According to IntelligenceBank founder Tessa Court, the biggest threat facing Aussie scale-ups isn’t a lack of funding or a shallow talent pool, it’s mediocrity.
Court discovered this while scaling her marketing operations startup, which she launched in 2010 with the goal of helping marketing departments become more efficient through an online platform that streamlines asset management, operations and compliance.
“I’d just moved from the US where I’d worked in international advertising, and I joined a startup called Hitwise which we ran for 10 years before we exited,” she tells StartupSmart.
“While running their sales operations, I found myself tearing my hair out trying to make sure that salespeople and marketing people were singing from the same song sheet. It was a bit like trying to herd cats.”
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From this frustration, IntelligenceBank was born, and the startup has seen strong growth since then, rolling through two funding rounds, including a $5 million Series A in December last year.
The company currently has 38 employees, and Court is planning to grow that number to 55 by the end of the year. This process of scaling has helped the founder realise some hard truths about the nature of hiring, and the culture of fast-growing startups.
“When you’re scaling a startup, it’s about it becoming a ‘real business’. When you start a startup, your core team has to be good at everything, there’s not a lot of specialisation going on, but as you scale, you start splitting people’s roles up and forming teams,” she says.
“It can be a bit like cowboy land at the start of the business, you just need people who can get it done. And while those people are awesome, eventually, you need people with certain, specific skill sets.”
“Some of those people can take that on board and evolve, and some can’t, and those that can’t should probably go to another startup.”
Managing people in this way can also come with an adverse effect on the company’s culture, with Court finding herself conscious of how to maintain the “vibe” of the startup while simultaneously maturing and defining her workforce.
“Culture is such a big thing for us, but we don’t have a beanbag in every corner or ping-pong tables everywhere, so I was working on how to keep the vibe of the place ‘real’, and ensure everyone had each other’s back,” she says.
“The biggest threat to scale-ups is mediocrity, of any kind, and that terrified me.”
Court says she overcame these struggles by focusing on quality, realising she’d never truly be able to “let go” and stop worrying so much about the business’ day-to-day if she wasn’t confident she had quality people running things.
“We’re bringing on people who have built businesses from $10 million to $80 million in revenue, and who want to do it again,” she says.
Cashflow positive and loving it
IntelligenceBank has been growing between 50-70% per year over the last few years, with the majority of that growth being entirely organic. Court holds a somewhat unique position as a startup founder, with IntelligenceBank being cashflow positive nearly every year since launch.
This has led to the company finding a difficult balance between growing “as fast as possible” and maintaining its cashflow positivity. However, Court says having that confidence in her company’s accounts has given her a lot of freedom as a founder.
“It gives you a lot of freedom as you’re not strapped for cash, and therefore, you make better decisions. Let’s say you’re a startup with runway for another five months, you’re more likely to take a bad deal from a VC that you don’t really want to take,” she says.
“You end up making decisions on the short term, and at the end of the day, it all becomes a bit like a house of cards, and you become only as good as your last round of funding.”
While she notes some companies, such as Uber, use constant funding as part of their business model, she believes if startups can prove they’re viable businesses without venture capital, they should.
This philosophy, sometimes referred to as the ‘indie’ method of running startups, has been pioneered by a number of prominent local names, including Cloudpeep’s Kate Kendall and Sked Social’s Hugh Stephens.
Getting good advice
Looking at the future of IntelligenceBank, Court says it’s about being “milestone-driven”, advising founders that working to different, well-defined milestones can help you manage and plan a company’s growth.
“For us, that’s getting to $50 million in turnover, along with getting more staff into our US office. But ultimately, we want to build the best product in the world for marketing operations,” she says.
Court has been helped along her journey by a board of three advisors she meets with every few months. This “advisory committee” has been invaluable to her startup’s growth, she says.
“For people in the early stage, there’s a lot of free advice, but you do outgrow that eventually. I have three individuals who I contract to advise the business, which I find has been a great approach,” she says.
“Sometimes it’s a little lonely in business, so it’s nice to have people who tell it like it is.”