Want to lead a start-up? These are the skills you need
Embarking on the start-up journey requires solid business skills and a lot of stamina, but it also needs a certain kind of leader – someone with vision who can build a company to reach its full potential.
Start-ups aren’t for sissies, says Mike Quinn, CEO of Zoona, a start-up that helps communities thrive by providing technology, capital and business support to emerging entrepreneurs in Africa, enabling them to offer financial services to Africa’s unbanked consumers.
“A start-up isn’t just any new business,” says Quinn. “It’s a fast-growing entrepreneurial venture with the potential to reach scale. The idea is to build a big enterprise that will attract investment and achieve an exit. And investors are looking for an opportunity to get up to 10 times the return on their investment in five to seven years.”
Quinn says a start-up needs a few things in place at the outset.
“It starts with the founders and a team. You need the idea, and you need the commitment to spend 150% of your time building the business,” he says.
“Zoona started after a text message between two brothers with a solution to help people in Africa move cash. They knew their solution had huge market potential, and that they would need to give 150% of their time to make it happen. We then focused on building a great team and solving pain points for our customers. You have to first commit and then build capacity to implement.”
Strong leadership is essential, but start-up leaders also need to be adaptable, he adds, because as the business changes, the leadership skills need to change with it.
“In the early days, the founders have to be CEO, CFO, head of operations and head of marketing,” he says. “But they also need the ability to identify talent and get great people into the business when they have no resources – so they need to be able to persuade people to believe in their vision.
“Next they have to delegate chunks of the business to the people they’ve hired, and release those chunks. Start-ups with founders who don’t let go don’t succeed. And finally, you need the ability to sell your vision externally to funders so you can attract capital. You need resources to scale the business, so you have to be able to sell what it could grow into.”
There are many potential pitfalls, he adds, the first of which is running out of cash. “It happens a lot. When you are cash constrained, it’s easy to make short-term bad decisions that have a negative impact on customers and partnerships and slow your progress.
“And second, people pick the wrong investors. There’s always the temptation to take the first offer in front of you, but further down the line you realise there’s serious misalignment. You need to find investors who share your vision and values, and who aren’t going to push you in a direction you don’t want to go in.”
The most common mistake people make, he says, is hiring too fast and firing too slowly. “Start-ups are constrained by time. And if you don’t have the right people, it wastes so much time. Rather put in the time upfront and ensure you are getting good quality people.”
Quinn says working in Africa presents huge opportunities. “It’s a difficult environment, but the needs of consumers are great, and you can have a huge impact on lives and communities. Many people are poor, but they have the same problems as everybody else, and they’re prepared to pay for products that deliver value,” he says.
“In Africa, execution trumps the idea. You have to be on the ground and be able to navigate tricky situations. Doing business in Africa is about how well you can execute. But you can be very successful. Since launching in 2009, Zoona has processed over $1.2-billion in money transfers, created 1,500 agent enterprises and raised $23-million in investment.”
Quinn was a participant in the Odgers Berndtson 2016 CEO x 1 Day programme.
This article was paid for by Odgers Berndtson Sub-Saharan Africa.