How scaling a business with multiple founders can be challenging

Scaling up

With a background as a doctor Hjalmar Ståhlberg Nordegren, CEO of food waste app Karma has always been passionate about solving big problems.

Here he explains that launching a business is all about problem solving. However, doing this on your own is difficult.

I was keen to partner with a range of others to work together on a new venture.

As someone who has always been hands-on and able to execute creative business ideas, I needed a group of co-founders who would complement my skills. Working with Elsa Bernadotte, Mattis Larsson and Ludvig Berling, we launched the Karma platform in 2016. It started out as a deal website, but we soon realised that customers were particularly interested in discounted food.

After a few different ideas, we stumbled on the problem of food waste – one of the biggest challenges facing humanity today. Research shows that the amount of food wasted annually weighs 1.3 billion tonnes and is valued at $1 trillion, all while 821 million people are starving right across the globe. Karma then became a business dedicated to solving this issue. Our aim is working with restaurants, cafes and retailers to help them resell food that would otherwise be thrown out.

At the start of our business journey, having a strong group of founders who could work together effectively was paramount. We’ve always operated in a very competitive market and were clear from the start that working together to build a viable and unique product was important. The benefit was that we all had different backgrounds, expertise and skills we could leverage to build Karma.

Using my experience in two different pressurised environments, I’m able to work under pressure and turn concepts into real-life business opportunities. Elsa, our chief operating officer, has also had success running her own business and is brilliant at executing strategies. Mattis (our chief technology officer) has an extensive background in engineering, and Ludvig (chief product officer) is exceptional at product management.

Having this range of analytical, execution and skill skills is crucial for developing and ultimately growing a technology business. It would have been virtually impossible for me to come up with the idea for and launch Karma on my own. Together, we’ve been able to combine our different skills to build the Karma platform and turn it into a lucrative business.

But when you look to move from creating to scaling a company and remain unique in a competitive industry, the way you work as a founding team changes significantly. While Karma wouldn’t exist without its founding team, we’ve learnt that scaling as a large team can be challenging unless you put the right processes in place to ensure everyone keeps working together in an effective manner.

When you first launch a company, with just a handful of customers and decisions to make, it’s easier to make those decisions. However, when you expand, develop new services and cater for a growing customer base, things change. Having too many voices at the top in all issues can be a massive curveball and can have a detrimental effect on business growth.

Business growth is a blessing, although it can be a curse in that there are suddenly a million decisions to make. To maximise the opportunity, founders must ask themselves how they’re going to work together in the future. In the beginning, when you don’t have a big team, founders are pretty much responsible for all aspects of the business: sales, product development, marketing and finance.

However, this approach doesn’t scale when you become a larger team of 15-30 people. You need to develop a new set of leadership skills where you’re less hands on and more a helping hand to pass on everything you’ve learnt to a new group of people. That’s a skillset you rarely have to use when starting the business.

When more decisions have to be made in an increasingly complex environment and responsibility is spread across multiple founders, it becomes challenging to agree on and implement business decisions as not everyone has insight enough to make a sound decision. You either end up falling out with your founders, or important decisions get put on the backburner for another occasion to discuss. Both scenarios usually mean a growth slowdown, which isn’t helpful for anyone..

When it comes to scaling your business and operating at speed, having an effective and streamlined decision-making process is important. You can only do that by delegating responsibility to a smaller number of people, rather having it spread too widely. To do this, we met to consider our roles and the leadership structure going forward. We all agreed that working together as founders would continue to be important, but that we would all need more focus in our day-to-day roles.

Collectively, we came to the decision that we all had to be more than just a founder. Nothing will ever change the fact that you’re a founder, but that doesn’t necessarily mean you’re going to be the best leader in all stages of the business. We posed a question: What else are you doing at the company other than simply being a co-founder? Asking that early on is important if you want to continue to succeed as a team of founders.

After a lengthy conversation about our future, we decided that Elsa and I would lead the direction of the business. Meanwhile, Ludvig and Mattis would focus on the technology and product development side of things. This hasn’t meant they’re no longer important when it comes to making company-wide decisions; in fact it’s the opposite. It just means that we can all focus on our individual strengths. This decision can be seen as harsh or unfair – after all, we’re all co-founders. But the resulting structure is one that’s not only faster and with less friction but also one that is individually tailored to all four of us and one that takes a lot of stress and pressure off of us.

Of course, having this discussion was far from easy. It’s really difficult because you’ll have to ask many tough questions around business priorities and who should be doing what. But we certainly wouldn’t be where we are today if we hadn’t sat down and made changes to our leadership hierarchy. We’re now a global company of 85 people, so being clear on leadership is important.

When having these tough conversations, it’s important to be honest with yourself and those around you. For any founder, they’ll be passionate about the business and its future. So they will understand if issues are affecting a part of the company and that finding a solution is a must. What’s also important is creating an open environment where everyone can provide and respond to feedback.

Rome wasn’t built in a day, so don’t expect such decisions to work overnight. As a team, you’ll learn along the way and will be able to refine any processes you’ve put into place. I’ve definitely made loads of mistakes, but if you don’t make them, you’d never be able to improve. Fail fast and learn from it until you succeed. It’s all about continually improving. Although Elsa and I are leading the business, the support of the other two founders is important. We all learn from each other on a daily basis. Scaling a business is about teamwork, but with the correct process to aid growth.

Karma wouldn’t exist without the four of us, and I hope this article can serve as a helping guide that you indeed can work to scale yourselves as founders during the journey of building a company. It might not be the journey you all imagined, where you’re all on top making unanimous decisions for eternity. However, it’s a future where you’re still doing it all together. You’ll hear a lot of stories about co-founders being ousted along the incredible journeys of company building. But if you actively work with your co-founders early on and dare to have the tough conversations, there’s a lot to gain.