When we founded The Scale Factory eight years ago, my business partner and I were pretty clear we wouldn’t be seeking outside investment. Both of us were realistic as to how this would affect our pace of growth, but for us, self-funding was part of our identity.
We had the classic startup story. Two colleagues, in the pub, with an idea to do something new. We also got our timing right – devops was just starting to gain traction but was far from the global movement it is today.
Eight years on, we’ve seen peers start up, take large investments, and build ultimately less interesting businesses as a result. Of course, this isn’t the case for all VC-backed businesses, but there are some lessons to be shared.
1. Be financially restrained
Constraints are a virtue. Nothing will keep you on your toes like having no finance to fall back on. Self-funded startups and businesses have to focus 100 percent on delivering value to the customer, to create growth and drive revenues. This means relentless testing of product, hours spent on R&D as well as collaborating with partners on solutions or new platforms.
It creates a stronger, more compelling customer value proposition, transparent and trusted.
2. Use resources creatively
Very much driven by necessity, we see now how spending sensibly has shaped innovation when it comes to core business functions like marketing and recruitment. Instead of throwing money at recruiters to help build our team, I’ve invested both time and money into the devops community, attending and sponsoring events, joining panels and speaking. It’s been critical to building The Scale Factory into a powerful employer brand, organically and authentically. The investment’s paid off as we’re now in the privileged position where the best people in the industry come to us for jobs, strengthening our capabilities and providing a great experience to the client.
This has also complemented our marketing. It’s helped raise my profile in the space – and therefore awareness of the business - based on my expertise and leadership within the community, rather than a vanity PR play. I don’t like the term “thought leader” but this visibility helps with credibility and recently, I’ve won awards too. As we’ve grown, we’ve levelled up our marketing activity, sponsoring key industry events as a way of giving back, for example. It’s a strong message for our customers – and competitors.
3. Create a new business model
As a startup, based in Borough and outside of Silicon Roundabout, we had to find a point of difference to build the right team with the best people. To access the best and most affordable talent, we went against the industry norm, building a distributed team by hiring outside of London. Of course, clients need engineers on premise and we deliver to this but otherwise, our growing team works from all over the country. It means we’ve been able to tap into talent outside the capital, in what is a fiercely competitive market.
It’s completely influenced how we work. We’ve built a culture of inclusivity and collaboration to ensure our remote team members are as hooked into and embedded in the business as those of us in the London office. Our team members value autonomy, flexible working and collaboration - so we work hard to live those values.
4. Embrace workflow technologies
We’ve worked hard to develop robust and agile systems within our team, streamlining business operations using technology.
As a fast-growing business, this has meant ruthlessly eradicating pointless work, manual entry, paperwork and focusing on not duplicating tasks or wasting energy. We’ve adopted SaaS tools like Slack, Zapier, Wufoo and Xero, all of which improve the quality or efficiency of how we work together and with customers.
5. Be prepared to play the long game
As a self-funded business, grown iteratively, our vision goes beyond an exit strategy. Obviously we’d consider the right offer, but we’re not building the business in order to sell it - companies doing that tend to make myopic decisions, only beneficial in the short term.
Consistency, focus, investing back into the industry and being prepared to do things differently, means we’ve built the trust, reputation and leadership to take our business through that next, bigger growth cycle – on our own terms.