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4
Apr

Taking the step up: Preparing your start-up for growth

 Taking the step up: Preparing your start-up for growthWhen David Hodges began a software start-up in Melbourne just six years ago, he didn’t quite imagine that the company would by now have expanded to the UK, the US and New Zealand.He simply identified a set of problems in the areas of field service and asset management, and tried to provide workable software-based solutions for businesses of every size.

David Hodges - Loc8

Photo credit: Samantha Sagona

Loc8 is the SaaS David founded. And it’s thanks to them that companies across the world over no longer track and maintain deployments of goods and assets via spreadsheets.

Grabbing opportunities as they’ve presented themselves, keeping an agile and ‘start-up’ mindset while becoming a larger organisation and ensuring that your team is happy both at work and at home are just three components that have allowed Loc8 to expand globally since 2013.

In fact, David states that one of the real problems for start-ups is making the fluid transition into bigger business. ‘There’s not a lot of discussion about how difficult it is to make that next step up — how to mitigate risk and juggle cost while keeping true to the values that made you a great place to work for in the first place’.

David sat down with us and gave us some advice on how start-ups can make sure they successfully grow their businesses.

How did you come to found Loc8?

David: We found out very early on that one of the main problems in the initial market (Australia) was that a lot of the existing platforms were very hard to navigate. Features such as scheduling, invoicing and asset management were done manually on spreadsheets. You needed very sophisticated technical understanding to do the job — the user experience for these platforms was just really poor. We saw an opportunity to create a simpler, more agile system. The challenge of solving this problem was what started it all, and we’ve just expanded from there.

And as we’ve expanded, we’ve learnt so much about different markets and their different needs.

For example, when we entered Europe, we found that the market was much more developed than ours. Many of the companies we were dealing with had already adjusted to field management software. They wanted more features at much more competitive prices. The systems they integrated with were also very different to those we use in Australia.

This has driven changes throughout the company and definitely informed our offering in Australia. For example, when we started out we tended to concentrate on customisation a lot more, but, given the challenges the European market presents, the conversations are now about configuration versus custom. We’ve had to change our focus.

Before, Australia was at the centre of the universe, but now it’s a juggling act to make sure that the direction we’re going in and the changes we’re making to the systems – the features we’re adding – will have value, without alienating our Australian customers.

David Hodges - Loc8

Photo credit: Samantha Sagona

What were some of the key obstacles you faced in getting the business off the ground and how did you surmount them?

David: I would say there are three key challenges to starting your business on the right foot. They include:

1. Cashflow (Keeping the doors open)

The key for any start-up is making sure you have the right amount of cash and getting the right people around you. It’s a real challenge to build software without getting that initial investment. If you want to attract investors, you really have to refine your pitch.

Something that was helpful for us was partnering with Clinton Capital Partners. Things really shifted for us when we teamed up with them. They helped to guide us through that journey and helped us work on refining our story. They also got us ‘out of the trench’ and helped us think about the pitch from an investor’s perspective.

Tech companies tend to talk in tech jargon, which can drive potential investors nuts! Instead of running away with the technology, I would suggest knowing your numbers inside out. Investors are very good with numbers, and it is immediately obvious to them when something doesn’t add up.

2. Attracting (and retaining) people who fit into the culture that you’re building

Attracting the right staff is quite difficult, especially in the tech space — you have the big companies who are great at doing that. So, as much as we could, we took our cues from them. We immersed ourselves in the tech world, we attended functions and got to know people within the industry and it went from there.

When we’ve onboarded great staff, we’ve made sure to retain them. We’re a family-first company, so it’s essential that we provide a flexible environment. When I started I was based in Sydney and the business was based in Melbourne, so from the beginning we’ve had protocols in place. For example, all significant meetings are done by video. And I think these protocols have strengthened as the business has developed. When we’ve sent people overseas, we’ve been able to grab the opportunity because our team understood how we work, understood our culture and how to work remotely. Having said that, remote working on such a scale can bring its own unique challenges, such as ensuring OH&S guidelines are upheld and that staff continue to feel connected to the business, but I think on the whole we’ve created a very flexible, happy workplace.

3. Developing an empathetic environment that fosters innovative service

This hasn’t been a challenge per se, it’s just a value that we’ve strived to enforce from the get-go. The environment of a workplace is largely driven by the management. An autocratic manager can create real issues within a team. It’s very important to me that all my managers take an empathetic approach. We don’t run a hierarchal management group. Ninety-nine per cent of the time I’d say we have a very flat structure, we argue things out; and because of that we get better solutions. When members of your team feel like they have a voice and that they have authority, they can produce amazing outcomes.

You won CeBIT's 2015 innovation award. What factors do you think drive innovation?

David: Innovation is driven at both an organisational and individual level through support, mentoring and money. It’s about taking the time to look at how something is done currently and thinking of a way to do it better. Innovation needs support from government and industry so that companies can have the luxury of trying things out and not necessarily being successful every step of the way. It would be great to have more infrastructure in place — physical spaces where different companies can come together to collaborate and learn from each other. The more we can do this, the more we’ll see some really great ideas turn into tangible things.

Loc8 is an exhibitor at CeBIT Australia 2017. If you’d like to see some of the innovative things they’re doing, or would like to learn more about how you can prepare your start-up for the long-term, you should consider coming along. You can register here.

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