Fintech Scale-Ups: How to Master Resource Planning
If your fintech company has successfully validated its product, you are seeing a revenue stream and a growing customer base, and you are starting to plan for longer than say 3 months… congratulations, you’re now very likely a scale-up! In this new phase of growth, your company will be experiencing significant change as you look to scale operations and grow market share.
While planning for your startup was previously focused on looking at a few months at a time, scale-ups shift their thinking beyond that time frame. Amongst other things, it's important to anticipate your tech resourcing needs over the next 6-12 months (and potentially longer depending on your ambition) to ensure that you have the resources in place to meet the demands of your growing business/client base, and to secure further funding if you need it.
This requires a different approach to resource planning. Amongst other things you need to consider other elements such as culture, communication, and how you maintain that energy you had in the embryonic stages as your planning and hiring decisions will have a longer-term impact on your business.
The team at BrightBox Group has first-hand experience in navigating through these challenges and has honed their thoughts and advice on it with regard to the technical demands of fintech scale-ups. We also know the importance of selecting trustworthy resourcing partners and we have the battle scars to prove it.
Neville Roberts and Stuart Houghton, co-founders of Planixs, signing their first deal with a large UK bank.
During our first startup journey building Planixs, a now successful fintech business, our biggest challenge was in finding and working with a resourcing company that had been through what we were about to go through. Someone that understood what external parties (such as future investors) would be looking for in establishing a team, and who knew what it took to fuel a scale-up.
When speaking with fellow fintech founders we discovered that they all experienced the same challenge, and wanted more from a relationship than just a transaction.
So we set out to raise the bar, developing strong partnerships with tech resource in established and emerging markets, and designing innovative resourcing models to meet the resourcing needs of fintech companies like ours. This led to BrightBox Group and what you see today.
7 years on, and we are well-positioned to help you avoid the pitfalls associated with scaling up and finding the right people to grow your business.
The key characteristics of a scale-up
Transitioning from a start-up to a scale-up is a gradual and variable process that happens at different times for different businesses. This shift is usually prompted by increasing client or stakeholder commitments, or the next phase of the product or service roadmap taking longer to build out or evolve.
Changes that typically occur, include a shift in focus from establishing your product, to growing and scaling the business. As the business scales, you will be planning for more complex operations that require new systems and processes to handle the increased volume.
In the initial stages of company growth, it is common for team members to handle multiple responsibilities, despite being hired for a specific skill set. The expectation is that they will take on additional tasks as the need arises, requiring them to be a "Jack or Jill of all trades" to establish foundational strategies, systems, and processes. However, when a startup evolves into a scale-up, it becomes necessary to narrow down the roles of team members as the scope of their primary role grows with the business.
To scale quickly you might also need more funding and investment. Investors will consider multiple factors before funding your scale-up, one key factor will be the strength of your founding team and the quality of your management and capabilities.
It is no surprise then that at this stage of growth, there is a greater emphasis on leadership and management and this will require a shift in mindset and approach.
Scale-ups are all about building a winning team
The skillset required to lead an early-stage company differs from that needed for a late-stage one. We know from our own experience, that building a winning team is the key to success. The emphasis here is on ‘team’. When the number of employees grows, teams expand and new teams are created which may include a combination of new and longer-serving team members. It becomes increasingly challenging to manage everyone and maintain the unique culture that you cultivated at the startup stage.
Developing your team will require leaders to establish clear roles and responsibilities so that everyone knows what their contributions to the collective effort will be. Leaders will also be required to manage any teething problems as the company grows, ensuring that individuals are empowered, encouraged, and recognised and that a growth mindset is adopted as you and your teams navigate through growing pains. It is important that you and your department heads and team leaders foster trust and inclusivity, and that adequate coaching is provided as new team members integrate and longer-serving members get used to relinquishing some control when working in a growing team with more narrowly-focused roles.
Consider these factors when scaling your fintech
Although a lot of the factors you had to consider in creating your start-up are still at play, they evolve into a slightly different list that considers what a scale-up needs to fuel the next stage of its journey. Broadly looking at your scale-up, here are some factors that will require your consideration as your business grows.
Cash flow management
Cash flow management will be crucial for your businesses to overcome the financial constraints of scaling up. You will need to invest in additional capacity, which often requires advance payments that can tie up the business’s cash flow, so it’s important to plan for this. Failing to plan effectively can result in an imbalanced cash flow, which can stop further growth in its tracks. Review your budget regularly while scaling up to ensure it remains under control.
Scaling up too fast
Scaling up too fast can increase the risk of premature failure. It is essential to focus on your company's internal processes, understand its position in the market and set achievable goals to avoid the risks associated with rapid expansion. Instead of jumping to the next big thing, focus on streamlining current processes and improving the efficiency of the business. This will help your scale-up achieve sustainable growth without putting your company in danger.
Managing teams and avoiding burnout
A critical aspect of scaling up a business. Staff fatigue could hamper productivity and lead to employee turnover. You can restructure, and hire new staff based on a well-planned timeline to avoid making hasty decisions. You can also augment your teams with remote capacity which will give you the flexibility to scale your team up or down depending on demand. It is crucial though to find the right fit for the job, making sure that you or your team leaders give yourselves enough time to interview and evaluate candidates and ensure they are the right fit.
Managing compliance
Essential to ensure that you understand your legal obligations as your company size increases. Failing to comply with regulations can lead to penalties and fines, which can negatively impact your company's growth. Ensure that you and your department heads proactively manage compliance and that you are aware of any legal requirements and changes to regulations as you continue to scale up.
Trimming down as you scale up
Scaling up a business doesn't always mean growing in all areas, it also means recognising areas that are not contributing to its success and reviewing them. It is important to focus on being effective and efficient as the business grows, admitting when something isn't working. Your business processes may require transformation and automation which can also lead to streamlining of some areas.
All of the above helps shape the thinking on what is needed from your expanding team and how you approach sourcing the right resource for the right roles. There will be an element of some people still needing to fulfil multiple roles, but you will need to work out which roles take on a more singular focus and which in turn will establish the broader structure and processes from which to scale.
Finally, below are some of the aspects to work through when scaling your tech resource.
Consider these factors when scaling your tech team
Finding the right people
Hiring the wrong tech resource can have a significant impact on your business. Your hiring and resourcing decisions can also have a significant impact on your future funding. Additionally, having a solid and well-planned growth strategy, that includes a qualified team who are passionate about what they do, can demonstrate to potential investors that you are a good bet for future funding. Poor hiring decisions can result in a lack of technical expertise to drive innovation, difficulty in meeting customer demands, delays in product development, and decreased competitiveness in the market.
Competition for resources
The UK boasts a well-educated and highly competent workforce, with numerous prestigious universities consistently producing high-calibre graduates. However, the competition for high-calibre resource is intense, with many mid-sized fintech companies vying for the same pool of skilled workers. With limited resources and high demand for experienced workers from well-established tech firms, finding the right people for your team can be a daunting task. Nevertheless, it's critical for the growth and success of your scale-up. Partnering with a tech resourcing and capability company like BrightBox can provide access to a sea of dependable tech resource, both domestically and abroad, who have been pre-screened and possess the necessary skills and experience.
Being afraid to engage in remote working/nearshoring
Effective communication plays a crucial role in the success of an expanding tech team. While having all team members in close proximity can facilitate better communication and teamwork, it may not always be practical or cost-efficient. Remote working nearshore teams provide a more flexible and cost-effective solution, but it's crucial for a growing company to have the proper tools and systems to support effective communication and collaboration. Instead of limiting your hiring to a specific location, break free from geographical restrictions and prioritise skills and experience. This approach expands your pool of skilled tech resource and helps reduce resource expenses.
Offshore Vs. Nearshore for scale-ups
It is commonly believed that using offshore resource as a resourcing strategy is an efficient way to secure tech resource at a competitive price, but this may not hold true for scale-ups.
For larger enterprises, with highly advanced processes, documentation, and large established teams, it is ideal. Offshore resource work in a systematic manner and follow exact instruction. This method of working can make it difficult to establish a trusting and proactive work culture, especially if processes are not well documented.
Additionally, offshore resource partners face high levels of competition and high turnover, which can result in the need for frequent replacement of personnel working on your project. This can disrupt continuity and limit your control over the project. Using offshore resource for your scale-up also means that your team will be operating in different time-zones, making collaboration more challenging.
On the other hand, nearshore resources are a better fit for scale-ups, providing the technical skills necessary while also benefiting from the cultural crossover. Your nearshore team will also be working in time-zones closer to your own, leading to significant cost savings in the long term.
Lack of in-house expertise
Your scale-up might not have the in-house expertise needed for a scaling fintech operation. A hybrid resourcing model can be an effective solution. You might want to keep senior tech leaders in-house and source additional support from skilled nearshore resource with the exact expertise you are looking for. This hybrid approach to resourcing will keep your costs down, effectively scale your infrastructure, increase output and ensure business continuity as your company grows.
Retaining resources
Retaining highly skilled resource is critical for the success of your scale-up, and will greatly impact your ability to secure future funding. As your company expands rapidly, the close-knit team atmosphere where everyone knows each other's personal details and preferences can be lost in a team that is too big to keep track of. Keeping or evolving the company culture becomes a challenge, but it is essential to maintain a sense of unity and ensure that everyone remains committed to common goals, makes informed decisions in your absence, and feels valued and motivated to work.
Staying current with technological advancements
Fintech startups must stay current with the latest technology advancements in order to remain competitive. This requires a significant investment in training and development for existing technical staff which you might not have as an early-stage startup. Working with a resourcing partner, you will have access to a pool of onshore and nearshore resource with the relevant skills and experience you need.
How BrightBox Group Can Help
Having a key resourcing partner to advise you on your journey is great, but partnering with a company like BrightBox, which has first-hand experience and insight into what it takes to scale a startup is what can really give your growing business a competitive advantage and save on resourcing costs in the long term. Our unique approach to tech resourcing includes:
Customised resourcing models
Our innovative resourcing models enable fintech scaleups to benefit from cost-effective onshore and nearshore resources, –without sacrificing quality. Whether you need a dedicated team, a part-time resource, or a project-based solution, we have a resourcing model that will work for you. And because we have developed strong partnerships with highly skilled resource in emerging markets, we are able to provide you with high-quality resource, on time, every time.
Inside consultative approach
We don’t do one-size-fits-all, and we don’t do quick transactions. We are proactive and responsive, and we work with you as an extension of your team to support you with your short and long-term resource planning, ensuring you have the right team in place, now and long into the future.
Expertise in working with fintech who are scaling
As fintech startup founders, we have the unique advantage of having first-hand experience in navigating the challenges of tech resourcing. We know what to lean into, and we know what to avoid, being able to spot pitfalls and red flags a mile away.
Resourcing is a critical challenge for scaling fintech companies, we know this, we’ve been there, and as you can see, we have the battle scars to prove it. With the right approach and resourcing partner, it's possible to find and retain resource without breaking the bank.
If you're looking for a flexible, cost-effective, and experienced solution for your tech resourcing needs, get in touch here. We love hearing from you.
