Four simple lessons to keep in mind when building a lasting business

Managing a startup for several years now, one of the biggest lesson I learned it,- as we say within our company – “Simple is smart”. Most of the time the answer to building a lasting business is in the simple habits. In this article, we will go through four simple lessons learned the hard way over the past years. Simple and smart.

1. Focus on the right KPIs

Beware of vanity metrics. Leading a company implies being able to explicit its vision into clear targets, KPIs for you and your team. The setting of these KPIs is crucial since it will influence your company’s direction and decisions. That’s why it is so important to find the metric that represents the essence of what you are building. In Jumia’s case, we are building an online marketplace, choosing Gross Merchandise Value (sum of value of goods sold) as ultimate KPI may seem obvious but would be an error. GMV doesn’t catch how you manage to build a community, how recurrent your clients are, how your vendor base develops… This was the mistake made by Flipkart that lead them to focus on sales and take wrong decisions (see very interesting article). Focus on phones category (high price but low recurrence of purchase) and develop direct sales to businesses in bulk (not developing their customer base) and this is how they ended-up building a business that wasn’t what they intended: impressive sales numbers but actually small and non-recurrent customer base. In the case of a marketplace, we are building a platform where offer and demand meet, our role is to develop communities (of customers and vendors), thus our leading KPI has to be focused on how we manage these communities: number of active vendors, number of customers purchasing again in the 60 days following their first purchase, number of acquired customers, customer and vendor satisfaction…

2. The importance of communicating the company’s vision

Once your are crystal clear on your company’s leading KPIs, communicate it, and do it well. The more your team understands the global vision, how it translates into main KPIs, targets, the more involved they will be. By doing so, you will give them the tools to take decisions and initiatives going in the right direction for your business. I ask my team to be always able to answer the question « how by doing what I am doing now am I contributing to the vision/mission of the company ». If they don’t know, they should ask their manager to understand or simply stop what they are doing. Everyone should understand how he/she contributes to the goals of the company.

Moreover, by making sure everyone understands the vision and targets, I found so many more initiatives coming from team members that were directly contributing to our end goal. All the company started pushing together in the same direction.

3. Don’t overplan. Take imperfect actions and learn

One of the biggest strengths I find in our company is the ability to learn by iteration. From the day I joined to today, we kept this approach to learning. Instead of overthinking plans, we encourage to test and learn by doing. This enables us to be in contact with reality and to understand and correct fast. This was  proved to be a great way of growing and learning fast, it only needs to be ability to accept and even more love the risk of failing.

4. Be careful of emails

In a lot of companies I know, emails are now more perceived as a nuisance than a benefit. Myself, receiving 400-500 mails a day I see that 1- I am becoming a bottleneck (people are waiting for an answer from me) 2- 85% of the mails received are just pollution (not expecting or bringing anything) and dilute the impact of important messages 3- email becomes distraction. Receiving an email every 3 minutes takes your attention away from what you are doing. Even if you don’t read it immediately, just seeing your phone lighten distracts you.

Even worst, over-use of email started to bring in the company some absurd situations: One day, 2 people sitting literally 2 meters from one another exchanged in 1 hour more than 15 messages to argue on one topic. instead of talking to each other and solve the problem in 2 minutes, they chose to spend 1 hours writing emails, of course putting 5 persons in copy that didn’t care at all about this specific topic.

The most efficient people I know have very strong routines to protect themselves from emails and use them efficiently: They define 2-3 time slots during the day when they manage their email, out of these periods they don’t look at them. They even disable automated email refresh on their phone. This way they invest in efficient time to go through their email, giving back the email its real utility: a reporting tool. In case of urgency, something to discuss or a quick decision to make, phone is always the best solution.