I have had my first sales, people are buying into it, there's a little bit of buzz. You know, what countries am I gonna work in? What market segments am I operational in? Which new products can I develop? And once you've decided on that, that's the time to take those strategic bets that will then help you scale.

That's awesome. That's the cutest startup analogy I've ever heard about, but that's so, that's so, that provides a lot of focus, right? It's just, you have to just get from point A to point B and then you're set up from there. Awesome. So, and then we kind of touched on a little bit the 4 decisions to help your company grow. So the first one was regarding the cash planning and tracking that dollar. When does it come back to you? Let's talk about some of the other 3 major decisions that will help your company grow.

So probably the most valuable decision to make that people underestimate a lot, especially when you're in the startup phase, is your people. You know, the focus on getting the right people doing the right things with clear accountabilities and metrics, because there's nothing more killing to a business than having the wrong people on your team or having them positioned in the wrong places and then trying to build something together. It just, it doesn't work. We've seen it a lot of times and, you know, your people, I always say, are your human capital. We're always trying to find, you know, outside capital from investors, but the, you know, the human capital that you have in the business is going to decide usually what value these investors place on your startup. They don't really look at, you know, is your business model perfect? What they look at is, are the people in the team able to make it work? And that's usually what makes them decide on going with you versus another company. And the second one is your strategy decisions. If revenue is not growing as quickly as you'd like, then it's time to reexamine your strategy, i.e., what are you selling and to whom? That's what I've kept saying over and over again. It's going to keep coming back, you know. It's important to have a concise articulation of that strategy so that you can— so that everyone can get aligned and on the same page without wasting sales or operational energies on activities that are not useful to the business. So, again, if you have a strategy that focuses on a certain target group or getting a, you know, kind of certain type of people out, you do not want to divert from that. And you want your strategy to be so clear internally that everybody every day is working to achieve those goals that are set inside those strategies, in that strategy. And so what you really want is you want it to be so clear that if you ask you know, the cleaner in the company, what is our strategy for 2020 that he knows and he understands. That's how clear it needs to be because anything more complicated than that, you'll probably find people spending time, your precious time within the business doing things that are not helping you execute on your strategy. And then the execution decisions. So challenges surface when you're increasing revenues, and they're not generating increasing profits. So I've seen many firms triple their revenues, you know, and because they've capitalized on a differential advantage, they only see their profitability drop because of the sloppiness of the execution. So I always say revenue doesn't say jack. You know, there's a lot of buzz about, you know, we make this and this and that, and when you look you know, when you calculate and look back, those— the companies are either making a loss or not a lot of profit. And so your execution is very important. And the other indication of poor execution is the pure hours spent delivering your products or services. So when execution is haphazard, the organization has to rely on the heroics of their people. Putting in a lot of extra hours just to keep the wheels from falling off the organization. By simply tightening up your execution habits, you can dramatically improve your gross margins and profitability while reducing the time it takes for everyone to complete their work. And so for this, I actually recommend Googling the one-page execution checklist to help with this.

I love that. I feel so inspired already because I agree that there's so much, especially with the strategy point, you know, that having that clear North Star that's across your entire company makes a huge difference in getting people, keeping people engaged and also getting the most out of your human capital without burning them out. Right. And keeping people very clear. That's awesome. I love that. And kind of along those lines, Strategy also drives a lot of KPIs, right? It should drive all of your KPIs. So is there any advice for founders sort of determining the right KPIs for their companies? That's something that I have a lot of conversations with founders about. And really, I think it comes back to strategy, but I'd love your thoughts on that.

Right. So I think that for the longest time, especially if you've learned about KPIs from business school, you know, we're probably so wrong about how we're doing it. And, you know, it's probably taught by teachers who also learned it in a book and they haven't actually ran a business. Because what happens in practice is that your KPIs should every day for everyone add to— it would bring you one step closer to reaching your goals. And so in the scaling up methodology, we call it, you know, working towards your BHAG. Which is your big, hairy, audacious goal. And so though that BHAG that projects, you know, where you want to be in the next 20, 30 years or 10 years, it's going to help you work back what needs to happen in the next 10, in the next 5, in the next 3, in the next year, in the next quarter. And what happens then is that you will be able to set quarterly and annually annual KPIs for your team. Because once you understand where you want to be in the next 10 years, it only makes sense that you are able to work back the steps that needs to be taken. And so when you are defining your KPIs for individuals, so it should really be attached to the role in the company and not to a person. What you see a lot of times that, you know, for you, your KPIs are get that many sales and get you know, that many calls. And those are really counterproductive because what happens is that you will have people just selling anything and you'll have people just calling their friends to get their numbers up. And you don't really have anything that is adding to your business. And what you actually want to have is that out of the, uh, at the end of the week, um, you will have had 16 valuable conversations that— and with valuable, we mean that exactly what it means. And then, you know, at the end of the, at the end of the quarter, out of those conversations that you've had every, every week, the 16, you have converted 50% into customers, and then mention the specific, you know, service that you mean. And so this helps direct people into the making the right steps. And it also gives people a lot of autonomy. And people work very well when they have more autonomy, when they have the freedom. Instead of you telling me how to do it, just tell me what you want, right? And I'll get it done. And that usually works much better. So the KPI really should be transformed, I believe, in getting it to focus on the outcome versus what are the steps that you need to take on a daily basis so that we know that you've done your calls. Like, I can have one call today and close a sale that is going to bring $100K, Or I can do 50 calls today and bring in nothing. Which one do you want?

Right, absolutely. So clear goals are so, so important to keeping people motivated, especially at the early stage, right, where you don't really have management layers. You just have, you know, people executing all the time.

Exactly.

Wonderful. Okay, so we've got some questions from the audience pouring in here. Let's start off with Ferrari said, how do you maintain focus and discipline during COVID-19 when the need to pivot is the priority?

So actually, you've said it. You know, if pivoting is your priority, then focus on that. Don't try to also run business as usual. So that would mean— and I love this example. I've used it a couple of times, but I'm so proud of the company that ScaleUp Company helped recently in the Netherlands where they— this is a company that makes about, you know, their scale-up make about €2 million in revenue. And their business is delivering corporate lunches. And so COVID happened, and now you don't have offices to supply to. So their business went from $2 million to zero on Friday. And so by Monday, they need to have a new business model. And what they did is they were not going to try and figure out, oh, you know, how can we survive the next few months without customers? What they did was, okay, What can we do either with existing customers or with new customers? And that example is that they actually decided to call all of their corporate clients and say, look, your people are working from home, right? Let's deliver their lunches at home. So that was the one thing. So they kept their revenues, all their customers complied because that's, you know, something to— you don't want to miss that. It's something that you want to keep your people motivated. It's a win-win for everyone. And the second thing they did is now that everybody is working from home, you have more families at home struggling, you know, to keep their kids and everybody entertained and fed because now you have to do more groceries because everybody's home all the time. They started marketing also and allowing households to order these lunchboxes. And so what happened is that not only were they able to keep their existing customer base, they actually tapped into a new market. Increasing their revenues. And so I would say focus your entire process on that pivot. What does it mean to pivot? And make sure that that's what you are going to be doing for the next, you know, 2, 3 months.

I love that. What an amazing story and what an amazing pivot, right? Like, how can we get food into people's hands who work for companies and really kind of going back to that basic concept and saying, how can we reimagine that in the time of COVID Awesome. Jessica asks— hi, Jessica, I know her.

Hello.

She said, is there a general rule of thumb that businesses can follow to get them prepped for true scale? What are the core things a business needs to have in place to get them ready for hockey stick growth?

I like hockey stick growth. So I think it all boils down to Having your knowing what you're focused on for the next year, 1 year, and 5 years. What do you want to achieve? It all starts with being able— you need to be able to— you need to have so clear for the entire organization where you're going and how you're going to do it that it fits on 1 page. You know, we are such a fan of getting, you know, 50 pages, you know, of McKinsey or Deloitte consultancy firms telling us, you know, this is how you're going to run your business. And that, I mean, who do you actually every day go back to your 50 pages and go like, okay, so we're in page 55. Like nobody does that. They're like, we are just running our operations most of the time. And so what you want is that it is very clear again for everybody every day where we're going, why today you are doing the activity that you are doing today. And so that means having your target audience very clearly defined. That means having your team in order. Who do I need to service these people and to make sure that this product actually launches or works? And then thirdly, what are the habits or the activities that I have to do every day, every week, every quarter to get to those scaling growth targets that I've set? So those three things.

Awesome. Thank you. That's super actionable and amazing. And hopefully that helps Jessica. Cindy asked a similar question, which is she specifically— they're wondering, finding it hard to find the blockchain tech technical skill I need to hire for my product development. Do you have any advice? And I would say a little bit broader as it applies to everyone is when you know you need very specific talent, how can you— and people are so important. Any advice for hiring at this early stage? Right.

So if you know, so a lot of the times what happens when we are struggling to find specific talent is because we are probably limiting the, what we are looking for to what we think we need. So, and what I mean with this is that if, and we see a lot of corporations actually do this, right? They think they need somebody with an MBA plus 10 years. When actually they probably need the 10 years, but the MBA could also be a BA. And so what happens is that you're disqualifying the person based on metrics that probably won't work. So you need to look at who fits the culture, who could potentially grow my business with me. And looking at those, when you start looking at it in that way, what you see is that your— the vacancy that you're planning to put out changes a lot. 'Cause now you're just looking at what do I actually need? So in terms of, you know, does the person really need to be a blockchain expert or can I offer this person, you know, a certain schooling and training on the job because he already possesses the rest of the skills that I need? And so it, you can, what we are usually trying to find is, you know, that sheep with the 10 feet, we say it in Dutch, which is like the sheep that can do everything. And it doesn't work. You know, you're not going to find it. If you do find it, let me know. But I think that overall, we need to start working— it's not compromising really. It's actually looking at how do I find the best fit? And the best fit, again, does not have to mean the person already possesses all the qualities or skills that you need, but the person has potential to grow in those.

Absolutely. I love that. I love the sort of emphasis on soft skills or sort of like inherent skills, like curiosity and an ability to learn quickly versus looking at, you know, something that could be taught, you know, that could be learned.

We see it all the time. Like we graduated and then now we're applying for all of these jobs that are asking us to have all of this experience, but they're not giving us a chance to get that experience and it's just like, where do I go from here? So then you start working at Burger King. So it's like, you know, it really is, I think for us in this generation and in this time, we have the opportunity to change that and actually showcase that, you know, it is far more important to hire people that are best fit, that can build something with you and can grow in the areas that they're not perfect in yet.

Absolutely. Awesome. And so we're going to get into some funding questions now, which we knew would be a big topic for the day. Lauren asks, how should African Americans and other underserved communities work through bootstrap and friends and family funding rounds, given that for every $100 of wealth a white family has, a Black family only has $5? Right.

I love that question because it's so true. There's a huge discrepancy with that. And a lot of the times you see that generational wealth has a lot to do with the success of companies and people founding companies and opportunities that you have within your network. So I mean, I'm Black. I'm not African American, but I'm definitely from African descent. And so for me, it applied, you know, the same thing applies. And it actually brought me back to the very first company— company, business that I started, which was an online store. And I remembered very well that I decided for myself, I told myself, you're broke, realize that, but you're still going to make it work. So how can I make this work? Am I going to push for different— am I going to negotiate differently with my manufacturer? Am I going to look at what are other ways to get, you know, credit if I can't get it at the bank? And so knowing that, you know, I couldn't just get a grant or a loan from my parents. So what happened is that I was able to look at my bank account differently and say, you know, all these small €5 lunches and coffees that I'm doing could potentially go into my business. And so I every day with a suitcase would pack in my orders with a travel bag, walk to the post office, and deliver all the orders myself because I realized that, you know, the shipping was going to save me. Shipping was going to save me on transportation costs. It was going to save me a lot of money. And all of that money was adding up to the profit that I was making. And so bootstrapping, unfortunately, if you are from an underrepresented group, means that you have to make these kind of decisions. That are tougher, that are harder. But it does work if you persevere because I was able to sell that company and with having serviced over 1,000 customers. I only had it for a year. And so I really made a conscious decision that I was going to put every dollar that was coming in into that business and try to make that work.

Absolutely. And I think something we're going to see start to change too, Lauren, is this concept of more crowdfunding campaigns and opportunities for people, equity or rewards-based, be able to— there's been some stigma on them in the past, I think, for certain VCs, and I think that that's going to start to evaporate as people, as we realize, like, this is a necessary form for people to be able to get through the bootstrap and friends and family rounds and be able to do so and create more equity within the startup landscape. Do you have thoughts on that too, Kimberly?

I actually love that you mentioned the crowdfunding because, well, at the time crowdfunding wasn't a thing, but now you really see that, you know, we recently had a prominent African American lady make history on a crowdfunding platform raising millions of dollars through crowdfunding for the first time and for her business. And so it's all about, okay, you know, that was not her first round, granted, but she did well the first time as well. And so what I'm trying to say is that there is a lot of opportunity now to get people to believe in your product. It's all about storytelling, really. You know, we have more people connected to the internet than ever before. You are able to get your message across to more people than ever before. And so it's really going— it's really also dependent on how are you going to tell your story? How are you going to inspire people and feel that people are going to be connected to a certain cause? Because people, one, they either give to people or they give to causes that they believe in. And so if you can tap in ideally both, but at least one of those, I think crowdfunding is an excellent opportunity.

I agree. And I, one of the things I actually participated in one recently and what we, what you were funding was actually funding someone's job, which was a really interesting— so like the company was hiring a person and bringing them on full time. And that was a way for them to scale, but also a way for in this time of COVID when you know that, you know, a lot of people have lost their jobs, a way to give back to a specific, you know, person and to get them employed, which I thought was so interesting.

Right.

Awesome. Fantastic. So we touched a little bit on Simi's question, which was, do you support bootstrapping? And it sounds like you do based on your experience and what you've what you've done as well. Mark asks, social impact has traditionally been perceived as an added cost for an organization. Do investors see a new company with a social focus as unattractive because they aren't necessarily maximizing profit?

Sorry, can you ask the question again?

Absolutely. So social impact has traditionally been perceived as an added cost for an organization. Do investors see a new company with a social focus as unattractive because they aren't necessarily maximizing for profit?

Right. So I think that is changing, but traditionally, unfortunately, yes, that's still the case with a lot of traditional investors. You know, but I think again, it's so important for you to control the narrative around this. So it's all about how are you going to present what you are doing to showcase how this is actually helping you as a company to either grow in terms of your reach, maybe even adding to your revenue instead of taking from your revenue. So it's all about actually making that clear beforehand. And so I would probably refrain from saying, you know, we're this startup where we're big on social impact. You know, that probably doesn't work just yet. But what you can do is actually showcase how much it's helping your brand when you're speaking to these or presenting to these investors in your pitch deck or when you're talking, because a lot of the times they just simply do not understand how you have constructed in a way that is beneficial for everyone.

I love that. Yeah, I definitely think that we're in like the early stages of a shift towards more social impact as we start to see, you know, money needs to go into that and it creates added benefits for everyone. Ryan asked, kind of shifting focus a little bit to double-sided marketplaces, Ryan said, any thoughts on scaling a double-sided marketplace, any specific advice for somebody working in that space?

Right. Yeah. Double-sided marketplaces are interesting concepts because it could work very well and it could go horribly wrong at the same time. And so, because, you know, for people who don't know what that is, you know, on both sides, you are going to need to attract a customer of some sorts, at least a participant, And so Google is a very, very, very good example of this. People don't actually know that Google's business model is double-sided marketplace, which is they are trying to get as many users on the platform searching, using Google, using all of their services so that they are able to attract advertisers who are paying them, you know, to, and get more advertisements out. And advertisers find it interesting because there are so many people people on the platform. So that's double-sided. And I think that to scale, it really depends again on your industry. I think focusing a lot of the times, it feels counterintuitive, but usually you need to decide who you want to focus on, and it's usually going to be the free customer. So the person who's not paying for your service, that's where you want to grow first. And so then you are able to attract the paying customer or the service that is going to bring you in the actual revenue in terms of, you know, making cash payments or paying for having access to your audience. So, I would advise, as hard as it is, you're going to have to invest in the beginning into your product and service first without seeing the returns. And then once you have a stable, you know, user count and you are able to showcase that, Things will start rolling and you will start attracting those people that you need on the other side to make your revenue goals.

Awesome. And then Aman said, my startup focuses on in-person professional networking events. Should I wait for things to go back to normal or we're currently testing product market fit?

Okay. Well, I would love to ask you a counter question like, why is it specifically focus on in-person, but I think that in everything, question your strategy. That's the most important thing. If you are really servicing people in a way that cannot be replicated virtually, then perhaps you should wait. But it depends on your industry, depends on what service you're providing. And so I would test and try, and I wouldn't— I don't like personally to speculate. If I don't know something, I'm just going to try and see if it works. The worst thing that can happen is that it fails, right? And so that's— if that's the worst thing that can happen, you're going to be all right. So I would try to just focus on validating whether it really should be only in person. And if that's the case, then probably wait.

Great advice. Yeah, some companies can't help it, right? Like travel. That's the way right now. You know, there's, there's certain aspects that require waiting at the moment. But Keita says, can you please explain how to best build meaningful contacts and a network after COVID? I would also add during COVID because there are things I think you can do right now as well.

Hmm. So I don't know if I understand the question.

I think what she's asking is specifically, you know, building meaningful contacts and a network. So like any advice for, you know, sort of reaching out to probably customers, potential customers, and also investors, advisors, etc.

Right. So depending on the industry that you are in, I would look at, you know, where are these people that you're looking to connect with? What are they— what occupies their time and space? And so a lot of the times what we find, especially now, a lot of people are online. And so if you are finding things that are related to your industry that, you know, you know, if you have— if you're on LinkedIn, I recommend being very active on LinkedIn. It's amazing for your business. Look at what those people are posting that you are interested in. What are they liking? What are they searching for? And you may find it won't be something that you may do immediately. I don't recommend just saying, hey, hey, you know, how are you? But I would, which happens a lot, but I would definitely focus on getting, you know, valuable content that maybe you can share either on your timeline and then connect with somebody or recommend, hey, I saw last week you posted something about this. Here's what I read about that. What are your thoughts? Making it very personable and very relevant for them. And so use online platforms, definitely, Well, that's mostly what you can do now, but if you are in a country that has lifted lockdown, you know, you can also look at, okay, what are kind of the spaces that they move in and try to connect with them. I wouldn't necessarily put the big focus on COVID, but just simply on what do you have that is, that people can relate to and then connect based on that. People like to connect with people who they have things in common with.

Absolutely. Yes. And I highly recommend being active, like the networks that you want to build a year from now, you should have started building, you know, now, right? So I would like investor networks and mentor networks and advisor networks all need to be built now, even if you're at the very early stages and you're not ready yet, because those, those need to happen organically. Okay, awesome. So Vika says, is there space for the emerging tech products right now? So for companies that want to be cutting edge, given the change in priorities? How do we handle these situations? Which I think is implying like, how do we handle this, you know, global crisis and navigate through it?

Again, I think that we underestimate the power of how you position yourself. And if you are able to strongly come, you know, bring forth and convey people your story and your cause and what you're doing and why it's important even now, or maybe especially now. That makes a world of difference. You know, we are so focused on, you know, there's no money, people are tight on— that's true in some, some cases, but people are also keeping in a lot of money because they're not traveling, because they're not— there are so many things that they're not doing as well. And especially in terms of business, if you're, if you're in the business to business, um, you know, a lot of companies are now looking for ways to up to optimize their processes. They're looking at, you know what, this crisis really showed us that we don't have things in order. And if you have a service that might help them, this is the time actually to go knocking at their door because they are willing to spend on things that will improve their business. Always.

Wonderful. All right. And it's hard to believe, but we are almost at time. That went by so quickly and we got through as many questions as we could. But I would just ask, are there any final closing tips you want to share with founders at this time, Kimberly?

So I think, you know, like I mentioned in the beginning of this session, is that keeping in mind that we all know that having— founding a company and then building it to scale is hard, but perseverance goes a long way, focus goes a long way. And so a lot of the times what happens is that founders try to do things by themselves for way too long. And that's when you usually find, you know, lack of motivation, being demotivated because things are not working, it's not going fast enough, yada, yada, yada. I think that at the beginning, it is actually very beneficial for you to start hooking up with mentors and people. It doesn't have to be paid because usually you're tight on money in the beginning. But looking at people who can actually help you get through certain stages. And it could be, you know, somebody who's ahead of you at a time. You know, if you're not in a founder institute program, you know, look it up. I think there are so many ways that you can leverage, you know, the knowledge that you can surround yourself with and tap into that. Because I, for many a times, you know, when I felt like giving up or things are not working and then, I just called somebody and told them, and they're like, why don't you— and they're like, oh, I never thought about that. And that really helps you, you know, for another month or two. And so that I would suggest, you know, going because it's really not a sprint. You know, it's a marathon. It, you know, overnight success is not a thing. And so we think it's overnight, but when you look back into the stories of, you know, these founders that are successful, Firstly, you'll see that they started a long time ago, and then when they really decided to focus, things happened. And also remember that a lot of these startups that you see on the news may not be here the next 5 years. And so you need to look at your long-term goals and focus on that and try to just get closer by any means necessary every day.

Wonderful. Well, Kimberly, where can founders find you if, they want to connect with you and continue to learn from you?

Right. So I think I hinted a little bit in the beginning that I am also redesigning, redefining, rebranding with my business. And so for now, the best way to find me is either connect with me on LinkedIn. I love that. So Kimberly Ofori, you can look it up and/or send me an email, hello@kimberlyofori.com.

Wonderful. Kimberly, thank you so much for your time and your expertise. The founders got a ton out of it today, I can tell just by the chat. Thank you to everyone for joining us, and everyone, I hope you have a wonderful rest of your day and afternoon and evening. Thanks everyone. Bye-bye. Bye.