Talent and diversification hold the key to fast-growth tech success

The UK may be a small coun­try, but it is a glob­al leader in tech­nol­o­gy entre­pre­neur­ship. Ven­ture cap­i­tal­ists, cru­cial to the start­up ecosys­tem, poured $13.2 bil­lion into British tech com­pa­nies in 2019, accord­ing to Tech Nation, plac­ing the UK behind only Amer­i­ca and Chi­na when it incomes to invest­ment in home-grown upstarts. Despite the coro­n­avirus pan­dem­ic, this grew to $15 bil­lion last year, while the UK also eclipses the rest of Europe in the num­ber of uni­corn com­pa­nies with val­u­a­tions of at least $1 bil­lion. 

Its revered sta­tus as an incu­ba­tor of some of the world’s most excit­ing star­tups can be large­ly attrib­uted to the UK’s lead­ing posi­tion in the bur­geon­ing fin­tech sec­tor, which enjoys the biggest chunk of ven­ture cap­i­tal invest­ment and is where com­pa­nies are grow­ing fastest. Indeed, the top three star­tups in Dun & Bradstreet’s inau­gur­al Accelerate50, which recog­nis­es the UK’s top 50 high-growth tech firms, are fin­techs.

The lessons learnt by these com­pa­nies and the entre­pre­neurs that lead them lend unique insight into what will define the fast-growth tech win­ners in the years ahead, and how to scale up effec­tive­ly dur­ing peri­ods of speedy expan­sion. That begins with some­thing quite sim­ple: expe­ri­enc­ing what the customer’s prob­lems are, accord­ing to Myles Stephen­son, co-founder and chief exec­u­tive of Mod­ulr, a pay­ments-as-a-ser­vice API (appli­ca­tion pro­gram­ming inter­face) plat­form whose three-year CAGR growth of 430.39 per cent placed it sec­ond in the Accelerate50.

“The fast-growth tech win­ners of the future will be busi­ness­es that can iden­ti­fy with cus­tomer pain­points, cre­ate a unique solu­tion and then pull togeth­er all the dif­fer­ent parts around tech­nol­o­gy, tal­ent, fund­ing and cus­tomer jour­ney,” says Stephen­son. “There has been lots of good start­up activ­i­ty, but the real scale-up part is often lack­ing. The win­ners will have the abil­i­ty to scale, and that is both the chal­lenge and oppor­tu­ni­ty.”

Some of the ele­ments of scal­ing up suc­cess­ful­ly are out of a star­tup’s con­trol as they rely on an accom­mo­dat­ing reg­u­la­to­ry envi­ron­ment, such as ensur­ing the best access to fund­ing or, in the case of fin­techs, ben­e­fi­cial part­ner­ships with incum­bent banks. The biggest chal­lenge with fast-growth tech also requires a degree of gov­ern­ment sup­port, but equal­ly a lot of work from start­up lead­er­ship teams, and that is access to tal­ent.

Near­ly three-quar­ters of tech employ­ers expe­ri­ence skills short­ages, accord­ing to research by Totaljobs and Robert Wal­ters. On the pol­i­cy side, the influ­en­tial Kali­fa Review of UK Fin­tech recent­ly rec­om­mend­ed the gov­ern­ment should cre­ate a new visa stream to enhance access to glob­al tal­ent. How­ev­er, com­pa­nies also have to make them­selves more attrac­tive to tal­ent, as well as try­ing to under­stand, soon­er rather than lat­er, the team, peo­ple and skills they will need not just now but years into the future.

“You need to invest ear­ly in future capa­bil­i­ty and over-hire for skills, oth­er­wise you rapid­ly run out of run­way,” says Stephen­son. “You also then need to be able to find and access the tal­ent able to span those changes quick­ly enough to sup­port your growth. 

“When a com­pa­ny is grow­ing fast, somebody’s role today is very dif­fer­ent to how it will be in just a few years. Will they even want to do that role? Find­ing peo­ple who can span that change in the busi­ness is real­ly quite dif­fi­cult. We try to look for peo­ple who have been on the jour­ney before and expe­ri­enced that change and devel­op­ment of an organ­i­sa­tion. But it’s a very com­pet­i­tive mar­ket across all the dis­ci­plines of busi­ness.”

Looking beyond the capital

The top-placed com­pa­ny in D&B’s Accelerate50, Atom Bank, which has expe­ri­enced enor­mous three-year CAGR growth of 838 per cent, has found a workaround to the tal­ent chal­lenge that it hopes oth­ers will fol­low: bas­ing itself out­side Lon­don and the south­east. Lon­don may be the most promi­nent tech start­up hub beyond Sil­i­con Val­ley, but the chal­lenger bank believes there is val­ue in look­ing else­where in the UK. 

“We’re proud to come from a small uni­ver­si­ty town in the north­east. I hope there’s a mes­sage there that this can be done wher­ev­er because there are huge cost advan­tages and most impor­tant­ly peo­ple advan­tages, when you leave the Lon­don and south­east bub­ble,” says Edward Twid­dy, Atom’s chief cus­tomer offi­cer, who also wants to see more soci­etal solu­tions from star­tups.

“Uber is admirable in many ways, but how many bil­lion pounds have been spent trans­form­ing taxis? I hope we see more tech star­tups build­ing solu­tions that trans­form us as a soci­ety, includ­ing com­mu­ni­ty engage­ment, the envi­ron­ment and edu­ca­tion, and they’re reward­ed in both soci­etal and mon­e­tary val­ue.”

Pavel Matveev, co-founder and co-chief exec­u­tive of cryp­to pay­ment plat­form Wirex, con­curs on the impor­tance of good recruit­ment. His own expe­ri­ence of build­ing a com­pa­ny that has record­ed three-year CAGR growth of 426.33 per cent, plac­ing Wirex third in the Accelerate50, sees him reach­ing for his learn­ings on cul­ture when shar­ing advice with oth­er lead­ers.

“Grow­ing a team at pace is very dif­fi­cult,” he says. “With so many new peo­ple com­ing in you need to ensure they are not only qual­i­fied for the role but also share your vision, which means you need to know how to com­mu­ni­cate that vision. Focus­ing on cul­ture is impor­tant to any scal­ing exer­cise. If you don’t, it will be the first thing to dis­ap­pear and you’ll end up with lots of peo­ple who don’t share the same val­ues and goals as a team.”

How­ev­er, what Matveev believes most pas­sion­ate­ly will define the fast-growth tech win­ners of the future is a sus­tain­able busi­ness mod­el. The relent­less striv­ing for “growth”, judged by rapid increas­es in user num­bers at the expense of near­ly every oth­er busi­ness suc­cess met­ric, has result­ed in a tech ecosys­tem with a high rate of fail­ure. Matveev hopes the impact of the COVID-19 cri­sis will help end the long-pre­vail­ing, warped view that if a tech start­up isn’t los­ing mil­lions of pounds a year, it’s doing some­thing wrong. 

“Pre-COVID, and still to a cer­tain degree now, as long as your user num­bers were grow­ing fast, you could get fund­ing from ven­ture cap­i­tal­ists,” he says. “Com­pa­nies would raise lots of mon­ey, with lots of media atten­tion and hap­py cus­tomers, but all the while burn­ing hun­dreds of mil­lions of pounds and unable to mon­e­tise the client base. We have to get used to look­ing beyond just one year of suc­cess. Thank­ful­ly, it’s start­ing to change now.”

For­get the uni­corns; it’s diver­si­fied, sus­tain­able busi­ness mod­els and an abil­i­ty to attract the best tal­ent in good time that will sep­a­rate future suc­cess from fail­ure.

For more infor­ma­tion and to see the full list of win­ners of Dun & Brad­street’s inau­gur­al Accelerate50, please vis­it the awards hub