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The Connector Podcast - Successfully Scaling Startups: Insights from Liesl at BBD on Sustainable Growth and Efficiency
Have you ever wondered how startups manage to scale successfully without falling apart? Join us as we welcome back Liesl from BBD, who shares invaluable insights into the transition from startup to scale-up, revealing the common pitfalls and how to navigate them. Liesl underscores the importance of moving beyond "just for now" technical decisions and adopting sustainable architectures and processes. Listen in to learn about conducting a comprehensive health check that delves into your solution's architecture, team dynamics, IT processes, chosen technologies, and user experience to ensure a smooth and successful transition.
In the next segment, we focus on optimizing scale-ups for maximum efficiency. Through real-world journeys, we illustrate how initial ideas can transform into robust, scalable platforms. Discover the significance of smart architecture, cutting operational costs via cloud solutions, and maintaining high customer satisfaction by deeply understanding their needs. We also touch on emerging trends in cloud management, financial operations, and security, offering practical strategies to prepare your business for sustainable growth and cost efficiency in the cloud. Don't miss this episode packed with actionable insights for scaling your startup successfully!
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Koen Vanderhoydonk
koen.vanderhoydonk@jointheconnector.com
#FinTech #RegTech #Scaleup #WealthTech
Welcome to the Connector Podcast, an ongoing conversation connecting fintechs, banks and regulators worldwide. Join CEO and founder Cohen van der Hooydonk as you learn more about the latest available trends and solutions in the markets.
Speaker 2:Welcome to another Connector Podcast, and today I've got with me for the second time Liesl from BBD and we're going to talk about some very funny things, some very cool things Proof of concepts and scale-ups in startups, something that we both like. Liesl, can you just introduce yourself one more time?
Speaker 3:So nice to be back again on the podcast with you, Kun. Always good to talk about one of my favorite topics. I do love the whole scale up space and, yeah, we're going to talk about some of the challenges that scale ups face today and some ways that maybe we can help them.
Speaker 2:Makes sense. What would you say are the typical challenges that a startup may face? What?
Speaker 3:would you say are the typical challenges that a startup may face. Yeah, so as startups move from startup phase to scale-up phase, they've already passed that initial figuring out what they're doing and they start to really demonstrate their ability to earn revenue and they're starting to build, and they're building at scale. But what generally seems to happen is, when they're in startup phase, most of their development would have been focused on just proving the concept, getting the funding being quite sexy, and now they have to move into a more robust architectural state, and what we tend to see is that in startup phase they do what we call, just for now, technical decision-making just for now.
Speaker 2:You have to explain me a little bit more.
Speaker 3:It speaks for itself, but I'm sure there's a little bit behind that as well there is. So it's the kind of decision-making where it's like we don't know if we're really going to scale. Why do we need to build things in if we're maybe not going to? So just for now, this is good enough, and then, as you move into the scale up mode, that isn't good enough anymore. And what we generally find the biggest thing is and it reminds me of a book I read many years ago which talked about brands being either fit, like a General Electric, or sexy, like Apple. You know Good examples, yeah, I think. In my opinion, what we find is that startups generally are focusing on being sexy. They need the funding, they want a cool app, whatever. But as you get into scale up to stay sexy best, you get fit. And I think this is one of the biggest challenges how do we turn our sexy POC into something that's going to take us into a phase where we can really grow, build and become a sustainable business now, rather than a startup?
Speaker 2:And what do startups need to do in order to get there? What would be the magic sauce?
Speaker 3:Yeah. So there's a lot of ways that we would think about addressing this, and one really good thing to do is a checkpoint at the time and do what we would call a health check. So say where are we now, where are we at in terms of our ways of work and where do we need to get to and what's missing. So in this kind of health check, which we think is a really great value add at this point, draw a line in the sand and say let's first of all look at the solution. Is the architecture suitable to scale the solution? Does it fit with what we need to?
Speaker 1:achieve.
Speaker 3:The next question is the people. So the techies, the engineers that we've got, and the scrum masters or the product owners is this now the right mix of people for that next stage, to get to where we need to get to? And then, of course, the processes the IT processes that we have in place. Are they robust enough, are they correct and fit enough to take us to that next stage? And then the tech of course, the chosen tech.
Speaker 3:Maybe in that sexy stage you thought you would use something really funky and out there. And now the decision is is that funky, out there tech really going to take you into the future? And, more importantly, are you going to find people, skills in the market that know that fancy, sexy tech that kind of was a good idea at the time. Often not. And then, of course, user experience. Have you got this user experience built into whatever you've designed? That is going to take you to a phase of scaling up your solution to another level. So for us, that is a very key tool that we think startups can use to improve the way they go from startup to scale up now we have been talking before and what I like before in our preparations.
Speaker 2:A lot of people know lean startup. It's very early days, but you mentioned the concept of lean enterprise. Is that exactly what you meant, what you just explained, or is that a different connotation?
Speaker 3:Well, what we really like to see is that we want to be able to manage growth effectively, and in this transition, you do need a methodology, and it may be lean, but you don't want to stick to a methodology to such the letter that it becomes restrictive, right? So you want a methodology that allows you to transfer your solution through the software development lifecycle, wherever you are in it, in a way that really allows you to get flow. And many startups do try and apply this lean enterprise, but what they end up doing is rather lean resourcing, meaning they're trying to take what they have and just be lean with that and focus on what they know they know, rather than thinking about like, what don't they know? They don't know what are the real things that they need to get in place. And what we like to do is work with product managers, engineering managers and figure out how we can scale and mature that technology capacity, focusing on lean but also focusing on the whole software development life cycle and technology resilience and operational resilience.
Speaker 2:In the very early start in this podcast you mentioned that you will also explain a little bit about yourself and what you provide. So I'm very curious now. You built up momentum, I guess, to understand, for the people to understand what you guys do with pbd yeah, so pbd is is a startup ourselves, in fact.
Speaker 3:I mean, we're 40 years in now, but we started as a a little startup, that became a scale up and and now, of course, we're a full-scale enterprise, but we still kept in our DNA the heart of scale-up and we still believe ourselves to be very agile and now as a global organization in five different countries with over 1,200 engineers across multiple disciplines Small startup.
Speaker 3:From a small startup right, can you believe? Four people straight out of university with one computer into this amazing organization. But we have kept the heart of our DNA being a small entrepreneurial business and we've determined to keep that. But what we've realized is, in our journey, we focused more and more on larger corporates, which is amazing, because we learn so much about innovation and the great things that banks and governments are doing, but at the same time, we end up delivering incredible value in the scale-up space. And it's something we refuse to give up on and, in fact, we want to focus more on is how can we keep on learning from the scale up space, adding value from things we've learned in our global business and big, small and tiny organizations, and how do we really curate that in a way that makes sense for us to keep playing neatly, nicely, effectively and adding value to scale ups across our value system.
Speaker 2:Liesl, can you provide us with some examples, perhaps?
Speaker 3:I can and we've worked with some really cool scale-ups. The one is called Element 22, and we helped them with their platform, which was called ESGI. They're a fast-growing scale-up in the ESG space and they had a proof of concept which had been built on a tight budget. It had limited functionality and it wasn't robust enough to work as a product servicing the number of clients that they needed to service. So we transformed that POC to become a robust platform of their ESGI and at the same time, we focus on how do we minimize their operational cost, and we did that by moving the platform to the cloud. We added some proactive monitoring and now we just have a small team of three that developed the initial platform, but they can now monitor it in just a couple of hours a week. So we've really enabled them to A-scale get fit but at the same time them to a scale get fit but at the same time manage cost. Another example is opus 2.
Speaker 3:This client provides services to the legal industry and they created an application for attorneys to mark up and classify the way their case documents were run. And initially they wrote it just for one company and didn't expect it to scale. But suddenly they realized, hello, this is interesting and appealing and the market really wants it. So they had to scale the application and they had to rethink their approach because they grew very quickly from two people to 50. And all of a sudden they needed more formal processes and that's what we provided for them. So we're adding that flow. We are right sizing that software development lifecycle. We're adding business pipelines to ensure funneling of the development process to them and then helping them scale as quickly as they can. And if you have time, I have one more. Yes, please.
Speaker 2:The magic rule of three.
Speaker 3:The magic rule of three, which is also an ESG wealth startup in Zurich called ThirdEyes Analytics, and we assisted them in enhancing the design of their user experience using some innovative UX design which they've then subsequently added onto as well, with their team and ours working together. And we also ensured that this new front end could seamlessly interact with their very complex data models, their very complex models which are predicting their calculation engines, and we've used our cloud infrastructure skills to help them to maximize that. And it's such a lovely partnership in all of these because we feed off each other's innovative sort of mindsets, but we also help them really optimize by leveraging our team's With talents across the world.
Speaker 3:So in all of these, clients our teams were sitting in India and South Africa and Europe operating with them, and it makes it kind of fun to run these sort of global teams and be able to add the impact of having people close by if needed, but also leveraging skills that we maybe couldn't find at a good rate, or even just not the skill in the local market Understood at a good rate, or even just not the scale in the local market Understood.
Speaker 2:I'm actually glad that you brought the third example because it leads me more. At the very beginning I thought technology is the key factor of change, but by the last example you also brought in people to the mix. Is there other ingredients that we're missing except technology and people?
Speaker 3:So there's so much that comes into the mix. There's, of course, technology, and we must remember it's often not even about the technology. So often scale-ups technology is their secret sauce. But if we're not clever about the technology, you just become, like everyone else, a big mess of spaghetti because you haven't architected well for the future. So technology we often assume is like a tick and scale-ups have it under control. But that's a big secret source.
Speaker 3:Operational efficiency is an important secret source. So to scale while still maintaining that efficiency can be really difficult, because now, all of a sudden, you need processes and infrastructure to avoid bottlenecks and inefficiencies, and we love doing this kind of work. This is the type of thing that really gets us going, because technology by itself doesn't solve the problem. It's how we define that technology, how we automate efficient processes, and that's about smart people, smart processes and the right technology, the most pragmatic technology for the need. And the other piece is customer satisfaction. So what does your client actually want? Are they looking for? What is it they're looking for? And if we don't understand the level of customer satisfaction that you need or what the client base wants, then we're not building the right product or service to meet that need and that's a very important one that we take into consideration is how do we make sure that we're really meeting that customer need through the tech, through the people, through the way we're building the solution together?
Speaker 2:Interesting, as we're actually going along on this podcast and moving almost, almost towards the end of the podcast. Time is always flying when you're having fun, they say. I'm just wondering because you're obviously very knowledgeable about scaling. You have done it for many, many years with many, many people and many, many companies. But what do you see as the emerging trends? What do we have to be aware about?
Speaker 3:Yeah. So I mean right off the bat, you want to say cloud, but actually most scale apps already cloud. You know native, they're born in the cloud, they're raised in the cloud. Everything is cloud already.
Speaker 3:But we are seeing that, even if you're in the cloud, it's one thing to run your infrastructure in the cloud, but have you prepared for sustainability? Are you managing financial operations, your FINUPS? Are you managing your security of your cloud? Are you controlling those costs? So we have a service where we manage those cloud operations. We're actually looking at all the elements to make sure you are getting the cost benefits from cloud, because if you're not, you're actually costing yourself more money than you should be. So I think there's a theme around cloud, specifically around operational and infrastructure efficiency. So your site reliability engineering, specifically, that's a big one. Of course, security, Because security is not something that's top of mind when you're building your POC. Why should it be? You're building something to look super cool, depending on what your solution is. Of course, if it's payments, it's probably a very big element, but security, then bringing that in at the end is a very big theme as well.
Speaker 3:And, of course, I mean we couldn't have a podcast in July 2024 or August today, actually and not talk about AI, Exactly, Exactly. So I'm thinking about the AI theme, which everyone is, of course, hot to trot. Everyone's talking about the AI theme, but are we remembering that to run models effectively means we have to run our infrastructure effectively? Are we getting that right and are we running our data effectively? So that's a massive theme for us making sure that the way data is stored, managed and transmitted is done in the most effective way and then ensuring that the infrastructure we have in place allows us to scale so that we can run these models, because they're so much bigger than what our normal tech would be doing.
Speaker 2:Earlier, you mentioned the concept of a health check when that moment comes, when you need to scale, but it almost sounds like there is a second base camp in which you have to do another health check. Is that something you help companies with as well?
Speaker 3:Yeah, so we help companies all through their life cycle. So you know, we love to do a bit of a health check. Just look under the hood, see how ways of work are going. But we also like to say what is your goal for your business and how does tech help you to meet that and how does tech help you to meet that?
Speaker 3:What we don't like to do is someone comes and says we want to do something with AI or we want to do something with blockchain or we want to do something with platforms. We'll be like, okay, fine, but what's the business problem you're trying to solve here? And then we like to do a process where we match business problem to most pragmatic, appropriate technology. And that may mean you keep the technology you have and we engineer it differently, we wrap it differently, we create some kind of a process flow around the technology you have, or it may mean we look at something completely different, but it's always how do we make an assessment point, a checkpoint of what we want to achieve versus what we have, especially to solve the business problem? So, yes, another thing we do is oftentimes we find, especially in the scale of community, because we just don't have enough engineers because we don't have enough budgets is we will have some technical debt.
Speaker 3:That's building up Things we should have dealt with that we haven't sounds familiar yeah, and that technical debt becomes a real problem, and so we actually have a team that will come in and look at that either the distressed piece of the project or their technical debt and just figure out how to wipe that off, this off the board, get rid of that, solve it so that you can move on effectively, because it just becomes, it's like you know.
Speaker 2:It starts small, but it can end up something extremely big and to be a showstopper for further growth. Exactly.
Speaker 3:Because your team is, of course, trying to run and grow. What they're not trying to do is solve stuff that should have been solved long ago. There's just no space for that.
Speaker 2:Let's be honest, it's also a luxury problem, because it's usually the case for companies that scale very, very fast.
Speaker 3:Yeah, it is a luxury problem indeed.
Speaker 2:Liesl, you intrigue me every time we speak, so I'm sure you do the same thing with the audience. So how can people contact you?
Speaker 3:The best way to find us is either how can people contact you? The best way to find us is either, you know, check us out on linkedin. You know, send me a dm on linkedin or go to our website, bbdsoftwarecom. Find us there or come visit. Come visit us either in our offices in utrecht or in johannesburg or cape town or pune or in london or porto. Um, yeah, come say hi, have a coffee. Let's solve problems together sounds very exciting.
Speaker 2:Liesl, thank you very much for coming here. Thanks, good.
Speaker 1:Thank you also to the audience and stay tuned, stay tuned more fintech news exactly, bye, bye, cheers, thanks, ken thanks for listening to another episode of the connector podcast. To connect and keep up to date with all the latest, head over to wwwjointhekonnectorcom or hit subscribe via your podcast streaming platform.