Above: BiT CEO, Ricky Thet (centre) with CTO Soe Khine Win (left) and CMO, Win Hlaing.
This week we interviewed our good friend and EME mentor, Ricky Thet, CEO of Bagan Innovation Technology (BiT) to bring some insights from a Myanmar startup that’s truly succeeded. BiT’s Android keyboards (Bagan Keyboard, Frozen Keyboard) have more than 20m downloads and 15m active users. Their bookstore (Wun Zinn) and fortune-telling app (Min Thien Kha) are both market leaders. From starting in 2012, BIT now has well over 100 staff and is continually bringing new products and services to the mass market.
What was the founding strategy behind starting BiT?
Before BiT, I was a software architect in Singapore specialising in mobile solutions. Most of the projects were not from a mobile-first approach, but rather extensions of existing non-mobile services to mobile. That was back in 2007. After working for a year or so within this new mobile solutions trend, I realised that mobile was going to be big, especially in a country like Myanmar.
So in 2010, I started a small software firm specialised in mobile projects. Then in early 2012, I started BiT with my two co-founders. At the time, there was no clear strategy, just the belief that mobile would be the centre of everything. That shared belief was the beginning of a vision that would drive BIT. We spent the next two years researching the market; at the end of 2013, we set our strategy to focus on building a user-base through cool apps and digital content because we love tech and reading and we saw an opportunity to bring this to Myanmar.
How did you win the android keyboard market?
Bagan Keyboard is the baby of our CTO, Ko Soe. It started as his part-time project and he did all the heavy lifting almost single-handedly. After seeing the product, we decided to back it and put the whole team behind it. The success of Bagan Keyboard mainly comes from our commitment to R&D, constant listening to users’ feedback, and of course timing (first-mover advantage at a time when mobile phones were scaling like crazy). We have released over one hundred versions of Bagan Keyboard. That simply shows our commitment to the product. When talking about a software keyboard, a lot of people only see the UI and UX but there is so much that goes on behind the scenes. We continue to put more resources into our keyboard even today.
What is your secret to customer acquisition?
The key to customer acquisition is the product itself. If the product provides value to users, then it is much easier to achieve massive customer acquisition. Our main strategy for customer acquisition is delivering true value with the product itself and understanding the users’ ever-changing expectations. If people aren’t buying or engaging with your product, you have to ask yourself: is it my go-to-market strategy or is it my product? Lots of founders think their product is great, but it doesn’t matter what they think: it only matters what users think.
What advice would you give new founders today?
I have to repeat a message from Steve Jobs – you’ve got to find what you love, and you have to love what you do. You don’t have to love daily tasks, but you have to love and believe in your product / service / strategy. Don’t start a startup for the sake of starting a startup, if you expect to succeed. Starting something from nothing is hard. If you’re not in love with your startup, how will you justify the sleepless nights and effort required to grow it? Are you ready to spend a decade of your life doing any tasks which you might like or hate every single day to accomplish your startup’s missions? Would-be founders must be able to say “yes” to that before founding the startup.
What advice would you give yourself if you could go back in time to founding BiT?
Go for it and dream big. Time is precious so get the most value from it. You’re about to spend the next ten and more years putting everything you have into this business so think about it in the biggest ways possible. If it doesn’t feel too big or unachievable, you’re not thinking big enough.
We’ve met more than 150 startups in Yangon and Mandalay and we continue to meet more every week as we seek the most promising early-stage companies in Myanmar. Over the course of these meetings, we’ve seen and heard some excellent pitches as well as some more confusing ones. We’ve noticed on a few occasions some confusion over certain terms when it comes to startup company metrics. Therefore, we thought it would be useful to clear up some terminology on business and finance metrics for startups.
This isn’t a list of the only metrics you should be measuring. It is a list of things we know people get wrong sometimes. It’s also a list of the metrics that we like to see at first glance. These metrics tell us about the company and market potential and provide enough information to get us interested to learn more (assuming the numbers are good!).
If anything remains unclear after reading, or prompts a question, contact us at firstname.lastname@example.org.
Revenue or Bookings?
Revenue is recognised once a service or product has been provided. Bookings is the value of the contract between the company and the customer. Let’s say you subscribe to receive a monthly milkshake for $5/month, you sign a twelve-month subscription for $60. The $60 represents the bookings for the milkshake seller. The milkshake sellers will then recognise revenues of $5 each month until the end of the contract. Now, if you bought twelve milkshakes at once and took them home, then the seller would have provided the goods and therefore would recognise the $60 revenue. Getting these things mixed up can appear misleading so ensure you’re clear with investors. Bookings = contract value. Revenue = money for the service or product that has been provided.
Gross Merchandise Value or Revenue?
Gross Merchandise Value (GMV) is the total value of the transactions going across a marketplace. Revenue in this case is the amount that the company takes from a transaction - the commission, either flat-rate or percentage. If I have a marketplace for bringing together buyers and sellers of shoes, and 100 pairs of shoes are sold at $25 each then the GMV is $2,500 (sales price x number of sales). If in the next month the 200 pairs of shoes are sold at $25, clearly the GMV is $5,000. GMV therefore shows the activity of the marketplace and helps investors understand the market size. If the company charges 10% on transactions, then revenue would be $250 and then $500 on the above examples. GMV is not revenue, it’s about the market not the money your company is making. Revenue is the amount your company makes by providing a service - in this example the service is bringing together a buyer and seller and facilitating a transaction.
Monthly Figures or Cumulative Figures?
If you sell three items in month one, two in month two and one item in month three, your sales are clearly declining, but if you show a cumulative chart - it’ll still show an increase, from 3 to 5 and then 6. Investors do not like cumulative charts because they are misleading. We want to see your monthly users / sales increasing and at what rate. Therefore, while it may be tempting to use cumulative charts, don’t. Show your monthly activity and your month on month (MoM) growth. If your product is right and you’re reaching your customers, your users / sales should be increasing every month. If they aren’t you need to question why; and then make changes that drive growth. Once you have some solid month on month growth, then you have an interesting chart to show investors.
Downloads or Active Users?
Downloads is the number of people who have downloaded your app, while active users is those users that are still using it. Active users would tend to be quarterly, monthly, weekly or daily - it depends on what your app / service is. Pick one that works and use it. You might have 500,000 downloads, but active users is where the value lies as these are the people actually engaging with your product. We would recommend breaking your active users into groups (i.e. paying, not paying) to help show if your business is managing to increase users who are paying for your services. Also consider if your active users are carrying out behaviours which you want to tell potential investors - such as recommending new users, providing positive feedback or enquiring for additional services.
Operating Expense or Costs of Goods Sold?
Costs of Goods Sold (COGS) relates to the costs required to produce a product. Operating Expenses are expenses that are not directly related to producing a product. Let’s say I sell a banana milkshake for $5; I paid a total of $2 for the milk, ice cream and bananas so my COGS were $2 (or 40%). The milkshake was made by my staff member who receives a salary, in my cafe where I pay rent using electricity which I pay a utility bill for; each of these items is an operating expense. With a software-as-a-service (SaaS) business, COGS tend to refer to the costs involved with providing the software: hosting fees, third-party products involved in delivery, and employee costs for keeping things running. It’s worth being clear what you’re including in SaaS COGS as some investors may have slightly different interpretations. Why is it important to define COGS properly? Because revenue minus COGS is equal to gross margin; and dividing gross margin by sales revenue gives you gross margin percent which tells you (and investors) how much the company retains from every dollar (or Kyat) sold.
Update 9th July 2019:
Comment from Sam Glatman, Founder of "Zingo" a startup in Myanmar providing oral care products for betel nut chewers:
The metrics that matter article is great and raises an issue that we have been working on internally recently. In our case, we have been differentiating between “sell in” and “sell out”. “Sell in” is a sale on credit to a distributor. “Sell out” is a sale either by us directly or by a distributor to a betel vendor who pays hard cash. We realised that while “sell in” is where our top line revenues come from, the only relevant metric for us is “sell out” because it’s leads to hard cash, and demonstrates real consumer demand. For us (and many start ups), cashflow is a far more relevant success (& survival) metric than P&L, and top line revenues are not as indicative of cashflow as might be expected.
Pay Rises and Hostage Situations
When did you last negotiate? Probably, it was sooner that you realise. Negotiation isn’t all pay rises and hostage situations, it’s the process of agreeing on an outcome. If you want to leave work early today, you might offer to stay an hour later tomorrow. If you picked what to eat last night, perhaps you told your friend / partner that they could pick next time or explained that you knew the best place to go. These are negotiations in our daily lives. We negotiate every day to some degree, but if we don’t even realise we’re doing it, how do we know if we’re getting enough in the agreement?
In his book, Getting More, Stuart Diamond teaches how with some simple core principles it’s possible to become more effective negotiators, both at work and in our day-to-day lives. Diamond is an American Pulitzer Prize-winning journalist, professor, attorney, entrepreneur, and author who has taught negotiation for more than 20 years. But, he claims, the lessons in his book can be implemented by anyone. Sounds too good to be true? I gave Diamond’s lessons a try and got a big discount at a local gym - not life-changing, but many little discounts add up. On a more relevant topic, investors and founders will hold hundreds of negotiations between one another. Of course, valuation is often a negotiation, but think about term sheets, CEO salary, budgets, future capital raises or even small things like requesting support, asking for introductions or agreeing on where your board meeting will be held. Diamond is clear in his book: if both parties understand negotiation, both can come out with more.
Diamond's 12 Strategies
Don't be Hard, be Smart
How can both parties get more? It depends how you define “more”. One thing Diamond teaches is being very clear about what you and the other party want. First, ask three questions: What are my goals? Who are “they”? What will it take to persuade them? Next, ask yourself these same questions for the other person (or persons). Then, try to trade things of unequal value. I wanted to go to the gym in the morning, not the evening; mornings are not busy at the gym so I asked if I could have an off-peak discount. I traded “peak hours” which had zero value to me, while the gym could still improve their income by selling a product of lesser value to them “off-peak hours”. All that was necessary was understanding what each party wanted. I didn’t want “gym membership” but rather “access to the gym early in the morning.”. If you’re raising capital, do you want “$100,000” or “funds to help you scale”? Does the investor want “as much equity as possible” or “equity enough to balance their risk”? If it’s about balancing risk, how else could you reassure the investor?
The key is once you have a clear picture in your head of what you want, you need to get that picture into the head of the other person. To do this, Diamond recommends role playing the negotiation - taking the role of the other person. Think about what they want, how they would respond and have a friend help you go through the motions. If you can understand the picture in the other person’s head, you’ll have more chance of discovering how to show them the picture in yours.
Borrow the Book from EME
There’s a lot more to discover in Diamond’s book - if you’re interested, we have a copy at EME we’d gladly lend to you. Diamond can be a bit self-congratulatory, but it's worth persevering through at least the first half of the book. Before we finish, let me leave you with some key points that echo throughout his book:
Following on from our previous post on startup ideas in Myanmar, we’re releasing a second list. This list focuses on more technology-intensive, speculative ideas, particularly for the B2B sector. B2B startups typically face higher barriers to entry than B2C ones, but can be rewarded with stickier customers. Businesses aren’t easy to win and it can take months to get one client, but once onboard they tend to need a reason to switch provider, rather than to stay. Consumers, on the other hand find it much easier to try new solutions and are therefore often harder to keep hold of.
In neighbouring India, there has been a huge rise in B2B startups, a lot of which have focussed on enterprise software, such as Freshworks which last year made unicorn status when it raised $100m at a $1.5bn valuation. Myanmar is still a way from seeing its first unicorn, as we discussed in an earlier blog, but we’re definitely seeing innovation in the B2B space - such as Mote Poh, which is redefining ways in which companies recognise and reward their staff.
So without further ado, here are our top five speculative B2B tech startup ideas. Same caveat as last time we wrote one of these posts: we haven’t tested or researched these ideas beyond lunch chats and a cursory Google, so try them at your own risk (but if you do try any of them, tell us!).
Think we missed something, or our ideas are genius, or completely mad? Write us at email@example.com and tell us why.
The Innovation Blind Spot – Why we back the wrong ideas and what to do about it
By Ross Baird
In recent years, Ross Baird has built quite the reputation for himself. Entrepreneur, investor and now author. In 2009 Baird founded Village Capital, a VC with a unique peer-selection approach, and has since worked with hundreds of entrepreneurs and investors in more than fifty countries, including EME in Myanmar.
The hypothesis of his book is that innovation today suffers from three major blind spots – blind spots that negatively affect how we do business, innovate and invest. The first blind spots has to do with how we, as investors, choose new ideas; the second with where we find new ideas; and the third with why – why we invest in new ideas to begin with. These blind spots result in investors overlooking untapped companies, untapped markets and untapped industries.
How we invest: One size does not fit all.
Innovation breaks moulds, it doesn’t fit them. Baird urges investors to look beyond traditional ways of identifying and selecting startups. Investors rarely make decisions about their next investment at a pitch event. Let’s face it, people who are looking for money are going to tell the people with money what they want to hear, and most investors know that. And not all great founders are pitch wizards. This is one reason EME uses an adaptation of Village Capital’s VIRAL scorecard (see our recent blog) to give founder and investor the chance to have an in-depth discussion. Also, while many VCs prefer to hear about companies through their networks and are closed off to enquiry, our door is open and we’re very happy to meet and discuss with founders who reach out to us.
Baird pushes investors to consider their ecosystem. Myanmar isn’t Silicon Valley. Spray and pray (making lots of investments, hoping one or two make it big) doesn’t fit the same metrics here as there and expecting entrepreneurs to model themselves on Brian Chesky (Airbnb CEO) is pretty pointless. The innate diversity of Myanmar forces us to think outside the box, playing to the strengths and uniqueness of individuals, companies and new ideas. True innovation, not copy-paste from outside, takes time and committed investors.
Where we invest: looking beyond (a) location.
Fun fact: in US, more than 75% of startup investments flows to only three States – California, New York and Massachusetts – the Big Three. Baird points out that, similar to patterns known from real estate, market frenzies over specific locations can cause prices to rise rapidly, and force investors to pay a premium, for no other apparent reason than location. Does this lead to a location price premium for startups? The Myanmar Times recently wrote that Myanmar had a burgeoning entrepreneurial ecosystem. But, while the ecosystem is certainly developing, it’s a Yangon phenomenon, not Myanmar-wide. Is Myanmar on the path of building a Big One like the US has a Big Three? The laws of supply and demand show us that if demand outgrows supply, prices increase, allowing startups to demand a higher price for equity. On the other hand, if there are a lot of startups looking for funding and the demand is limited, prices decrease.
As rational investors, one of the things we fear the most is something called, “irrational exuberance.” Irrational exuberance is, simply put, a state of mania. In the (stock) market, it's when investors are so confident that the price of an asset will keep going up, that they lose sight of its underlying value. Investors egg each other on and greedy for profits overlook deteriorating economic fundamentals. Baird urges us to search out opportunities where others are not looking, targeting industries ripe for disruption, and where irrational behaviour is nowhere to be seen. Mark Twain summed this up nicely by saying, “Whenever you find yourself on the side of the majority, it is time to pause and reflect”.
Why we invest: between money and meaning.
Baird’s investment philosophy is thoroughly rooted in the impact investment tradition, and he is very much a one-pocket thinker. One-pocket thinking recognises that what’s good for society and what’s good for business does not have to be mutually exclusive. The book offers valuable insights into the rise of impact investing, mapping out its development from the start of the micro finance movement to legendary Ben & Jerry’s, and the growing field of large international venture funds devoted to one-pocket thinking. EME is not an impact investor per se, but we do seek out investments that have positive impact. We are positioned in the intersection between money and meaning, strongly committed to Myanmar’s sustainable development.
The book is riddled with interesting statistics, and thought-provoking narratives. Did you know that 50 percent of the Fortune 500 in 2000 were no longer on the list 15 years later? And that female founders are more likely to succeed than male founders? Baird is articulate and knowledgeable which makes a strong foundation for a stimulating read. This is a book well worth reading and will perhaps illuminate your very own blind spots.
We hear hundreds of pitches a year and we’ve realized there are only two elements you really need: a story, and numbers.
People love stories. They provide meaning to an otherwise disordered and chaotic world. As celebrated author Yuval Harari argues in Sapiens, human civilization developed due to the creation of ‘shared myths’ - stories that allowed large group of humans to cooperate under the banner of a common tribe, religion or civilization. As investors, we’re looking to see if you can tell us a compelling vision for how you want the world to be. If you can convince us, then you can likely convince your future customers and employees about your idea too. Steve Jobs reputedly had such an ability to persuade people that colleagues described it as a ‘reality distortion field’. It’s no coincidence therefore that Magic Leap, a company making next generation augmented-reality hardware, managed to raise billions of dollars before ever releasing a product or making a cent.
On the other hand, numbers are super important too. Nobody is going to argue with 10-20% month-on-month growth, and we guarantee that all investors will salivate over a hockeystick- shaped revenue chart, particularly if it stretches back more than 6-12 months. Numbers (particularly revenue, transactions and active users, although the important metric will vary somewhat by industry) prove that you have convinced some people, somewhere out there, to spend some time or money on your product. This means that you are creating value and it’s a necessary condition for a successful idea. Buffer is a good example of a simple idea (social media scheduled posting) with great traction and execution. In this case, the founders managed to tell a compelling story based around how quickly they were growing. Ideally, your numbers and your story back each other up.
A word of caution however - don’t try to fake the numbers, and don’t pump up growth artificially by spending huge amounts on marketing. It doesn’t take much business savvy to sell a $10 product for $1, although your numbers will look great for a little while. While these growth-at-all-cost strategies may work for the big American and Chinese startup ecosystems (think of the huge amounts spent on ride hailing and food delivery promotions), they take a huge amount of investor capital and have a very high failure rate. In emerging markets, investors are generally more cautious and want evidence that you are actually creating sustainable value for your users.
Check out this excellent gallery from Airtable contains historical examples of pitch decks from successful companies. We particularly liked WeWork, Buzzfeed and Youtube. In these pitch decks, you can just smell the potential sizzling. There’s an energy to them, generated by the combination of compelling stories and early growth that foreshadows their successes to come.
All standard pitch deck templates contain a similar set of elements: Problem, Solution, Market, Traction, Team etc. We think these are important, and you should definitely have these elements (check here for our favourite guide ). But more than that, spend time on coming up with a good story. Then generate the numbers to back it up. That’s all there is to it, really.
Evaluating early-stage startups as an investor is hard. Giving constructive feedback is even harder, at least if you want to say more than ‘Cool idea’ or ‘You need more traction’. That’s why at EME we use a tool called the VIRAL Scorecard, originally developed by the folks at Village Capital, to be more rigorous in our conversations with startups.
Before we dive into how it works, it’s worth emphasizing that this is a discussion tool, not an objective, quantitative measurement of a company’s worth. Data scientists out there may wish it was possible to measure a couple of key indicators, feed them into a model and predict which companies will succeed, but that’s not how early-stage companies work. JFDI, an early-stage VC in Southeast Asia tried to do just that with their Frog Score index, but abandoned it after finding zero correlation between how highly a company scored on their index and how well the company did later on. Instead, the VIRAL Scorecard tries to create a framework for a structured discussion about each aspect of a business.
The VIRAL Scorecard describes a number of dimensions of a business including Team, Product, Market etc. Each dimension has 10 stages, with criteria for each stage. Let’s take a look at the first couple of stages in the Product dimension:
The scores are cumulative, so if you meet the criteria for stage 4, you should also meet all the previous criteria. It’s important to note that the criteria are somewhat subjective - what is the difference between ‘low-fidelity prototype’, ‘working prototype’ and ‘fully functional prototype’ for example?
Here’s how we use the tool when we talk to a startup:
In the meeting, we go through each component of the VIRAL Scorecard, first asking the startup to share their score and reasoning. Then we’ll share our score, and ask follow-up questions. If the scores are similar, great, we’re on the same page. If the scores are very different, that tells us one of two things:
EME and the startup has access to different information: As investors, we will know less about the business than the founders, and our scores will reflect that. At an early stage, we probably won’t have seen detailed financial projections or customer feedback. Conversely, sometimes we will know more about an industry and what the competition is doing than the startup. If this is the case, we’ll have a discussion and often revise our scores.
EME and the startup have different understandings of the fundamentals of the business: Sometimes startups will try to score themselves as high as possible, in the hope that this will make the company seem more attractive. It’s a reasonable approach when faced with a scorecard, but often has the reverse effect. We want to companies to be aware of their limitations and current state. We’re less interested in the final score and more in constructive dialogue. In this meeting, we’re really trying to get a sense of how the founders think, and how we could work together. It’s a cliche that venture capital investors invest in people rather than companies, but that’s particularly true for early stage startups, which could be several pivots away from their eventual model. This conversation is potentially the beginning of a long-term relationship between the investor and the start-up, and like all relationships, good communication and shared values are essential.
These conversations are good for digging deeper into the fundamentals of the business, and often reveal things that we hadn’t even thought of asking about. The VIRAL Scorecard is also helpful in providing concrete points for feedback. Instead of saying things like “You’re too early-stage”, we can say “We’re still unsure about your business model, and we’d like to see some more work done on your unit economics”.
We invariably learn a lot from these conversations, and we think they are useful for startups too. At the end of the day, the final score doesn’t really matter - what matters is the quality of the discussion, and the shared understanding that has been created.
One of EME’s favourite taxi conversations is discussing what startup ideas could work in Myanmar. As investors, we meet with many startups and ecosystem players and have a birds-eye view of what is happening (and not happening) in the startup world. In this post, we’ll be sharing some of the business opportunities we see in the market that we’d love somebody to take a crack at.
In our previous post on the Startup Idea Matrix, we talked about how startups succeed by trying out new strategies in new industries. In Myanmar, there are many tried-and-tested startup strategies from abroad which haven’t been implemented here yet. In particular, we see a lot of opportunity in subscription-based models, which are inherently more sustainable than transaction-based models. Mobile payments players like Wave and OKDollar are beginning to find traction, and startups should capitalize on the emerging opportunity for frictionless digital payments.
As a disclaimer, each of our proposed ideas would require a lot of additional market research, brainstorming, product testing etc, and success is definitely not guaranteed. Yet that’s what makes them worth trying! Without further ado, our top startup ideas are:
EME Myanmar has invested an undisclosed amount in local call center Lan Thit Masterpiece Limited (LML), marking EME’s fourth investment to date.
La Woon Yan (Senior Investment Analyst at EME Myanmar) with Hpauje Kai Hkawng (CEO at LML)
LML offers a range of outsourcing services, including inbound and outbound customer service, sales, data entry and ground marketing. The company started operations in May 2018, and already serves several large multinational clients with significant customer bases.
LML draws on the support and expertise of its founding investors: Masterpiece Group, a large Japanese outsourcing company, and Bagan Innovation Technology, a local tech giant famous for its keyboards and e-book store. The company is based in MICT Park and headed by Hpauje Kai Hkawng, a Myanmar national who ran one of Masterpiece Group’s call centers in Japan for 9 years.
EME’s Investment Director Hitoshi Ikeya commented, “The time is right for a new call center in Myanmar. Companies are spending more on customer support as competition heats up, and consumers want better service. While hiring entry-level staff to handle customer service is cheap, LML offers a robust solution that saves money over the long term through better reporting, reduced overheads and fewer complaints.”
EME will provide LML with sales training, mentorship and introductions as part of its active investment philosophy.
EME’s Q&A with Hpauje Kai Hkawng (CEO of LML)
What kinds of services does LML offer to companies?
LML provides business process outsourcing, focusing on call center services, alongside market research, customer surveys, ground marketing, and social media management.
Why should companies choose to outsource their customer service and sales to LML?
It can be difficult for companies to build good customer service teams in-house, and knowledge is often lost when employees leave the company. By using LML, companies can focus solely on their main business, without worrying about customer service. As a specialist in customer service, LML knows customers' requirements better, listens effectively and can analyze the customer trend based on customers' feedback.
How will EME help LML to grow?
EME will help with general market awareness and economic analysis, so that LML knows which industries to target for potential clients. In addition, EME will help oversee the sales process, providing connections to international business. and potential clients.
What is your vision for LML in the next 5 years?
We aim to be the leading call center in Myanmar, known for our quality guaranteed customer service. We want to fill 200 seats, and provide high living standards for our employees.
How will LML change the customer service / outsourcing landscape in Myanmar?
Currently call centers in Myanmar are mostly one-way; they don’t prioritize listening to customers. LML will put the customer first, making sure that customers always receive friendly and trustworthy service.
About Masterpiece Group
Masterpiece Group, Inc., originally established in Japan, has over 25 years experience in BPO services. Since 2000, they have expanded throughout China and Southeast Asia; totalling 12 operating centers across 7 countries, supporting 10 languages and over 200 clients worldwide. They focus on the development of specialized BPO services in Asia centered on the world’s major languages: English, Chinese and Spanish.
Fast-growing startups have a lot to think about, survival being top of the list. Yet in the long term, the way a startup manages people is absolutely crucial for success. As Peter Drucker said, “Culture eats strategy for breakfast”. Creating a productive and healthy work environment where employees are empowered is the difference between an average and a great company.
From the traditional ‘Human Resources’ to the trendy ‘People Operations’, there have been many approaches to the art of managing people. Yet they all encompass the same basic elements, summarized as follows:
Startups change quickly, and HR is often slow to adapt. A rule of thumb is that for every tripling in headcount, the internal systems of a company need to change. A one-person startup is very different from a three-person startup, and a ten-person startup is yet again different. The goal is to have a balance between structure and flexibility - too many documents, forms and policies and everyone gets bogged down in bureaucracy - too few, and nobody knows what is going on.
With all that said, here are some beginner steps to get you started on your HR journey:
We’ve also curated a list of resources that EME has used internally to learn about HR. Note that some of the policies and regulations mentioned in the resources may only apply to specific countries; it’s always worth studying employment law in the country you operate in.
From HR to People Ops: When and Why To Start a People Team