A growth entrepreneur’s tip for a good team: Don’t hire your course mate

Recruiting the right people and the owners’ capacity to take risks are crucial for a company’s growth.

Everyone makes mistakes, but you should learn from them, growth entrepreneur Lennu Keinänen urges.

Keinänen says that he himself has stepped on all possible mines, from market analyses to financing. Despite that, he has taken part in founding nine enterprises. Of these, the best known is Paytrail, a provider of online payment services. The Danish company Nets acquired 80 per cent of the enterprise two years ago.

However, Keinänen identifies the team and its importance as the biggest mine.

“Team members must have  sufficiently diverse backgrounds. It’s not necessarily a good idea to hire your course mate,” Keinänen points out.

In his view, building the right team can start once the entrepreneur understands what he or she is actually doing.

“Corporate culture must be created first. In the end, culture is shaped only through people, but its desired state must be known so that the entrepreneur can make the right recruitment choices.”

Despite his young age, Keinänen has already been an entrepreneur for 20 years. He set up his first enterprise, in Kuopio, at the age of 15. Growth, internationalisation and financing are all interlinked. Growth has always been at the core of Keinänen’s enterprises as well.

“Growth calls for bigger thinking, that is, leaving one’s own sandbox. One of the worst things is underfunding. Growth is always more expensive than you had originally thought,” says Keinänen.

He agrees with Kim Väisänen, a successful entrepreneur who says that a company has only one crisis and that is the cash crisis.

From bikinis to a growth track

Studies indicate that young people are eager to start their own enterprises. Young entrepreneurs have recently gained visibility otherwise, too, with the selection of the Young Entrepreneur of the Year in Jyväskylä last Friday.

Last year this recognition went to Varusteleka, which has also sought growth outside Finland.

One of the finalists this year was Biancaneve of Tampere, a maker of individual sports garments. Biancaneva was ranked third in the national competition. Entrepreneur Elina Loueranta acknowledges that she has also stepped on various mines.

“My dream was only to make clothes. At first I didn’t even calculate any profit margins,” Loueranta says.

The awakening came three years ago at a growth camp where other companies were making plans for internationalisation. “We were so small next to the others. One company was selling a million screws to Russia and we were talking about bikinis. We were asked if we really believed that we could grow and become international. It didn’t occur to me to answer that each bikini cost 600 euros,” Loueranta recalls.

Not even all of the team members believed in growth. The entrepreneur says that one team member aroused doubt in the others, too.

Intervening in the situation required a lot, but it was necessary.

“I stood up from behind the sewing machine and started to look at the big picture,” Loueranta says.

With its turnover of about half a million euros, Biancaneve is living a strong growth phase. This summer, the company is launching a webcam service that will allow customers to order Biancaneve’s tailored bikinis from anywhere in the world.

At present, growth is brought by a luxury-focused sportswear collection designed for women. The marketing of this product line also takes the entrepreneur outside Finland.

“We wanted to go abroad and we were asked whether we were ready to travel. Now this has come to pass. Relations can only be created face to face,” Loueranta concludes.

FACT: Ways to break the glass ceiling on growth

According to research, one out of five enterprises has hit the glass ceiling on growth.

The main factors keeping a glass ceiling on growth are sales and marketing skills, the availability of competent staff, the acquisition of financing and the capacity of owners to take risks.

Growth entrepreneurs believe that the glass ceiling can be broken if the management or the owners have sufficient capacity to take risks. That is the most important single way. Other important ways are product and service innovations, sales and marketing expertise, the availability of competent personnel and customer demand.

Obtaining adequate financial resources is another tool for breaking the glass ceiling.

This information is based on the Growth Enterprise Survey, conducted by the Kauppalehti business periodical and sent to 715 entrepreneurs, of whom 92 responded.

There are several financing solutions for working capital needs and for starting business abroad.

Text: Kimmo Koivikko