3 lessons on ‘purpose’ from a billion dollar company

A couple of weeks ago, we had the privilege of hosting PEXA’s CEO, Marcus Price and CTO, Trevor Nelson, as a part of the Skalata Ventures Lunch Series.

PEXA is an e-conveyancing platform that enables property transactions to be completed online quickly, safely and simply. Before being acquired by Link Group for $1.6 billion in January 2019, PEXA digitised the settlement process, increasing the number of property transactions completed through its platform by over 300% since 2014. Over the course of the lunch, Marcus and Trevor shared their collective wisdom and insights gained through growing PEXA to where it has now transacted over $100 billion in property settlements.

The discussion focused on building a business, team and culture aligned in purpose and the power this can have in growing a network of stakeholders who become brand advocates and multiply the value created by the business.

Below is a snapshot of the key takeaways from the session.

1. Define the value you create by understanding your purpose

Reimagine the problem

Early stage founders can often lose motivation and be subject to short-term distractions if they lack clarity around their company’s purpose.

What your product does in a functional sense is different to why your company exists and the value it creates for stakeholders. It is critical that a company develops a narrative around its purpose, its value proposition and the milestones it aims to achieve.

An authentic and well-communicated purpose contributes to the success of a company by providing an analytical framework and values system for the business.

PEXA has signed up over 7,500 practitioners and 150 financial institutions to its platform, who conduct approximately 95% of all property transactions in Australia. One of the key levers of its success throughout this journey (the government had attempted to create an e-conveyancing platform twice before!) was in defining the company purpose and ensuring that it was embedded within the organisation’s culture — from leadership and management, down to individual teams, employees, contractors and its users.

Marcus noted that it was with this clarity that teams were able to measure and strive towards achieving the company’s goals to contribute towards its purpose.

How to:

Setting this purpose can only be done effectively if the CEO and founders dedicate the time to zoom out of the business and review their strategy, vision, mission, purpose and objectives.

At Skalata Ventures, we conduct a quarterly review of our 3–5 year strategic plan, along with an update on our objectives and key results (OKRs) depending on company priorities. We also make sure to refine our company narrative, communications guide and company overview pitch deck as we grow the business.

This provides visibility to the entire team about where the company is going, what needs to be done, and how we speak about the company.

2. Align the interests of those around you

“Use your network to build your network”

A lack of experience for most early stage companies means founders are often unaware of the importance of aligning their investors and customers with the direction of the company. They focus on achieving growth through any available avenue open to them without capturing the potential network effects available to them.

However, the stakeholders that you engage in the early days of your startup have the potential to become the strongest advocates for your business. That’s why it’s vital that along with defining your purpose, you take your stakeholders on a journey of where you’re going and the impact it will have for them.

This can be done through the sharing of wealth from the value created by the business or through an emotional or ideological investment in the business’ solution to a problem. For example, if an investor or customer believes in your company’s purpose and can see that the benefits they stand to gain are proportional to the success of your company, they will be much more motivated to help you find other investors or new customers.

The savings generated for banking members on PEXA’s e-conveyancing solution and the ease of operation increased as the number of transactions on the platform increased. This encouraged these members to grow PEXA’s network and even teach new members how to use the platform to generate more value from the product. This alignment of interests allowed PEXA to grow from its first transaction in 2013 to processing 70% of all property transactions in 5 years.

How to:

Customer discovery (the process of frequently checking in with your customers and refining your value proposition based on these insights) is an on-going process that shouldn’t just be reserved to the early-stages of a business. Whether you are 12 months in or 12 years in, it’s important that you are constantly revising who your ideal ‘customer’ is, what pain points they have and how you solve them.

More importantly, you should create a systematic process where these stakeholders can follow your journey through. One method is to provide regular company updates, monthly or quarterly, to all stakeholders about the milestones the company is aiming to achieve (and when).

These milestones can be related to product development, growth in users, revenue and transactions, employment and team updates and the consequences these items have on the value of the company and stakeholders in general.

3. Get buy-in from your team

“Make sure people in the company share in the vision and the value that you create as a company.”

It is critical that a company’s team and employees are invested in the purpose of the business if they are to exceed the expectations set for them.

While setting aggressive short-term measurable objectives and communicating how these fit with the long-term vision is necessary for motivating employees, trust also plays a major role in fostering a productive culture within a team.

Marcus noted that by creating a culture of trust and faith within PEXA, the team took ownership of their responsibilities, meeting or exceeding every objective set for them, and meant PEXA retained employees for longer.

Setting this standard starts by creating a great place for employees to work. For early stage companies there are a number of non-monetary initiatives that can be implemented, including:

• granting equity/stock options to employees to align the teams’ incentives in achieving the company’s vision;
• prioritising work-life integration through flexible working options, plenty of leave options, counselling and wellness days;
• allowing employees to pursue personal development opportunities;
• stopping to celebrate wins and major occasions together as a team; and
• extending their community to include the teams’ friends and family (PEXA holds Open Days where people can come into the office, meet the team and learn more about the business).

How to:

At Skalata Ventures, we develop this trust through a culture of transparency. Each team member was included in the creation of our vision, mission values and culture deck. In addition to ensuring the team is invested in our long term vision through our OKR and review system, we set aside time each quarter to collaborate on the future of the business as a team, communicating all activities and developments regarding Skalata as they arise (both good and bad!) and regularly scheduling social events to celebrate our wins.

Thinking about your own business, what problem you are really solving and for who? Reimagining the problem and focusing on the value that your company creates in a particular market are the first steps to building a narrative that resonates with your network and encourages it to actively support and contribute to your business and your purpose.

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