A roundtable discussion on scale and its challenges with leading innovators in the venture capital ecosystem

In an ever-evolving business environment, how do savvy investors and entrepreneurs tackle questions of scale and growth? How can companies uphold their culture and values while remaining adaptive to market changes? Can business leaders ensure their companies’ growth while maintaining an internal sense of purpose?

These questions and more were discussed at the inaugural Summit to Scale event, an exclusive gathering of founders, investors, and key stakeholders, co-hosted by RBCx and Catalyst Commons.

One of the event highlights was “Scaling Smart: Operational Excellence and Sustainable Growth,” a panel discussion featuring some of the country’s leading innovators.

Focusing on scaling smart

Fittingly, the conversation began by asking each panelist to define scale. There are three questions investors often ask when evaluating early-stage companies: is it defensible, is it repeatable, and, crucially, will it scale? But what do we mean, precisely, when considering this idea of scale?

Mark Maybank, co-founder and managing partner at Maverix Private Equity, suggested scale can be best considered from an inverse view. “Some people think you have to do things to help your business scale, when really you have to remove the impediments that stop your business from scaling. It’s like a plant that wants to keep growing, but the pot is too small, so the roots get denser and you have to repot the plant. It’s about eliminating the barriers and removing the problems.”

Sarah Miller Wright, board director at Realtor.ca, agreed. “Focusing on fewer things and doing them better is really how you find that ability to scale. As you grow, you should be doing things that are easier rather than more difficult for customers. Less customization, more repeatability, and the same thing culturally. It’s simple, but not easy.”

Marcelo Cortes recounted challenges he’s faced as co-founder and chief architect at online wholesale platform Faire. “You can try to start scaling too early. In our experience, we thought we’d found product-market fit, but we actually hadn’t. Once we really found that, when the product-market fit triggered hyper growth and we had to scale, it became hard, trying to adjust everything. What made sense a month before when we had 30 people didn’t make sense once we had 50. So we had to really change things.”

Scaling boldly

For Ashira Lapin Gobrin, chief human resources officer at Miovision, addressing issues of scale requires boldness. “I think the biggest thing that gets in the way of scale, certainly for us in Canada, is fear. When we try to control things too much, we look for certainty too early. We miss that infinite possibility that’s in front of us.

“It actually takes a lot of courage to be a founder. You’ve got to have guts and be able to stick your head out and keep going when it’s really tough. Having a team around you that will help you stick to the things you know how to do well, and learn how to quickly break down the things that you don’t, is essential.”

“Especially when everything feels like a priority,” agreed Cortes. “The good thing for us was we maintained high growth rates even as we started to grow. We raised Series B, then three months later raised our Series C. We became a very large company, valuation-wise and in our size of business, but we were still only about 25 employees. We were hiring and creating departments that didn’t exist yet, putting things into place. For us, it then became very clear that our next priority should be economics.”

Tough choices and making it flow

Scaling in proportion to the market can demand difficult choices. For Faire, maintaining customer satisfaction during the early growth period presented tactical hurdles.

“When we were raising our Series A, we made a decision to allow our customers to return products,” said Cortes. “We went into the holiday season with everybody buying, but we had no idea what was going to happen in three months’ time. Some of our investors said they wanted us to see the holidays through before they gave us any more money. So as we were raising capital, we had January returns that were ridiculous. We couldn’t have board meetings in our office because it was full of products to be returned. But we had no option. We had to do it.”

For Maybank, managing scale comes down to three things: customers, capital, and talent. “Organizations only scale when people within the organization are scaling. If people aren’t scaling with their role, that’s a constraint. If they can’t expand their role to allow growth to flow, you have to find a way to make it flow.”

Gobrin also offered some guidance when those dilemmas arise. “Don’t forget to be in touch with your intuitive sense of what’s going on. There’s often a pattern you can’t see when you’re in the weeds, but just go with your instincts. What got you in the business in the first place? What connected you with the customers?

“There are things you know more than anyone else because you’ve researched the space, you’ve laid awake at night worrying. If something feels wrong, it’s probably wrong, and you’ll know it before anyone else on your team.”

Growing organically and finding the path

Wright offered similar advice, allowing growth to occur organically, rather than forcing increases in scale. “When acquiring companies, you’re following the advice of your more experienced investors and board members, but it’s really about learning how the deal works. Post-acquisition integration is really the starting line, because you can quickly lose control and lose the plot in terms of what you’re trying to achieve.

“If you’re buying and integrating companies that are somewhat profitable but you still remain unprofitable, that’s a time to stand back and reestablish your path. Yes, from outside your top line looks great. You’re celebrating successes and getting checkmarks from your board. But a year or two down the line, are you actually further ahead in your growth, or are you having to deal with tech debt, talent issues, splintering of your focus? How you actually want to achieve that organic growth is something to be really clear on.”

Culture and living your values

The discussion of addressing scale, especially in the early growth stages, led to questions of culture. How can founders establish an internal culture that supports scalable growth?

“Culture is such an interesting thing, because very often, it’s not intentional,” observed Gobrin. “It just happens. As the founder builds the culture, they have a value as the company’s personality and soul. Then, after a while, people leave or new people come in, and the culture changes. Some elements of the culture that thread through from the beginning of the story will be paramount. They’re part of the DNA and soul of the company. Then there are elements of the culture that absolutely have to change as you go along.

“Whether it’s in a fundraising round or any significant milestone, the culture needs to be clean, thought about, and reset. It’s not always as explicit as creating the right manifesto and formula. It’s how your leadership team shows up and creates the culture.”

Cortes agreed that a company’s culture begins with its founders, but as his company’s experience shows, it also has to evolve. “Initially, in our case, we were all very similar. We knew what we needed to do as founders and just went for it. We didn’t need a pat on the back or anybody celebrating what we were doing. We were focused on other things.

“Only later did we bring on other leaders. We needed to recognize that people have different behaviors, with different routines and rituals. Most companies have a mission statement. From my experience, a lot of companies do this because they’re told they should do it. You have to be intentional about your values, and really spend the time thinking about them and make sure to live them.”

“Culture gets this reputation as being sort of fluffy,” added Wright. “But actually, it’s just how the work gets done. Specifically, it’s how leadership walks the walk and does the things they say they want everybody else to do.”

Rituals and staying dynamic

For many companies, culture is lived out through specific workplace rituals. These practices, while often simple, can have meaningful effects.

“Every month I’ll have breakfast with the new employees,” said Cortes. “Even for every intern, I’m there the first week to tell them about the company and again on their last week to hear how their experience was. We also have a founder bootcamp, where every new hire goes to sessions, learning about different areas of the company. I always tell them, now that you’re here, you’ll add more to this story.”

“Rituals are founded on two key points,” said Maybank. “One is connection, and the other one is purpose. Giving the next generation a sense of connection to the past and the purposes of the next going forward.

“Culture isn’t just an internal dynamic. It should really be viewed as these external projections of your organization into the marketplace.

“In the short term, you can have a mismatch between the internal cultural dynamics and your brand, but not over the long term. You need to make sure that your culture is dynamic. As your organization changes, shifts will need to occur. Some of the things that made you great in the early days might not help you successfully scale up.”

“When I was much younger, I joined a company and on my first day they gave me an engraved nametag,” recalled Wright. “I thought it was so dorky, until I realized that every single person, including the executives and board members, wore them. One day I asked why, and was told it came from the founder. As the company grew, he knew he wouldn’t remember everyone’s name. So as an equalizer, we all wore nametags. It made it a lot easier to just go up and talk to somebody. This had lasted for decades. You saw people who had all their old tags lined up on their desks. It was a point of pride for the company.”

Value statements and promises kept

Often, companies and their founders will literalize their purposes through value statements. The panel agreed that while such statements are useful, they shouldn’t remain static.

“Values need to be renegotiated at certain times,” said Gobrin. “We all say a lot about trust and teamwork and integrity. But a company’s values should really be a set of behaviors that drive you from where you are today to where you’re capable. They aren’t just the personal values of the leaders. The brand is the promise the company makes to customers, and culture is the way we deliver on it. Values set the tone of that culture.”

Logistics and putting people first

As a company scales, challenges emerge daily—whether operational, geographical, or in unforeseen ways. Again, adaptability is key. Wright cited navigating time zones as one relatively minor but logistically significant issue.

“If you’re in PST and you’re working with a team in the U.K., and you’re always the one who takes the 7:00 a.m. side of that, it wears on you and your team. So in the day to day, someone takes an early meeting, another takes a late meeting. If you’re doing an all-hands and you’ve got an office in Australia, make sure it’s not two o’clock in the morning for those people.

“It’s about establishing norms and being mindful of how you’re impacting people’s lives. Logistics are the connective tissue that pulls it all together. Do you need to be more in person? Do you need to have more regular cadences that are conducive to being productive as well as effective?”

“It’s a myth that there’s one culture for an organization,” said Maybank. “As soon as you go cross-border, your customers change in their cultural attributes and behaviours. You want to adapt to each of those local markets and customer segments with a flexible framework that holds things together.”

Gobrin agreed. “Every culture has slight differences. Even if you’re speaking English as a common language, if you can’t translate and communicate across cultures, then you really lose a lot of connection with your employees and your customers.”

“When we first created our values, we were just 15 or 20 people,” Cortes recalled. “As we added more people and increased our market, we discussed our values. We also changed our mission statement to better reflect what we wanted our customers to know about what we do.”

“Values, mission, purpose, and vision need to stack as a system,” said Gobrin. “Make a list of five or six of your values, then ask yourself, what do you do when they conflict? Which are the most important? You can actually use a system of values as a roadmap or a decision-making tree, or as a diagnostic when things aren’t working.”

Wright agreed, albeit with a caveat. “You have to be careful when you rank your values like that. If you say you’re putting people first, you have to actually live that and be decisive. Any dissonance between what you say you’re about and what you’re actually doing is going to be problematic.

“You should be consistently looking at the mission and the ways you express it as an organization, depending on your size, your scale, and the given point in your business evolution.”

Values in action

Everyone on the panel agreed that values shouldn’t just be stated, but acted upon.

“You can change your values, but if you don’t actually make changes, then you haven’t really done anything,” Maybank stressed.

For Cortes, the pandemic provided a test of how his company acted on its values. “When COVID hit, we were growing super-fast. Then physical stores shut down, so we had to completely change. We’d talked about serving our community and putting our customers first—now we had to do it. We had to completely change the mood of the company to help our business survive. Our salespeople were helping customers get funding from the government or renegotiate their internet packages, things like that. It paid off for us after the fact. But it was a very hard decision to make at the time.”

Accelerating at scale

With AI and automation permeating all areas of business and life, companies face market pressures to accelerate the pace of their scale. Many companies have adopted an ethos of “move fast and break things.” But can companies scale too quickly? Amid such rapid growth, how can investors even know what they’re buying?

“With AI driving things, companies that were valued at a couple billion last December are now at $20, $30, $40 billion,” Maybank said. “But there’s real questions about their M.O. and their longer-term sustainable advantage, along with their ability to adapt in terms of product-market fit, their ability to backfill a product, or show product discipline across a life cycle. There’s a lack of infrastructure and unit economics analysis, of market cohesion and sales compensation structures. There’s a lot that just can’t be put in place quickly enough.

“As an investor, I would say: be wary. But if you happen to be that lucky CEO who’s surfing that wave, just go with it and have fun and enjoy the ride, because it doesn’t happen very often.”

Cortes also advises a degree of caution. “One thing that many people get wrong when going from a startup to a scale-up is they don’t build a solid foundation. Then, when they finally get to the market stage and the growth starts, things start to fall apart.”

As companies scale up, the sizes of their teams also inevitably increase. Making the leap to an expanding workforce can be a major change. How should founders change their leadership strategies to complement their team’s growth?

“As a leader, you need to have an insatiable willingness to learn, to look stupid, and be wrong,” said Wright. “You have to be willing to say: I know what I don’t know, then model that behavior. But also to keep trying and doing things, showing your team that this is going to be your shared future as you scale.”

How companies approach scale while remaining true to their founding principles is essential to creating and sustaining success. For these leaders, this requires more than just a neatly worded mission statement—it means creating, refining, and putting into action a strategy for growth that evolves alongside the people driving it.

RBCx offers support to startups in all stages of growth, backing some of Canada’s most daring tech companies and idea generators. We turn our experience, networks, and capital into your competitive advantage to help you scale and make a meaningful impact on the world. Speak with an RBCx Advisor to learn more about how we can help your business grow.