Krista Morgan | Crain's Denver

In this ongoing series, we ask executives, entrepreneurs and business leaders about mistakes that have shaped their business philosophy.

Krista Morgan

Background:  

P2Binvestor is a Denver-based financial technology company. Using a crowdlending platform, P2Binvestor provides lines of credit to growing businesses that can’t access bank financing. The company was founded in 2012 and currently has about 25 full-time employees.

The Mistake:

I didn’t focus on our biggest problem.

We had really good early success – like a million dollars in revenue in our first year – and I very quickly started to focus on things like people and culture and developing a management framework. I was thinking a lot about our external image.

But our biggest issue was figuring out how to build a scalable growth engine, and I was basically ignoring it.

There’s a big difference between being set up for long-term success and not. It’s easy to double your revenue at the beginning. It’s really hard to do that in a scalable way as you grow. I didn’t even take the easy step of matching up revenues to expenses. It would have been a simple way of looking at the real issue.

I took my eye off the ball.

This issue had wide-ranging consequences. Our leadership wasn’t aligned to address broader problems. Our finance person was worried about finance. Our operations person was worried about operations. Et cetera. Everyone was siloed.

I didn’t think it was a problem because I hired smart people to do these things. At a certain point, things started to not work as they should. We had a great head of sales, for example, and when things started going wrong in that area, I thought I’d just trust that person and let them deal with it. As the CEO, I thought I had more important things to be focusing on.

I spent more time working on problems I didn’t necessarily have yet, than fixing the really big problem that I already had.

We all understand the necessity of solving the company’s biggest problems together.

The Lesson:

It’s easy to get distracted, especially when you’re running a growing business, but you have to identify what your biggest issue is and focus on it.

There are just so many things people tell you are important. You can get caught in a situation where you try to do them all, and you end up doing them all poorly.

Not to say that culture doesn’t matter or that you shouldn’t put any thought into it; you do still want people to want to work for you. But if you don’t build a business that has the capacity to grow over time – a real company, as I like to think of it – then the culture doesn’t matter quite as much.

Right now at P2Bi, our biggest issue is a new go-to-market strategy. Rather than hiring someone to do that for us, I hired people to do the other things, freeing me up to work on that strategy. I’m leading the charge on figuring out how to make it work.

At the same time, our leadership is now much better aligned. No one is siloed. No one would say, “Oh, that’s not my department, not my problem.” We all understand the necessity of solving the company’s biggest problems together. Every part of the business touches those main problems, so each member of the team is critical to solving them and so is their cooperation.

Krista Morgan is on Twitter at @krismtl and P2Binvestor is at @P2Binvestor.

Photo courtesy of P2Bi.

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