Startups: Scaling Up and Preparing for the Worst

Scaling up is one of the many things that startups aspire to do in their entrepreneurial journey. What do you need to scale up and how do you know the time is right to take the next step? What should you do for continued growth?

Saul Molla Cuesta, the founder and CEO of the FlowerStore Group, and Steve Sy, founder and CEO of Great Deals E-Commerce, imparted their advice on these topics during eChai Venture’s Startup Growth Networking Meetup at Draper Startup House Manila on June 29, 2022.

It was a lively discussion moderated by Maeve Eilinger, Wadhwani Entrepreneur Senior Associate, with the two entrepreneurs sharing about their experiences and the insights they gained from running their business. Here’s a look back at some of the key points that were discussed and that everyone can learn from as we move forward in our own entrepreneurial journey.

On scaling up

When it comes to scaling up your business, you need to have the vital things — people, process, and tech — in place. This is the advice of Steve, who asserted that you need to build a good team and create the right process before you can scale up.

You would also need leadership skills and learn how to deal with people, adding that it would be a good idea to hire people who are better than you.

Saul also advised that entrepreneurs should make sure that they can trust the people in their company to do the different things that keep it going, such as administrative tasks and fundraising.

But when did they know that it was the right time to grow or scale?

Saul said that entrepreneurs should have a mission of wanting to expand, not just expand for the sake of expanding. It should be done for the right reasons, and when you already have a model you can replicate.

For Steve, it’s all about having the appetite to expand. He shared that his crossroad moment happened at the end of 2017 — he had been reflecting if he was already content with his existing business. He was, but he still had the appetite, so he did what he must to do just that.

When asked about how they scale up in their operations in the Philippines, Steve shared that they are doing hyper-localization and have opened a fulfillment center in Cebu, which shortens fulfillment time from 5-7 days to just 3 days. They will also be opening a fulfillment center in Davao soon.

Saul shared that they have opened up operations in Cebu and Davao and are partnering with local florists and gift shops for the fulfillment of orders and same-day delivery.

On building a team

Steve and Saul highlighted two things that entrepreneurs should look for in potential team members: character and the desire to learn.

For Steve, skills can be learned, but it’s hard to see a person’s character. He suggested looking at a candidate’s social media accounts to see how they react to situations, respond to real-life events, and even relate to their families.. For him, character is more important than talent, as you can train them.

Saul added that some people are good at interviews, while some are not but perform well. For Saul, experience is less relevant unless it’s for something that’s really important, like a CEO position. In e-commerce especially, experience doesn’t really matter much as things change quickly in a matter of a few years, and whatever experience one has would no longer be relevant. The important thing, Saul said, is that you want to learn.

On major failures and mistakes

Every business journey has its ups and downs, and it’s no different for the two entrepreneurs. While it’s easy to dismiss mistakes as errors in decision-making, in business these mistakes are positively regarded as a learning experience.

So what are these mistakes that Saul and Steve have learned from?

For Saul, it’s not scaling earlier and relying too much on manual processes. There have been times in the past when they did not account for the unexpected and put enough buffer.

Steve admitted there were too many mistakes to mention, but for him that’s the beauty of being in business. “You always need to adjust to the mistakes,” he advised, noting that you need to be prepared for the worst to be able to sustain your business even in a bare market.

Starting vs. Scaling: Different approaches

“What are the differences in your approach when starting and scaling?” is another key question put forward during the discussion.

When first setting up FlowerStore, Saul said that they started with four people and they did everything — because if you didn’t, no else would.

As they progressed and scaled up, they were able to grow their team as well, and each played a role in making sure the business moves smoothly. Saul advised that entrepreneurs should make sure their processes are defined and can run autonomously.

“Starting, chaos. Scaling, organized chaos,” Steve answered, triggering chuckles from the audience. On a more serious note, he said that when starting out you would really have to “get dirty doing all the work.” You would need to have an overall view of all the work that needs to be done, and you need to have those processes in place when you scale up.

Advice to early-stage founders

“Start doing. Start learning. The sooner you start, the better,” Saul answered when asked about what they, as founders, can advise those who are just starting or have just started on their entrepreneurial journey. He said that sometimes people spend so much energy just thinking instead of actually doing things.

Steve advised to have a bamboo tree mindset, not just a seed mindset. A seed may sprout quickly, while bamboo takes years to grow. And though it can grow hundreds of feet, it is stable because its roots grow strong.

In the Philippines, most have a ‘get rich quick’ mindset, but in order to be stable and grow faster, you need to build your roots, and have a strong foundation, like the bamboo.

And we agree. A lot of patience and hard work is needed to really lay down a good foundation for any enterprise. All in all, it was a great evening filled with insights and lessons on growing a business.