Confessions of a Scale-Down

Photo by Shalone Cason on Unsplash

You’ve heard all the exciting stages start-ups reach:

“We’re at the seed stage and are about to launch our game-changing tech”

“We’re running pilots and growth experiments to find product-market fit”

“We’ve just done our Series A so we’re now more of a scale-up than a startup”

These statements project confidence, excitement, all with the intent to show that everything’s going to plan. However, we all know that in reality things may not be so peachy. So if that’s the case, why don’t we tell it as it is?

Easier said than done. When I was growing Motivii, an employee feedback platform, I was always mindful that I might be talking to a future client or even an investor. The positive projection was key to getting them excited. I didn’t want to show any weakness or doubt I may have.

Though there are times when you need to project confidence, I’m beginning to learn that brutal honesty in certain situations goes a long way to improving how you connect to the person you’re talking to and may actually lead to a better result.

Over the past year, as Motivii struggled to grow, my approach changed. We’ve gone from a team of ten to just one… me! We’ve gone from almost closing a big round to no longer seeking investment.

Now when people ask me how things are going, I tell them where we’re actually at. Five years in, we’re struggling, and I don’t think we’re going to expand. Although we’re profitable, we’re not going to raise more investment, and in reality, we’ve probably reached our peak potential.

That’s why I’ve started to call the business a “scale-down”.

So what has this more honest approach yielded?

First of all, there’s the bad. When I started to open up I felt exposed and worried that people would view me as a failure. However, the responses I’ve received across the board has been brilliant and helped me understand that I’m not alone and by sharing this experience it can make me and the people I share with stronger.

Our investors have been amazingly supportive. They appreciate all the effort that I’ve put into the business over the last five years, they’ve suggested ideas on what to do with the business and people to talk to from potential buyers to new clients for my consultancy business.

Previous employees still talk highly of the business too. Though working at Motivii has been a bit of a rollercoaster, I was open with staff as the direction of the business changed, and I even helped them find new jobs! Being honest set the tone for good relationships across the business, even through the rough patches. We still help each other out now.

A funny thing happens when you start to open up. People around you start to do the same. When I started to talk openly about how Motivii was doing, start-up friends offered their support and even opened up about their own challenges. Sharing these confessions feels cathartic and results in new ideas and perspectives I never considered.

I’ve even started to open up to clients that Motivii won’t be “scaling-up”. Their feedback has been humbling. They’ve provided reassurance around what it is they love about the tech we’ve built, offered to do case studies, and importantly, renewed for another year.

So yes, I confess I now run a “scale-down” and the future beyond 2020 is uncertain. I now also run a consultancy X8IQ, with Motivii running on the side. It’s taken a little while for me to feel OK about working on something new, but opening up about where Motivii’s at helped me realise that I can be proud of what I’ve done, and the way Motivii has looked after its employees, clients and investors.

My final thought is that a business failure is not necessarily the same thing as a personal failure.

Maybe in the UK we feel that failure is really bad and that it’s a taint on your CV. Maybe that’s why we don’t like to talk about it, and it’s more normal to keep it bottled up in a corrosive way.

When talking to US friends, however, they look at business failure as a rite of passage. To summarise, their response goes something like this:

“Eamon, this is great! You must have learned so much from this experience. It’s really going to help you succeed in the next thing you do”.

I love this feedback and it makes me hopeful for the future.