COMPASS MAGAZINE #10
COMPASS MAGAZINE #10

HIGH-TECH GROWING PAINS From systems and staffing to finance, founders of high-tech startups must master it all

Founding any startup is a challenge, but founding a startup in the rapidly changing world of high-tech takes a special measure of stamina and flexibility. To discover their common hurdles and strategies, Compass spoke to the founders of four high-tech startups about what they’ve learned and what they might do differently.

Growing a high-tech startup can be rewarding and exciting, but also frustrating and challenging. Small, rapidly growing businesses have agility and enthusiasm, but they also have restraints: too little capital, not enough people, and an organization that quickly outgrows the infrastructure available to support it.

The challenge is to evolve successfully while retaining the rare but highly valuable attributes that sparked a startup’s early success. To understand how they approach this delicate balancing act, we contacted Bo Burlingham, contributing writer at Forbes and a former editor at Inc.; Chris Rommel, executive vice president at US-based industry and IT consulting firm VDC Research; and the founders of four high-tech companies making the difficult transition from startup to established player:

 • Ben Stagg, CEO and co-founder of North Carolina-based Halo Smart Labs, which developed connected smoke detectors that can be networked into an early warning system for tornadoes.
• Jack Kutner, CEO of Massachusetts-based Bigbelly, which manufactures solar-powered and networked refuse containers that notify city workers when they need emptying.
• Syed Ahmed, CEO and founder of UK-based Savortex, which makes smart hand dryers that play video advertisements while monitoring foot traffic and alerting staff when a washroom needs servicing.
• Alan Weinberg, director of Marketing at Massachusetts-based Myomo, which helps people overcome upper extremity paralysis with myoelectric orthotics and services.

SUCCESS BEGINS WITH A PLAN

Every startup begins with enthusiasm and an exciting idea, but many forget the vital third pillar that gives a startup its stable base: a sound business plan.

“We spent years planning,” Ahmed said when asked about the “secret sauce” of Savortex’s early success. “We researched our sector for at least two years to understand the pain points, and then we embarked on looking at the market trends before launching our company.”

Even with a plan, it’s easy to get sidetracked, Weinberg said. “Realistically, plans are only predictable to a point, especially in product development and engineering phases. It’s so easy to get distracted. That’s not to say that new ideas aren’t worth investigating, but it’s about timing. Keep reviewing your strategic plan.”

An added benefit of frequent reviews, he said, is that your plan is already up to date if a new funding opportunity appears.

“ONE NEEDS TO ADAPT ONE’S TOOLS AND PROCESSES TO SUPPORT THE EVOLVING NEEDS OF THE BUSINESS, BUT IT TAKES A DEGREE OF SCALE TO MAKE THAT PRACTICAL.”

CHRIS ROMMEL EXECUTIVE VICE PRESIDENT, VDC RESEARCH

Burlingham said it is important to plan not only what to do, but to envision what success will look like.

“Many entrepreneurs don’t have a concrete plan where they’d like to end up,” Burlingham said. “They do things that have unintended and unplanned consequences down the line, and things start to happen that you don’t understand.”

THE RIGHT SYSTEMS SUPPORT COLLABORATION

Collaboration is easy when everyone shares the same vision and works in one room. As companies grow, however, degrees of separation naturally appear between those who steer the business and those who perform the day-to-day work.

When each employee can no longer have direct access to the founders, a company must make the difficult move from individual knowledge and ad hoc processes to institutionalized ones. But the low-cost tools that were practical in the early stages often don’t scale effectively.

“One needs to adapt one’s tools and processes to support the evolving needs of the business, but it takes a degree of scale to make that practical,” VDC’s Rommel advises.

At Bigbelly, Kutner said, inflection points to adoption were driven by organizational “noise”: sales teams complaining that it was difficult to place orders, for example, or customer service finding it difficult to manage customer satisfaction.

“One can’t just rely on gut feel or a belief that the right things will happen at the right time” when managing growth, Kutner said. “The business needed to move from anecdotal and qualitative to quantitative” decision making.

CHANGING WITH THE ENVIRONMENT

Automating outdated processes isn’t the answer, however.

“It’s pointless moving from cowpaths to paved cowpaths,” Kutner said. “One needs to create roads and pave them.”

Systems that are difficult to adjust to changing business priorities can be as bad as no tools at all, Stagg said. “One must find the right balance between sophistication and entrepreneurialism. Making sure we can run and monitor the business, while at the same time challenging the status quo ” is essential.

“Growth is a funny thing,” Stagg said. “It’s difficult and cumbersome at times, but it’s all about balance.”

FOUR HIGH-TECH STARTUPS

Myomo, Entrepreneur and Director of Marketing Alan Weinberg
Myomo’s mission is to enable individuals to overcome upper extremity paralysis by providing innovative, myoelectric orthotics and support services. The MyoPro powered brace can empower individuals with neuromuscular disabilities to perform functional activities at home, at work and in the community, promoting an improved quality of life, increased independence and lower health care costs. The Myomo technology was originally developed at Massachusetts Institute of Technology (MIT) in collaboration with medical experts affiliated with Harvard Medical School. In 2006, Myomo spun out from MIT and became the exclusive licensee of two patents behind the myoelectric technology. www.myomo.com

Halo Smart Labs, Co-founder and CEO Ben Stagg
Every new product innovation from Halo Smart Labs is subjected to one simple but profound question: will this save lives? One when the answer is ‘yes’ does it move forward to production. The singular focus on saving lives led Halo to produce Halo and Halo+, which the company describes as “the world’s safest, smartest smoke alarms.”

“It’s this focus that ensures we will deliver on our mission – to make the environment in and around every home in the world safer,” Stagg said. https://halosmartlabs.com

Bigbelly, CEO Jack Kutner
Bigbelly, founded in 2003 in Needham, Massachusetts, is a leading provider of smart waste and recycling systems that beautify public spaces while reducing environmental impact and operational costs by 70%-80%. With more than 1,500 customers in 47 countries, the solar-powered Bigbelly system combines waste-compacting and recycling stations with cloud-connected management software for real-time visibility, actionable insights and robust analytics for optimized, data-driven waste operations. Big belly currently has 55 employees. www.bigbelly.com

Savortex, CEO Syed Ahmed
Savortex Limited, which is backed by UK Trade & Investment and the Technology Strategy board and co-funded by Innovate UK, has won multiple awards as a green technology company, including a listing in Guinness World Records. Savortex designs, manufactures and supplies smart, advanced and environmentally responsible hand-drying technology for commercial washroom facilities. Savortex’s design and engineering capabilities and patented technology are transforming the hand-drying marketplace and contributing to the smart energy-saving revolution. The company, founded in 2007, has more than 10 employees and consultants. www.savortex.com

by Allan Behrens Back to top