When start-ups need to grow up | KPMG | BE
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When start-ups need to grow up

When start-ups need to grow up

When start-ups need to grow up

Young, agile and innovative, the start-up is everything that is exciting about modern business. The Kauffman Foundation estimates that one in every five jobs in the US is created by start-ups. Companies such as Airbnb, Facebook and Uber are seen, for good or ill, as the corporate titans of our age.

Between 50-90 percent of start-ups fail – usually, according to Fortune, because people don’t want the products or services they offer – but the survivors must adjust to changing expectations. As Emmanuel Faber, CEO of Danone, said in KPMG’s 2017 Global Consumer Executive Top of Mind survey: “There are things that consumers tolerate from smaller brands that they wouldn’t from other brands. When I say ‘consumer’, the reality is that all the stakeholders, including regulators, are inclined not to look closely at smaller brands, but as soon as it grows, it starts to face the same problems as bigger brands. Take class actions. You’d never get a class action if you are a $20m company in the US, but as soon as you become a $500m company, you can be a nice brand but you still get the class action.”

Five Key Learnings

  1. Be responsible for your own mistakes.
    When you have erred, admit it, apologize, rectify it – and do so quickly.

  2. Get the help you need.
    Few founders of start-ups – not even Steve Jobs – are expert in everything. Hire the expertise you need.

  3. Embed values.
    Start-ups that grow fast can lose sight of the values that foster a healthy corporate culture, so have strong, clear values that you share with staff. PepsiCo CEO Indra Nooyi has raised the bar on this, sharing ambitious sustainability goals, to be achieved by 2030, with employees, investors and the media.

  4. Fire your friends.
    They may have been among the happy few who founded the company, but they are not indispensable.

  5. Process counts.
    Innovators get the glory but as start-ups grow, process, structure and strategy are key.

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