@TiEcon 2006: Make sure you don’t deviate from the path while scaling up

After the session on starting up operations, the next was on scaling up:
Atul Gabrani, Jt.MD, Tecpro Systems spoke about how clients were initially not willing to give them large orders, and the difficulty in attracting engineering talent. The investment helped them justify their business to clients and the workforce. Gaps were found while scaling up and their investors helped fill those gaps, particularly with Corporate Governance and MIS.
Taron Mohan, CEO of Phoneytunes.com said that investments were required to scale up fast. They moved to end to end solutions and run platforms for Airtel, BSNL and have operations in Bangladesh and Sri Lanka.
Ajeet Karan Singh of Baring Private Equity, who had helped build All Out said that building a second line of management and empower them. Trust them and live with their mistakes. Create a culture of cost consciousness, do system and process orientation and keep things simple: some FMCG companies require salesmen to fill up 25 forms a day; at their company, they simplified to a single form so the salemen could focus on doing sales.
Dan Sandhu, Chairman Vertex India said that the toughest questions for them came from the angel investors, and as much as they hated board meetings, they appreciated them a year later. “Make sure you don’t deviate from the path while scaling up”, he added.
Pradeep Gupta, Chairman of the Cybermedia Group, seated among the audience, asked about instances of companies burning out while scaling up. Some answers:
-a company did not select the right leader, and burnt out while trying to meet a large order.
– the founders were not qualified to scale up
– A company had cash, but poor strategy and lack of involvement from the VCs led them to burn up money at a furious pace.
What did Gabrani do when his company scaled up? Stopped treating that the company was their baby, that everyone was of the same culture. Started walking the talk and recruiting like minded people. He also stopped working weekends, which allowed him to “have bandwidth” in case of a crisis.
Key takeaways from the session:
– All about people, processes and systems
– Corporate Governance is essential
– Don’t be afraid of sharing the booty and scaling up
– Let go: empower and trust people
– Sharp focus, share with team
– Boils down to leadership and strategy

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