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From Upstart to Unicorn: Leadership Lessons From the Growth-Stage Battleground



The evolution from startup to scale up boils down to one key attribute: leadership.

October 26, 2020 6 min read

Opinions expressed by Entrepreneur contributors are their own.

Entrepreneurs and VCs frequently talk about how the first phase of a company’s lifecycle can be distilled down to one singular goal: finding product-market fit. But what comes next? How does a company on a positive trajectory, with a product customers like and are willing to purchase or use, grow into a successful multibillion-dollar company, or, better yet, an enduring franchise? In my experience as a former operator who helped launch and run multiple businesses within and who now as a VC focuses exclusively on growth-stage companies, I can answer unequivocally that the evolution from startup to scale up boils down to one key attribute: .  

Related: How the Average Person Can Actually Start An Online Business (and Scale It Into Something Real)

Below are battle-tested leadership lessons in growth: 

1. Prioritize 10X hires, especially among leaders

When I first started managing, I was grateful for any member who was pretty good. Pretty good reports certainly added more value than I could alone. But then I brought on incredible hires, and my perspective completely changed. These stars showed me what excellence looks like. Technical circles often discuss the 10X hire, the employee whose contributions are 10 times that of typical employees. Too rarely do these discussions extend to business and managerial roles where the impact is every bit as dramatic. That said, never sacrifice team cohesion for a single hire, no matter how strong, if you believe the person will create discord. 

  • Business hack: When interviewing for a new role, especially in an area outside your core expertise, seek out the absolute best in the world that you can find. Sure, you may not be able to hire many or any of them, but chances are that at least a few of them will talk to you. Think of it as an informational interview, except in reverse. Let them show you what excellence is, and write your job description based on what you learn. 

2. Do your recruiting math

I once had to hire 150 people in three months. Several weeks in, it felt like nothing was getting done. The reason: Nothing was getting done. I asked my team why, and they told me to do the recruiting math. Sure enough, I whiteboarded their tasks and realized that each needed to work 12 hour days for the next three months–with no time to spare for their “day” jobs running the business. Since then I always encourage CEOs to do their recruiting math before setting recruiting goals. Growth stage CEOs typically spend 10-25 percent of their time on recruiting. Balance and careful deliberation are key; teams need to spend enough time recruiting to meet their most critical needs but not so much that they lose focus on the business.  

  • Business hack: Sequence out the most critical hires over a planned cadence, by, for example, hiring a new VP of engineering this quarter but pushing out the new marketing leader to the next quarter. This prevents recruiting overload, a common cause of executive burnout.

3. Throw new hires into the fire (always with water on hand)

I’ve seen too many companies successfully recruit incredible hires, only to fumble the next step. When you’re scaling quickly, becomes critical across all major business functions. Someone needs to be dedicated to it–frequently full-time. 

Related: A Breakdown of Every Major Social Media Platform for Business Owners

Connect new employees to the company culturally and emotionally. Best practices include buddy and mentorship programs, creative schwag (watermelon, anyone?), cross-functional team building activities and coffee (virtual for now) with the executive team. Onboarding also needs to include carefully planned information transfer. Managers should create and centralize key documents and introduce new employees to all stakeholders across the organization.  

  • Business hack: teams tend to have the most developed onboarding processes, frequently including experiential training, such as practice pitches followed by real-time feedback. This amounts to throwing them onto the fire–but not too fast because helpful coaching is also key. Newer teams can borrow onboarding practices from the teams with established programs and make adjustments as needed. Just remember that onboarding extends beyond the first week; check in regularly with employees after they’ve engaged with their new roles.

4. Customer obsession never goes out of style

Great companies, whether they’re startups or $100 billion-dollar brands, obsess over their customers. Strong leaders perpetually talk to customers directly, listen to sales and customer care calls, and ask for feedback from their customer-facing teams. They engage when they’re developing brand new products, and they stay engaged as their products mature. And customer obsession can’t be limited to the C-suite; it must permeate the entire company.  

Daniel Dines of rapidly growing enterprise-focused UiPath sets frequent flier records by circumnavigating the globe to meet with customers and sell them on his technical vision. Luis von Ahn of the popular language learning app Duolingo relies on extensive A/B testing to gather feedback from millions of customers simultaneously in a rigorous, data-driven way. Both approaches work beautifully, and both CEOs have successfully infused customer obsession into their companies’ DNA.  

  • Business hack: Require engineers and product managers to regularly listen in on sales and customer care calls. This builds cross-functional empathy and unites the company around a shared goal of customer success.

5. Don’t grow too soon (Bonus tip!) 

If you haven’t truly achieved product/market fit, scaling too early–and burning through all your hard-earned capital — is a sure-fire way to scale your company right into the ground. Timing is everything.

Related: 33 Inspiring Quotes About Achieving Your Dreams as an Entrepreneur

There’s an old saying that leaders are born, not made. In my experience, I’ve found that the greatest leaders make themselves. Unwilling to rest on their laurels, they’re voracious learners on a perpetual quest to help their companies reach their potential. Now’s your time to learn. Go forth and scale.



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The Trump campaign celebrated a growth record that Democrats downplayed.



The White House celebrated economic growth numbers for the third quarter released on Thursday, even as Joseph R. Biden Jr.’s presidential campaign sought to throw cold water on the report — the last major data release leading up to the Nov. 3 election — and warned that the economic recovery was losing steam.

The economy grew at a record pace last quarter, but the upswing was a partial bounce-back after an enormous decline and left the economy smaller than it was before the pandemic. The White House took no notice of those glum caveats.

“This record economic growth is absolute validation of President Trump’s policies, which create jobs and opportunities for Americans in every corner of the country,” Mr. Trump’s re-election campaign said in a statement, highlighting a rebound of 33.1 percent at an annualized rate. Mr. Trump heralded the data on Twitter, posting that he was “so glad” that the number had come out before Election Day.

The annualized rate that the White House emphasized extrapolates growth numbers as if the current pace held up for a year, and risks overstating big swings. Because the economy’s growth has been so volatile amid the pandemic, economists have urged focusing on quarterly numbers.

Those showed a 7.4 percent gain in the third quarter. That rebound, by far the biggest since reliable statistics began after World War II, still leaves the economy short of its pre-pandemic levels. The pace of recovery has also slowed, and now coronavirus cases are rising again across much of the United States, raising the prospect of further pullback.

“The recovery is stalling out, thanks to Trump’s refusal to have a serious plan to deal with Covid or to pass a new economic relief plan for workers, small businesses and communities,” Mr. Biden’s campaign said in a release ahead of Thursday’s report. The rebound was widely expected, and the campaign characterized it as “a partial return from a catastrophic hit.”

Economists have warned that the recovery could face serious roadblocks ahead. Temporary measures meant to shore up households and businesses — including unemployment insurance supplements and forgivable loans — have run dry. Swaths of the service sector remain shut down as the virus continues to spread, and job losses that were temporary are increasingly turning permanent.

“With coronavirus infections hitting a record high in recent days and any additional fiscal stimulus unlikely to arrive until, at the earliest, the start of next year, further progress will be much slower,” Paul Ashworth, chief United States economist at Capital Economics, wrote in a note following the report.


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Black and Hispanic workers, especially women, lag in the U.S. economic recovery.



The surge in economic output in the third quarter set a record, but the recovery isn’t reaching everyone.

Economists have long warned that aggregate statistics like gross domestic product can obscure important differences beneath the surface. In the aftermath of the last recession, for example, G.D.P. returned to its previous level in early 2011, even as poverty rates remained high and the unemployment rate for Black Americans was above 15 percent.

Aggregate statistics could be even more misleading during the current crisis. The job losses in the initial months of the pandemic disproportionately struck low-wage service workers, many of them Black and Hispanic women. Service-sector jobs have been slow to return, while school closings are keeping many parents, especially mothers, from returning to work. Nearly half a million Hispanic women have left the labor force over the last three months.

“If we’re thinking that the economy is recovering completely and uniformly, that is simply not the case,” said Michelle Holder, an economist at John Jay College in New York. “This rebound is unevenly distributed along racial and gender lines.”

The G.D.P. report released Thursday doesn’t break down the data by race, sex or income. But other sources make the disparities clear. A pair of studies by researchers at the Urban Institute released this week found that Black and Hispanic adults were more likely to have lost jobs or income since March, and were twice as likely as white adults to experience food insecurity in September.

The financial impact of the pandemic hit many of the families that were least able to afford it, even as white-collar workers were largely spared, said Michael Karpman, an Urban Institute researcher and one of the studies’ authors.

“A lot of people who were already in a precarious position before the pandemic are now in worse shape, whereas people who were better off have generally been faring better financially,” he said.

Federal relief programs, such as expanded unemployment benefits, helped offset the damage for many families in the first months of the pandemic. But those programs have mostly ended, and talks to revive them have stalled in Washington. With virus cases surging in much of the country, Mr. Karpman warned, the economic toll could increase.

“There could be a lot more hardship coming up this winter if there’s not more relief from Congress, with the impact falling disproportionately on Black and Hispanic workers and their families,” he said.


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Ant Challenged Beijing and Prospered. Now It Toes the Line.



As Jack Ma of Alibaba helped turn China into the world’s biggest e-commerce market over the past two decades, he was also vowing to pull off a more audacious transformation.

“If the banks don’t change, we’ll change the banks,” he said in 2008, decrying how hard it was for small businesses in China to borrow from government-run lenders.

“The financial industry needs disrupters,” he told People’s Daily, the official Communist Party newspaper, a few years later. His goal, he said, was to make banks and other state-owned enterprises “feel unwell.”

The scope of Mr. Ma’s success is becoming clearer. The vehicle for his financial-technology ambitions, an Alibaba spinoff called Ant Group, is preparing for the largest initial public offering on record. Ant is set to raise $34 billion by selling its shares to the public in Hong Kong and Shanghai, according to stock exchange documents released on Monday. After the listing, Ant would be worth around $310 billion, much more than many global banks.

The company is going public not as a scrappy upstart, but as a leviathan deeply dependent on the good will of the government Mr. Ma once relished prodding.

More than 730 million people use Ant’s Alipay app every month to pay for lunch, invest their savings and shop on credit. Yet Alipay’s size and importance have made it an inevitable target for China’s regulators, which have already brought its business to heel in certain areas.

These days, Ant talks mostly about creating partnerships with big banks, not disrupting or supplanting them. Several government-owned funds and institutions are Ant shareholders and stand to profit handsomely from the public offering.

The question now is how much higher Ant can fly without provoking the Chinese authorities into clipping its wings further.

Excitable investors see Ant as a buzzy internet innovator. The risk is that it becomes more like a heavily regulated “financial digital utility,” said Fraser Howie, the co-author of “Red Capitalism: The Fragile Financial Foundation of China’s Extraordinary Rise.”

“Utility stocks, as far as I remember, were not the ones to be seen as the most exciting,” Mr. Howie said.

Ant declined to comment, citing the quiet period demanded by regulators before its share sale.

The company has played give-and-take with Beijing for years. As smartphone payments became ubiquitous in China, Ant found itself managing huge piles of money in Alipay users’ virtual wallets. The central bank made it park those funds in special accounts where they would earn minimal interest.

After people piled into an easy-to-use investment fund inside Alipay, the government forced the fund to shed risk and lower returns. Regulators curbed a plan to use Alipay data as the basis for a credit-scoring system akin to Americans’ FICO scores.

China’s Supreme Court this summer capped interest rates for consumer loans, though it was unclear how the ceiling would apply to Ant. The central bank is preparing a new virtual currency that could compete against Alipay and another digital wallet, the messaging app WeChat, as an everyday payment tool.

Ant has learned ways of keeping the authorities on its side. Mr. Ma once boasted at the World Economic Forum in Davos, Switzerland, about never taking money from the Chinese government. Today, funds associated with China’s social security system, its sovereign wealth fund, a state-owned life insurance company and the national postal carrier hold stakes in Ant. The I.P.O. is likely to increase the value of their holdings considerably.

“That’s how the state gets its payoff,” Mr. Howie said. With Ant, he said, “the line between state-owned enterprise and private enterprise is highly, highly blurred.”

China, in less than two generations, went from having a state-planned financial system to being at the global vanguard of internet finance, with trillions of dollars in transactions being made on mobile devices each year. Alipay had a lot to do with it.

Alibaba created the service in the early 2000s to hold payments for online purchases in escrow. Its broader usefulness quickly became clear in a country that mostly missed out on the credit card era. Features were added and users piled in. It became impossible for regulators and banks not to see the app as a threat.

ImageAnt Group’s headquarters in Hangzhou, China.
Credit…Alex Plavevski/EPA, via Shutterstock

A big test came when Ant began making an offer to Alipay users: Park your money in a section of the app called Yu’ebao, which means “leftover treasure,” and we will pay you more than the low rates fixed by the government at banks.

People could invest as much or as little as they wanted, making them feel like they were putting their pocket change to use. Yu’ebao was a hit, becoming one of the world’s largest money market funds.

The banks were terrified. One commentator for a state broadcaster called the fund a “vampire” and a “parasite.”

Still, “all the main regulators remained unanimous in saying that this was a positive thing for the Chinese financial system,” said Martin Chorzempa, a research fellow at the Peterson Institute for International Economics in Washington.

“If you can’t actually reform the banks,” Mr. Chorzempa said, “you can inject more competition.”

But then came worries about shadowy, unregulated corners of finance and the dangers they posed to the wider economy. Today, Chinese regulators are tightening supervision of financial holding companies, Ant included. Beijing has kept close watch on the financial instruments that small lenders create out of their consumer loans and sell to investors. Such securities help Ant fund some of its lending. But they also amplify the blowup if too many of those loans aren’t repaid.

“Those kinds of derivative products are something the government is really concerned about,” said Tian X. Hou, founder of the research firm TH Data Capital. Given Ant’s size, she said, “the government should be concerned.”

The broader worry for China is about growing levels of household debt. Beijing wants to cultivate a consumer economy, but excessive borrowing could eventually weigh on people’s spending power. The names of two of Alipay’s popular credit functions, Huabei and Jiebei, are jaunty invitations to spend and borrow.

Huang Ling, 22, started using Huabei when she was in high school. At the time, she didn’t qualify for a credit card. With Huabei’s help, she bought a drone, a scooter, a laptop and more.

The credit line made her feel rich. It also made her realize that if she actually wanted to be rich, she had to get busy.

“Living beyond my means forced me to work harder,” Ms. Huang said.

First, she opened a clothing shop in her hometown, Nanchang, in southeastern China. Then she started an advertising company in the inland metropolis of Chongqing. When the business needed cash, she borrowed from Jiebei.

Online shopping became a way to soothe daily anxieties, and Ms. Huang sometimes racked up thousands of dollars in Huabei bills, which only made her even more anxious. When the pandemic slammed her business, she started falling behind on her payments. That cast her into a deep depression.

Finally, early this month, with her parents’ help, she paid off her debts and closed her Huabei and Jiebei accounts. She felt “elated,” she said.

China’s recent troubles with freewheeling online loan platforms have put the government under pressure to protect ordinary borrowers.

Ant is helped by the fact that its business lines up with many of the Chinese leadership’s priorities: encouraging entrepreneurship and financial inclusion, and expanding the middle class. This year, the company helped the eastern city of Hangzhou, where it is based, set up an early version of the government’s app-based system for dictating coronavirus quarantines.

Such coziness is bound to raise hackles overseas. In Washington, Chinese tech companies that are seen as close to the government are radioactive.

In January 2017, Eric Jing, then Ant’s chief executive, said the company aimed to be serving two billion users worldwide within a decade. Shortly after, Ant announced that it was acquiring the money transfer company MoneyGram to increase its U.S. footprint. By the following January, the deal was dead, thwarted by data security concerns.

More recently, top officials in the Trump administration have discussed whether to place Ant Group on the so-called entity list, which prohibits foreign companies from purchasing American products. Officials from the State Department have suggested that an interagency committee, which also includes officials from the departments of defense, commerce and energy, review Ant for the potential entity listing, according to three people familiar with the matter.

Ant does not talk much anymore about expanding in the United States.

Ana Swanson contributed reporting.


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