Perspectives from ISB

Ve Interactive is the latest high profile name that serves as a reminder that many tech scale-ups have failed. There are many causes, but it shows that the short term goal of making the participators wealthy does not always pay off. A scale-up can engage with a long-term strategy to remain owner-managed and a family business.

Issues and challenges faced by scale-up businesses

There are many challenges to overcome in scaling up your business;  some of those challenges are about taking time to consider and implement the changes you will need to make for the long term – taking the long view:

Hiring good people – take time to pick the people you are going to work with, whether that’s your board, your staff, your suppliers or your investors. Hire quality, you need to take a long-term view, how do those people fit into the bigger plan, make sure those people can fit into your vision, your culture and your team, especially if the business is family-owned.

Managing issues – address key issues as they arise, especially as people can be out of their comfort zone in a fast growth business. Family businesses can raise specific issues such as succession planning, family working in the business and separating family from work.

Leadership and culture – it is likely that the management team and structure will need to change to adapt to growth of the business. You will want to take efforts to retain the integrity of the business’ culture and ensure people are in the right roles, scaling really challenges that as the number of people increases.

Product demand – with growth comes increased emphasis on sales. You should first focus on the creation of long-term demand for your product or service, focusing your strategy on how to create sustainable buyer demand.

Why a family business?

The family business has a place in the fast-growth tech world, the strengths of the family firm can help the business remain sustainable. There are challenges, you have to manage succession, handle conflict, honour the culture, make decisions and take action – but these are challenges any scaling business faces. The advantage of a family business is the team knows who they are and what they want, and their certainty of culture gives the business focus, and that is a key driver for any scaling business.


Getting investment does not provide an exit, it brings in the cash to continue scaling and addressing the challenges that raises. The best investors will also be highly experienced entrepreneurs themselves and have deep networks that can help accelerate the growth of their portfolio companies. This can be a game changer for a family business to grow the business more quickly than they would have done under their own steam. At the same time, they need to appreciate that the culture of the business can change dramatically as a result with new personalities, more rigorous reporting and governance processes.


A scale-up can engage with a long-term strategy to remain owner-managed and stay a family business. Family businesses can deliver high performance, using their commitment, hard work, knowledge and culture to meet the challenges of the scale-up journey.

Source: Nair, Praseeda., June 8, 2017,

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