Take ownership of business operations in the early days of your startup!
You might have just recently obtained your first institutional funding to launch your product and get it validated with your target customer audience. In turn, you are fully focused on product development and business operations and processes are not your top priority.
However, one of the most cited reasons why a startup fails is not just because the product does not fit well with their target customer audience, but rather that the business just runs out of time and money! This might particularly hold true if you operate a digital business across borders or a hardware business. Further on, if you manage well your business operations, it also helps you to prepare your startup for further growth & scaling resulting in even better investor attractiveness.
Hence, establishing well-defined and properly functioning business operations is key to avoid that your startup runs out of time and steams forwards as efficient as possible. With this in mind, we recommend making your business operations your hidden edge!
Nevertheless, it is common for startups in the first months and years to focus on getting the right people for the product and technical roles. The hiring of non-technical or non-product roles is often deferred to a later point in the startup’s maturity. This is particularly a given since there is no uniform understanding of job descriptions for operational leaders such as Head of Operations or Chief Operating Officers (COO).
By just looking at the various definitions for a COO, it becomes clear that there is only one common consensus that there is no consensus for a mutual job definition.
But wait, what are exactly business operations and what needs to be managed?
Of course, by talking about operational excellence, it is vital to define the term “business operations”. In general, business operations can be defined as a term encompassing the ways you operate your business, think about your strategy and eventually move your business forward. Ultimately, it comes down to the translation of your startup’s strategy and business model into actionable processes.
Business operations can be grouped by following categories which are closely associated with common corporate functions:
- Performance monitoring / business intelligence: Establish key performance indicator and metrics reporting for your internal as well as external stakeholders!
- Marketing & sales operations: Closely watch the effectiveness of your marketing and sales efforts to get as close as you can to your target audience both in terms of effectiveness and efficiency!
- Customer support operations: Ensure all your customer queries are recorded and handled in accordance with your agreed service levels as well as vital customer feedback is captured!
- Supply chain operations: Facilitate transparency and traceability across your supply chain and logistics setup (in particular if you produce physical goods)!
- HR operations: Build a smooth recruiting process as well as effective employee incentivisation policies to attract and retain great talent!
- Finance & accounting: Stay on top of your financial situation through smart business planning and cash management!
- Regulatory, legal & tax compliance and effectiveness: Navigate the jungle of regulations through a clear identification of requirements as well as compliance with reporting obligations!
Further on, to start off your startup’s business operations the definition of your operating model as well as your organisation design (roles, responsibilities, etc.) is required. This also becomes particularly relevant again if your business is up for international expansion or scaling. The business operations both in the aggregate as well as within its functional limitations are in constant flux and need to be continuously adapted to your startup’s stage or maturity:
- Product launch
- Finding product-market-fit
- Search for the repeatable and scalable business model
- Scaling
Since this constant search for efficient and effective business operations — in short operational excellence — requires a lot of focus, it should be a strategic key consideration for the leadership of your startup. Given the fact that your startup’s crew will be in the early days very much focused on product development and customer validation matters, it is important that aspects concerning the business operations are not ignored or neglected since they are key to the further corporate development and longevity of your startup.
When to bring in a COO / Head of Operations?
The above-mentioned reflections have outlined the role and the need for operational leadership and leave us with the question when to bring in an operational support or leader (COO) into your startup. An answer to this question has been articulated by the former COO Linda Kozlowski of Etsy, a leading e-commerce business for handmade and vintage items. She has defined three timings for getting on-board such a role:
- Hire immediately if you produce a physical product
- Hire when you reach product-market-fit if you build digital products
- Hire immediately if you as the founders are fully immersed in building the technology
How KSquared can support you
Reflecting on the above-mentioned quotes, it is clear to us that there is a true need for operational excellence for early-stage startups. However, the on-boarding of a full-time operational role like a COO / Head of Operations is not a fit to every startup at every point in time. That’s why we are firm about business operations support models which are tailored to the needs and financial realities of early-stage startups irrespective whether this comes in the form of digital tools or part-time support roles.
We at KSquared fundamentally dedicate our resources to the empowerment of early-stage startups. Through our Operations-as-a-Service (OaaS) offering, we facilitate early-stage startup’s strive for operational excellence in a hands-on, holistic and readily-available manner.
In particular, we can leverage our experience which we have gained from working in international business setups in the following areas:
- Pan-European target operating model design (incl. maturation strategy into a decentralised model),
- Effective organisation design (RACI model),
- Tax compliance and effectiveness (VAT and CIT),
- Legal & regulatory compliance (data protection, PSD2, etc.),
- Finance & Accounting, and
- KPI & performance reporting
Whenever we start the collaboration with an early-stage startup, we kick it off through a workshop (for free!) wherein we assess the current operations setup, identify areas for improvements and capture priorities.
Based on these findings we then like to dig into the search for digital tools and the drafting of standard processes to address the current operational inefficiencies. Through our bi-weekly workshop sessions and our availability for ad-hoc catch-ups we make sure that we stay closely aligned to the implementation and deployment of these measures and help the early-startups tackling anything which pops-up on the business operations side.
We have successfully initiated our OaaS services with a handful Zurich-based international startups, in particular with a strong focus on SaaS and hardware.
If our approach sounds appealing to you, feel free to get in touch with us today. We are more than happy to showcase our support capabilities and way of thinking at hand of a workshop for free: kevin@ksquared.ch
