Despite the travel restrictions in place, Takeoff Partners portfolio company Videoly has taken on the task of seeking growth in North America. It is working, and now the startup is opening an office in Toronto to take things to the next level.
By the time we had offices in 10 countries, I had to learn a new leadership style. While I recognized the need to delegate stuff, I found myself involved in rather small decisions. Quoting Jim Collins, I had to move from “time telling” to “clock building” leadership.
Boardman2020 is a Finnish professional network that focuses on developing board performance and entrepreneurship in Finnish growth companies. Takeoff Partners’ Managing Partner Markko Vaarnas is a member of the Board in Boardman2020 since 2015. In their article from September 2017, Boardman2020 introduces Markko Vaarnas as an active member of the Boardman2020 VIP member network.
Here’ Markko sharing his story.
Off the beaten track
Broadly speaking, I’ve had two different types of roles during my professional career. First, I spent 20 years as a CEO and Co-founder of a growth company, and more recently over the last three years, I’ve served as an advisor, Board professional and business angel for startups and growth companies.”
One of the defining moments of my entrepreneurial journey was
in 2003. Our company Global Intelligence Alliance, aka GIA was growing rapidly,
and it was time to make strategic choices regarding its future: Would we
continue to grow in Finland and turn the company into a dividend machine for
its owners, or would we rather start internationalizing it, undoubtedly facing
both lucrative opportunities and increased risks?
At that time, there weren’t many encouraging Finnish examples of successfully internationalized, software-driven service concepts. Yet we had noticed two things when visiting industry events overseas:
- No-one in the world had a similar business concept to ours
- The customer needs were very similar globally to what they were in the Finnish companies
We already had a large number of satisfied customers, so we had our ‘product’ nailed. We then decided to take a leap forward with Venture Capital support. We complemented our service offering, opened offices around the world, made acquisitions and created internationally scalable processes and tools.
Grow the company, grow yourself
By the time we had offices in 10 countries, I had to learn a new leadership style. My natural tendency is to dig quite deep into things, and while I recognized the need to delegate stuff, I often found myself involved in rather small decisions.
Micromanaging became virtually impossible when I had direct reports in Shanghai, Toronto, and Sao Paulo. I just had to learn to trust our key people and lead through our jointly agreed goals and regular sparring.
By 2010, our strategic growth investments had been made and our focus shifted to excelling in operations. From the company’s point of view, it made most sense to concentrate on increasing sales and the bottom line.
In hindsight, it would probably have been best to search a new CEO at that point who would have specialized in operative management and leadership. For myself, that part no longer brought much more additional learning and personal development. When you feel that you’re no longer learning new things, it’s hard to find the 100% motivation needed for the company anymore.
Nevertheless, I’m proud that I finally learned to delegate things to the extent that once we got to the point of selling the company, I only had the sales process development left as my own direct responsibility. In the spirit of the lessons from the leadership guru Jim Collins, I had moved from “time telling” to “clock building” type of leadership; in other words I had made myself unnecessary in the everyday operations.
Entrepreneur to angel advisor
When we sold GIA in 2014, the share of international business was 70% of the 15MEUR total revenue of the company. Our own ownership had of course been diluted, however it was clear that we wouldn’t have been able to reach the pace of growth and internationalization without the support from VC investors – and there would have been much less to share in the eventual cake.
Following the sale of GIA, I moved to my current advisor role where I’ve had the chance to get to know tens of companies, industries and business models. I’m constantly learning new things, and while doing so I can also share and pay forward the lessons and experiences that I have gained for the benefit of the entrepreneurs I’m working with.
In my own view, the biggest value-add that I can bring to the companies that I’m working with is that I can quickly spot the critical expertise gaps in the company. For instance, in our portfolio company MeetingPackage.com the level of ambition is so high that we needed very targeted expertise from different parts of the industry value chain already in the company’s early stages of growth. In the role of the Chairman it’s truly rewarding to observe the amount of knowledge and valuable contacts that experienced and networked Board members with different backgrounds along the value chain can give to the CEO of MeetingPackage.com.
Successful growth requires patience and preparations – and bold ambitions
Advising and sparring growth companies, I have learned that the quality of leadership and the level of commitment from the owners have a huge impact on the company’s success. Investing in growth is long term activity by nature, and one cannot withdraw growth resources from the management the minute that revenue growth momentarily levels out.
I strongly believe that the Finnish ownership culture needs more appetite for growth and controlled risk taking. I see situations way too frequently where a company is required to make profit even though its business model has not matured yet, and its operations are not ready for scaling. When we built GIA, we made a loss in almost 15 years out of 20. It didn’t matter for the buyer; what did was that we made a 15% profit the year the company was sold.