David Ng shares his insights into strategy execution and scaling for startups, in a chat with Startup-O Stars.
David has had a long and deep association with the world of entrepreneurship. He has worked closely with entrepreneurs since the late 1990’s, predating digitisation, Industry 4.0, AI and automation at today’s grand scale. As such, he is well qualified with a wealth of knowledge, focusing mainly on strategy execution for startups.
As CFO in a media agency, David’s exposure to entrepreneurship ran the gamut of overseeing joint ventures, acquisitions, and earnouts. This vantage point allowed him to experience the entire life cycle from ideation to buy out. His involvement required him to deal with detail over and over – or what he refers to as “the day to day, week to week aspects.”.
From here, he developed a keen interest in strategy execution for startups, right from fundamental decisions relating to funding, staffing, cashflow to the equally germane aspects of setting up, like office space and logistics.
In spite of the huge technological change, the same fundamental human and business processes remain relevant. As all entrepreneurs will admit, resources are always scarce. So, in a nutshell, says David, “the basic paradigm is one of ensuring that you get the maximum return on scarce resources.”
This resource-based view should underpin the planning that must follow the initial ideation stage. Essentially, this is the stage of gap remediation, where the gaps are typically money, partners, and staff. This necessitates a process of granular and iterative planning to deploy scarce resources in complete alignment with the overarching strategic vision.
David has a helpful analogy in this regard. Bear in mind that the end goal is to build a 40-storey building, albeit in gradual increments. For this to materialise, the foundation needs to be solid, dependable and well-architected from nascency onwards. Ongoing awareness of this will help in deploying resources in accordance with a strategic bird’s eye vision.
An important corollary of detailed planning and resource deployment is monitoring of KPI’s that must be met or exceeded.
At the early stages, corroborating the value proposition of the product or service is paramount. This necessitates adoption by non-related parties, with the ultimate aim of a resultant commercial transaction, i.e. the beginnings of a revenue stream.
The next metric in this respect is customer loyalty, or whether customers return, repeat, or remain. Tracking these keeps the startup customer-focused, ensuring that their product or service is effective for their customers and that the story is being effectively sold.
Putting limited resources together with monitoring the right KPI’s will help ensure that resources flow into areas of strategic significance. David refers to instances where a narrowly focused team might divert resources to making tweaks that are not of strategic significance, departing from the overarching vision. In such cases, the product does not get in front of customers on a timely basis and goes untested – a clear example where execution departs from strategic vision.
David advises all entrepreneurs to keep their execution in very close alignment with their strategic vision, even on a highly granular week to week basis. Starting a week with 100 items on a to-do list is not uncommon, but keeping in close touch with strategic vision will allow for a forced ranking approach. This will ensure that the top few priorities are tackled on a timely basis; most often these should relate closely with product- and client-centricity.
An advocate of the Agile method of software programming, David advises entrepreneurs to adopt the same tenets, namely daily, weekly and monthly reviews that are targeted and candid. Taking stock as often as daily, of what steps have been taken and how they align with larger goals, is a critical aspect of execution and preventing drift.
A failure in the above steps is very likely to result in a plan becoming derailed by the minutiae of detail involved in each microtask. A useful visual is to bear in mind that entrepreneurs are engaged in building 1,000-piece jigsaws, whilst focusing exclusively on 2-3 pieces on a given day. “Remind yourself often that your energy is focused on one piece out of a 1,000-piece jigsaw,” David advises founders, “and always keep in mind what it will finally look like.”
Typically, over a 3 to 5-year time frame, a startup will gain a degree of maturity and confidence in their product. This is the scaling stage, of driving revenue growth, getting larger, and, David quips, “conquering the world.”
This is the stage that requires an increased appreciation of the complexity and a broader skill set for founders. Here again, David reiterates his high regard for the process, wherein the Agile principles apply – of continuous iteration and architecting from the ground up. He is a believer in building institutional knowledge from the outset, via well-documented processes that are then repeatable. Such design will help to maintain speed, consistency and leverage in a growth scenario, and should be planned for from the early stages.
David cautions against adviser worship syndrome in this regard, wherein often founders should ideally respect their own vision first. Whereas founders start companies based on a strong vision and belief, they are often also aware of gaps in their capabilities. Conversely, mentors have their individual backgrounds and often lack specific domain expertise. As such, seeking mentorship is a balancing act, wherein founders as domain experts should maintain the ability to override advice.
One positive factor in today’s burgeoning startup world is the entry of mature founders in relatively larger numbers than was historically prevalent. As large corporations are shedding headcounts in their thousands, we are seeing increasing numbers of executives with over 10 years of experience entering this domain, which David deems a positive development. Such founders are adding network effects and expertise to the ecosystem, and many are able to provide their own seed capital and a financial cushion. In addition, they are equipped with broader skillsets such as managing talent and teams.
The flip side to this is the importance of founders being coachable. Navigating a startup from ideation to scaling requires a diverse set of skills, and virtually no founding team is equipped with all that they need. However, at the early and mid-stages, founders have to undertake all tasks, desirable or otherwise. For this reason, coachability, albeit within reason, is a key trait that David looks out for in founders who hope to succeed in executing their idea.
Thus, for a mentor, it is important to adopt a more advisory rather than prescriptive approach. Mentors need to recognise that if a product or service is truly innovative, it has never before been done. It is therefore important to be cognizant of this and guard against historical bias.
David points out that today’s access to information is unparalleled, and insights, as well as raw data, are available to anyone who seeks it. The challenge, therefore, it to assimilate this data to maximise creativity and seek the best outcomes.
As for himself, David is an avid reader and stays up to date with industry trends via research & academic reports. In addition, he loves meeting motivated and passionate founders, who he says “cut through the clutter and embody the knowledge that is out there.”
Planning for growth is a balancing act between immersive detail and a bird’s eye view, and for a startup, walking this tightrope will enable deployment of resources in optimal alignment with strategic vision. With an appreciation of the benefits that strong processes and focus can deliver when building startup foundations, David continues to believe in the value of founders being proactive in broadening their networks and seeking to mentor on their perceived and unknown gaps.
Startup-O is South East Asia’s leading platform for startup assessments, investments, and venture building. It was created with ‘Entrepreneurs for Entrepreneurs’ ethos at the core of its design. The assessment platform coupled with venture funds helps with systematic discovery & investing in high traction tech startups. These promising growth startups are selected through a transparent process which is a blend of multi-stage online evaluations conducted by seasoned global experts & proprietary ranking algorithms on the platform.