Ask the Expert: How Gorillas Mastered Hypergrowth
“I think one of the secrets to successful hypergrowth is that attitude is more important than skills. You need people that are not afraid of big expansion plans, hard work, and whom you can trust.”
Back in March 2021, delivery scale-up Gorillas reached unicorn valuation within a year of its founding. Needless to say, its meteoric rise and hypergrowth has come with challenges and learnings.
At our first CFO Connect hybrid event in Berlin, Spendesk Head of Communications Benjamin Romberg spoke with Lucas de Jong, Senior Finance Director at Gorillas. They discussed the key strategies that crowned Gorillas as the “fastest-ever unicorn in Europe”, and what the company has planned next.
Watch the full event replay, or read on for key highlights from Lucas’ interview!
Lucas’ career: from traditional accounting to startup hypergrowth
I started my career at PWC. My first five years were in the Netherlands, and then I decided to go to Berlin. This led me to work in PWC’s team, auditing startups.
I keep telling people that this auditing job is one of the best you can do! Every two or three weeks, you get the opportunity to visit a different company, to look within the box, to understand how it’s organized, what the underlying cash flows are… That's where I got all my early finance knowledge from.
Auditing is also a great opportunity to get to know a lot of people, because you see so many different companies. During my time at PWC, I met a lot of fantastic people and, in the end, that piece of network also brought me first at Omio, a travel tech startup. Through Omio, I then joined Tier Mobility, and after a year, I was offered a position at Gorillas, which I accepted.
I always say startup lives are like the lives of a cat. One year at a startup feels like five years! Besides, the startup scene in Berlin is quite compact, and in the end people move around a lot. So, the current team I'm working with is basically the team I was working with at Tier Mobility as well. I think this is one of the secrets to successful hypergrowth. Attitude is more important than skills, because you need people that are not afraid of hard work, and whom you can trust.
Launching the finance team from scratch
When you join a company and you're the first finance guy there, you’re taking over from office management that has basically done everything to that point. People, IT, legal, finance… Literally everything! In the early days of a startup, finance is not the most important function.
I remember joining when the office was just one room, nothing else. There were three tables and six people sitting there.
It was also the time when every two days somebody from the operations would run in and say, "Let everything fall out of your hands. We need riders, right now." And so, we would basically close our laptops, go to the warehouse, put on a suit and deliver the orders. There was definitely a lot going on during these early days! Sometimes I do miss it, but I'm also quite happy with where we stand right now.
The key steps to anticipate hypergrowth
As an auditor, I've seen a lot of startups and their usual processes. With a small team, you typically start by outsourcing your accounting, and working with tech advisors who provide your numbers. Then the next step is hiring a finance team and bringing the accounting in-house.
We skipped that entire first part at Gorillas. When I arrived, the first thing we did was implement an ERP system. I've seen 10 year-old startups without a system, but we did it in six weeks. I think it’s essential to be able to rely on a thorough organization and solid processes from the very beginning.
We also started hiring like crazy. We recruited really experienced leaders, but we also got some people on the team that had never worked in finance. What was important for us was the mentality. If you're streetwise, you adapt in a matter of weeks. We also hired people from the warehouses, who are as valuable as the other talent who had 10 years of experience.
It is important to have people with different fields of expertise: controlling, commercial finance, accounting, treasury, tax, finance systems…
One of my key hires was our Head of Accounting, who ensures that I keep my hands free during the month-end close. Treasury was also a key hire. If you expand to a lot of countries, you have to deal with several banks, lawyers, and local chambers of commerce. These two profiles were the main pillars to secure our hypergrowth.
The tools that support Gorillas’ growth
NetSuite is one of the backbones of the finance department, and the fact that we actually had this piece in place just six weeks after we started was crucial. We also use some add-ons on NetSuite, some OCR, and bank reconciliation tools that are great.
Spendesk is an important tool as well, and of course we still use Excel a lot.
We’re in a heavy operational business, so we have plenty of locations, loads of employees, and loads of invoices coming in. In order to support hypergrowth, you have to make sure you cover these key processes. Because in the end, the business isn’t going to wait for you to be ready.
The key mistakes to avoid during hypergrowth
Hypergrowth is all about finding balance: finding the right partners is key.
For example, banks are super important and also a bit of an area where you can't really win. Nobody's ever going to say, "The opening of this bank account went great, it was flawless!"
On a more personal note, one thing I’ve sometimes forgotten is taking care of oneself. Starting in this kind of company, at this stage of growth, completely turns your life around. I gained 10 kilos, I've had sleepless nights, sometimes at our office. I remember coming into the office at 8am in the morning and hearing a sound. As I was looking around, I found a colleague sleeping in the office. That shows how much effort people put in. I've seen myself fall asleep on the couch of family and friends at 6pm because I was exhausted. You put so much energy in the job, and that's something I think I might do a bit differently nowadays. I’d take more care of myself.
Building a successful business is a marathon, not a sprint - although hypergrowth is a sprint. As a team, you all have this common goal and you work really hard. But it's also very important to understand it has a huge impact on your life, the people you live with, the ones you work with...so you have to make sure you’re happy. I think that's a very important lesson.
The key metrics investors look at
Top line revenue is probably the most important metric for investors.
And second is efficiency. In the delivery business, if somebody delivers one order an hour, your delivery fees would be extremely high. So our utilization rate is also important, especially in our financial planning.
Lastly, investors are also very interested in our profitability, and our market share!
Looking beyond hypergrowth – what’s next for Gorillas?
I think we're still at the very beginning of our adventure here.
This whole delivery and grocery business is still at its very start, and I'm convinced that this is never going to go away. The experience of ordering and getting things quickly is becoming more amazing every day.
Of course, they’re both good points and bad points, and improvements to consider in our model. But I think from now on, it will be about how we’re going to improve our processes. We need to ask ourselves what our customers actually want. And then, we have to figure out how we’re going to make sure we’re getting it to them. From here on out, we need to focus on continuous improvement.