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For most entrepreneurs, delivering the right strategy can not only decide the fate of the business but also influence how and if a business can scale.
For Cape Town-based edtech startup Getsmarter, four years ago, a growing business necessitated a change in strategy.
“We were scaling up the organisation, that comes with its set of challenges. We needed to reboot,” said Getsmarter CEO Sam Paddock, speaking at an event held last week Thursday at Rise Cape Town.
Paddock (pictured above) said at the time the company “ended up hitting its own ceiling”.
“At 70 people, things were falling over, processes weren’t working as well as we liked them to. We didn’t know everyone anymore, not their names…” he said.
The startup which was founded in 2008 by brothers Sam and Rob Paddock now provides certified online short-courses from the world’s leading universities in 140 countries around the world.
By changing its strategy, the startup — which was acquired by Nasdaq-listed 2U six months ago — has been able to achieve 100% growth year-on-year and is on track to surpass even that in 2018.
“So often, strategy, and who we are and why (we) choose to operate and how we win, it lives in our heads, by ourselves — it’s lonely. But when we share it out with our colleagues and our family, with our friends at dinner party tables, with people in the industry, we can evolve it,” he said.
Here are some of the best tips we picked up from the founder — who describes himself as a “voracious reader” — as he shared his experiences around Getsmarter’s approach to strategy.
Focus on the human element
Serious about scaling your business? Then you might want to focus more on the people who are part of it — the employees. That’s what Getsmarter did.
“Human performance, precedes operation performance which precedes financial performance,” he said.
“So many of us are fixated on the financial points — ‘How do I get that up, how do i get that right.’ Often times we will say, ‘Oh it’s probably because we are not doing these operating things properly,'” he said.
“But not often as necessary do we go down to human level and say, ‘But you don’t operate without humans, and you do not produce finance without operations’,” he added.
“We had to go all the way down the cycle, look out to the humans in our business and then look very much inwards to the leaders of the business and say we need to transform,” he explained.
“Businesses are just people doing things, The challenge of business is to have the right people doing the right things, right,” he said quoting a book.
He added that having the right people is all about strategy and culture. In turn, doing the right thing, he explained, is also about strategy and doing the right things right is all about execution.
One of Paddock’s tips , the one page strategic plan, is a statement of strategy and a plan on how to execute it
The startup strategically chose to be “people mediated”, compared to the competition which is computer mediated. This, he said, led to higher-quality learning experiences and higher completion rates (Getsmarter boasts a 91% completion rate of its courses).
“That was seminal to us getting the likes of MIT, Harvard and Cambridge to take us seriously,” he added.
Partner with legends to grow
When Getsmarter started in 2008, the startup first signed up UCT, in what the CEO said “has been a very successful partnership”.
Thereafter, the startup went on to partner with two of South Africa’s top universities, Wits and Stellenbosch.
“We partnered with legends to grow, that’s our phrase,” he said.
Part of the company’s strategy around partnerships entailed working with universities on the cutting-edge of artificial intelligence, fintech and blockchain.
Getsmarter’s partners now include MIT, Harvard, Oxford, Cambridge and the London School of Economics.
Find capable mentors
“You’ll be surprised how many people if you approach them, will be willing to mentor you… highly capable people,” said Paddock.
He said a pivotal point for the startup was when in 2014, over a chance breakfast, he met an American educational entrepreneur, Dan Devine, who had sold his business for $600-million to Pearson.
The meeting culminated in the Getsmarter CEO and his brother spending two days with Devine at his home in Florida, where they got assistance with their business.
“My journey has been punctuated by access to people who took time and effort, and of course I was very willing and led the process, but they took the time and effort to give up themselves too. And he was one of them,” he said.
He said towards the end of the visit, Devine advised the brothers to read Scaling Up – Mastering the Rockefeller Habits 2.0, a book by Gazelles CEO and founder Verne Harnish.
He added that Devine also advised the brothers to “do 90% of what’s in there”.
“And it was such good advice,” he said.
Try the one-page strategic plan (OPSP)
It is from this book that the company adopted the methodology that forms the core of how Getsmarter operates — the one-page strategic plan. He said it changed the way the edtech startup operates.
The plan, which brings together the best thinking on how to run a business well, answers a series of conceptual strategic questions.
“The one page strategic plan is exactly that, it’s a statement of strategy and plan all on one page. The purpose of the plan is to have everyone in the organisation aligned around what it is you wish to do, who you are, where you wish to play and how you are going to win,” he said.
“And so often those questions as entrepreneurs, as scale up business people, we don’t spend the time really torturing them and really trying to get clear on what it is that we do,” he added.
“Once you know who you are, you then have a sense of who needs to be in your business,” explained Paddock. “The reasons why people come to work , your purpose of coming to work, that’s the answer to why the business exists,” he said.
He added that crucial strategic questions like where you play are underlined by market dynamics such as where the opportunities are as well as competitive influence.
As part of the plan, entrepreneurs are encouraged to list what they want to do in the next year.
“This changed our business. For every year, I can recite the annual objectives that got us to where we ended up getting to, they were crucial,” he said.
He also encouraged entrepreneurs to give every person in their businesses five 90-day priorities and to find out how they align with the rest of the organisation.
“That’s how we have 450 people pushing in the same direction, aligned to achieve goals that feel like they are far, far out of reach,” he said.
Conduct regular meetings
He also advised entrepreneurs to allow for regular meetings which, he said, not only allow for regular human interaction but are an important opportunity to fix misalignment and issues that may occur between teams.
He said Getsmarter employees take part in daily standup meetings with their respective teams where they share their “wins and losses” from the previous day as well as share that day’s priorities.
“It’s amazing what that does and how much email that frees up, just getting all that out of the way to start everyday. You walk out of the room aligned,” he added.
Practice ‘blackbox thinking’
Paddock also talked about the importance of learning from mistakes.
He elaborated on one of the lessons he learnt from Matthew Syed’s Blackbox Thinking. The book looks at how the airline industry has managed to achieve increasingly higher safety records by studying and rectifying mistakes.
“Every failure was a chance for learning — only when you really go in and dissect it,” he said.
However he said in business, few people actually ever take time to look at what went wrong.
He added that another author, Ray Dalio — founder and head of Bridgewater Associates, one of the world’s largest hedge funds — has come up with a formula to progress.
“Pain plus reflection is equal to progress,” he said.
“The most painful thing, but the most beautiful opportunity to learn, is lying in that failure — if you are willing to take yourself into that vulnerable, insecure, anxiety-provoking space of failure — that’s where all your learning is,” he said.
Featured image: Getsmarter CEO and founder Sam Paddock