In this month’s Scale Up series talk, we heard from Allen Lau, co-founder and former CEO of Wattpad (now their Executive Advisor) and a co-founder of Two Small Fish Ventures. BenchSci was a part of Two Small Fish’s first ever fund in 2016. Allen has been a great champion of ours, helpings us build networks here and beyond as we pursued our Series B fund. Fast forward to now, Allen’s wealth of experience as a serial entrepreneur combined with practice leading an international consumer internet company has given us a blueprint for how to scale.
I was really taken with how his advice aligned and built upon our previous two talks with Patrick Pichette and Janet Bannister. Similar themes keep coming up, but here are six unique thoughts that Allen shared:
Maintain fundraising optionality and look for clean contract terms
Allen began by stressing the importance for a company to maintain optionality, especially in terms of fundraising. He advised keeping the burn rate low and the runway no shorter than 12 months at any given time. This gives the company much more leverage when looking around at what investors are offering. “Having enough cash on hand allows you to keep your options open and be a bit pushier with contract terms,” Allen said. “It’s not necessarily about pushing on the company’s valuation. Sometimes making a deal at a lower valuation can be the better option if the terms are cleaner and favorable to the company’s founders and employees. Optimizing for those kinds of contracts allows you to be more flexible in the future.”
Roles should constantly be evolving as you scale
“When you’re in rapid scaling mode, the nature of everyone’s job is constantly changing,” Allen noted. “Two years from now, your calendar will probably look nothing like it does now.” How team members manage their time in a three-person company is going to be very different from in a company of 10, or 30, or 100 people. Great leaders know this. They are able to read the ever-shifting organizational environment and redistribute responsibilities as appropriate to ensure everyone is able to succeed and keep the company moving in the right direction. To paraphrase Allen: if you aren’t proactively adapting, you’re already falling behind.
Ensure everyone at the company has the context they need to fulfill their role successfully
One of the common problems Allen warns to look out for is dilution of context as a company expands and new hires make up an increasing percentage of the team. People need insight into how their role supports the company’s mission and objectives to be able to make the best, most informed decisions in the course of their work. But, if a new hire only works with other new hires, they may not know who to turn to for this sort of information. “Once we get beyond 30-40% year-over-year growth in terms of the number of employees, this problem can become quite magnified,” Allen told us. “Teams can actually become slower because they just don’t know what to do.” He suggests a company should be very intentional with mixing new hires with company veterans to ensure everyone understands that context and where they fit in.
Find the balance between doing things fast and doing them right
As a tech startup, moving fast is vital to our success, which is why speed is one of our core values as a company. But we can’t rely on speed alone, lest we end up racing in the wrong direction. On this dichotomy between doing things fast and doing them right, Allen shared a decision-making framework he has found to be very useful. “It’s simple, we just ask ourselves two questions: is the decision reversible, and is it consequential?” Allen explained. If something is reversible and inconsequential, anyone should be able to make a decision; there’s no risk and it can always be changed later if a mistake was made. This way, everyone feels empowered to act, and speed will greatly increase. If a decision is consequential but still reversible, maybe it just requires alignment from your team. Ultimately, it’s still a relatively low risk because that decision can be easily reversed if necessary. Generally, it should be the consequential and irreversible decisions being made by senior leaders. These decisions can’t be rushed, but they’re pretty rare comparatively; in a week, a CEO might need to make one consequential, irreversible decision. “Once you have this decision machine going, and people know when they can or can’t make a decision when they need alignment, and when something needs to be escalated, everything will go faster,” Allen said.
Check your ego at the door and don’t take things personally
When you have a great team, everyone wants to ensure the best possible decisions are made for the company. But people aren’t always going to agree on the best way forward. This is expected and should, in fact, be desired by a company. Diverse opinions help teams make better decisions. But it also means there will be arguments between colleagues, and some might get heated. “It’s okay to have a heated debate, but at the end of the day you need to maintain a good relationship with the other person,” Allen advised. “If you let ego factor into it, that can spoil a relationship.” It’s important to remember that, ultimately, you both have the same objective: the success of the company.
Don’t feel intimidated because of your cultural background
“I came to Canada when I was 19 years old technically an adult, practically still a kid. I didn't realize how much difference it made until many years ago,” shared Allen. “The impact was culturally I felt like I was missing something. I had to learn certain references retroactively and I I think that became somewhat a hindrance on me early in my career.” Diversity doesn’t just mean having different people of different backgrounds in the room but including them in the space. As someone who also immigrated to Canada, I have a different perspective and experience to other Canadian CEOs I’ve met. Psychologically that difference can feel intimidating and can undermine your confidence. But in order to change things we need to be brave and enter spaces where we may not have been represented before. As Allen says, "Don’t let that cultural background, don’t let that image, don’t let that perception hinder you. You are as smart as anybody else in the room…That’s very hard to overcome in the beginning. Once you have done that, you will realize it’s alright."
BenchSci is scaling quickly. Our big, hairy, audacious goal (BHAG) is to bring novel medicine to patients 50% faster by 2025. To do so, we're hiring over 200 new team members by the end of 2022. This kind of change can be difficult to manage, especially while maintaining our culture. That’s why I appreciate hearing from champions like Allen. I’m grateful he made time to share his thoughts and answer questions from the whole team.