How We Managed People to Grow to $200M

I’m Tom Lavery. I’m here to talk about the five biggest lessons I’ve learned in scaling startups. In the eight years of Reward Gateway, we learned so much: we went from having 5 of us in a room to 350 people in 7 countries. You make a lot of mistakes; you do a lot of things wrong. But in the end, we sold for $222 million so we did a lot of things right as well.

Finding The People Who Sell Better Than You

In the first phase of a business, we had no investors. We built it off the back of a credit card. We had 2 years of freedom, in which we did not have to answer to anyone. Then 2 years later, we have an investment for $42 million — and suddenly we were a big business. There comes a point in which I had to let go of doing all the day-to-day sales myself. I personally wish I’d done that earlier because a big chunk of my time was taken up by personally going out and closing deals. If you bring in sales people, you want them to be better at selling than you are. Why would you bring anyone in the business who isn’t better than you?

How Do You Make Your Employees Feel?

I felt like I needed someone who was very different to me, but that was a wrong mindset for hiring. I actually needed someone who was more like me. I needed someone who would work well within my management style.

Anyone can implement a fundamental sales process; it’s how you make people feel that is the most important. Nothing else matters. Do your employees get out of bed for you? Do they want to go the extra mile for you? The only way you get the best out of people is if they really care.

People say recruitment is important and that it’s the hardest thing, but how often do you put it on the top of your priorities? When your scaling a startup, don’t be afraid to take a step back and maybe lose a little momentum in order to gain longer terms.

Commission Structure-Put Your Sales People First

Commision structure is a tricky thing. If you have transactional sales that are very quick, you can have more of a carrot and stick commision structure, but if you have a longer sales cycle, you have to think more strategically. Ultimately, the biggest thing I learned was that the commision structure should put your sales people first, then the customer, then lastly the business. If the commission structure is restrictive in any way, your salesman will make bad decisions.

One of the smartest things we did was split our commissions to the same. Despite their deal values, salesmen would get the same commision because all deals are valuable to us as a business. We wanted people to feel on a level playing field.

Will Over Skill

When we first came into the marketplace, we were the challenger. The market was employee-benefits, which insurance companies typically dominated. We were bringing tech to the forefront, being more fun and engaging. As you get bigger, you will need people with experience — but at the early stages, I would always hire people with will over skill. Everything at that point is a question mark. What you want are people who are creative and flexible with change. When we looked at our first 50 employees, everyone was from outside the industry. No one had previously worked for direct competitors. Everyone had different views, and that really worked for us.