The Team Sport of Scaling a Business

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Brian Kenny: How many attempts does it take to create a killer mobile app? In the case of one Brazilian-based company, the magic number was 29 because the next app they created, PlayKids, became a global sensation, outselling educational apps from stalwarts like ABC and Disney. Today we’ll hear from Professor Lynda Applegate about her case entitled “Movile: Building a Global Technology Company.” I’m your host, Brian Kenny, and you’re listening to Cold Call.

Professor Lynda Applegate is the former head of the head of the Entrepreneurial Management Unit at Harvard Business School, and the current faculty chair of the Owner, President and Manager Program for Executives. Her research focus is on the challenges of building new ventures and leading radical business innovation, and both of those themes seem to apply to Movile. Lynda, welcome.

Lynda Applegate: Thank you Brian. It’s great to be here.

BK: So, let me ask you to set the case up for us. Tell us about the protagonist and what’s on his mind.

LA: The Movile case describes the evolution of the company, from its launch in 1998 by Fabricio Bloisi, who at the time was a 21-year-old recent college graduate with a degree in computer science from a state university in Southern Brazil. And it follows how he evolved the company continuing to evolve his own leadership to become a global, mobile content and commerce company.

BK: Twenty-one years old, pretty amazing to think about that. And in under 20 years, this enterprise has grown into a global enterprise with 700 employees I think.

LA: That’s right. The case is set in early 2015 as Bloisi reflects back on how Movile had grown from a small team of entrepreneurs creating text-messaging apps for mobile phones of the late 1990s in Brazil. And an example of that is the Motorola flip phone. Do you remember the Motorola flip phone?

BK: I do remember. I had one.

LA: Most people don’t realize that smart phones didn’t come out really for consumers until 2007. That’s when the launch of the iPhone was. It really wasn’t that popular before. And it certainly wasn’t popular in Brazil until later than that. So he started by selling these mobile apps, text messaging apps, to telecom providers in Brazil. At the time he only had a small entrepreneurial team. As I said, the case follows the evolution of the company until 2015. It’s actually what I call a real-time case, where the ink rubs off on your fingers. He now has evolved it to over 700 employees who work in 10 offices in Latin America, and have actually opened an office in Silicon Valley.

BK: What prompted you to write the case? Why were you interested in Movile?

LA: Well I’m interested, first of all, in how a global technology company—how some of the more recent global technology companies can become both big and small simultaneously; that they can be lean, performance-driven large global companies with all the power, resources, and reach of a large company, and yet they [maintain] at their core the hunger, agility, spirit and fire of a small company.

BK: What are some of the challenges and growing pains that they are facing, that Fabricio is facing, as he is moving down this path?

LA: Well Fabricio actually started by providing text messaging apps, and selling them to telecom providers in Brazil. You only had a few telecom providers, and there were no mobile app players back then. So he was able to come in with a very simple application developed by him and a few of his friends and start delivering that to the telecom providers who were able to reach many, many different users. In 2012, they started to try to find out: can we sell applications directly to consumers? They went through 29 different applications to see what would fit and it wasn’t until they developed PlayKids, one app that actually provides children with lots of mobile content, that they were able to then find an application that within months became a number-one application for children in Brazil, and then around the world.

BK: And they were smart in terms of how they built their partnerships around that app. They chose some interesting partners, like PBS, and other of the business-side players who could kind of grease the skids for them and get into those audiences.

LA: Yes, and what was interesting about that is they grew through acquisition. They received financing from a South African ecommerce giant, and were able to (in 2007) launch some of their ecommerce areas from that financing round. One of the things they did with the financing is they acquired a company called Yavox. Yavox actually did business mobile apps and their partners were Universal Studios and Globo in Brazil. So, they were able to access content by acquiring a company that actually had those relationships with the mobile payment companies, with the banks and mobile payment, and also with the content players.

BK: And Fabricio is probably in his late 20s at this point.

LA: That’s right.

BK: [Laughter]

LA: Exactly.

BK: Hard to imagine.

LA: So now he is probably in his late 20s.

BK: Can we talk about Fabricio as a leader today, as opposed to the 21-year-old that started this company? What’s his leadership style like?

LA: I always say that launching and scaling businesses is a team sport. You can’t understand Fabricio’s leadership unless you look at the people that are around him too. So when Movile started, there was one team of software developers. But as the company grew, they had to actually build out a leadership team. Where Fabricio really plays is in that innovator/strategist kind of role. He’s the one that’s looking out and saying, “Where do we need to go next?” and really thinking about where the company strategy is going to go. Around him, he has people like his current CFO, who is a tremendously solid at performance-driven kind of management systems and operating systems. He’s got a really good COO who really knows how to run today’s operations. He’s got a tremendous head of talent management who really knows how to attract and retain the best people. All of them work together to create that culture that allows the company to be a very strong, performance-driven, large organization with a very entrepreneurial culture that keeps the people, and the talent, and everyone excited about being part of a global tech company.

BK: For the emerging entrepreneur who is listening to this podcast who is wondering if it’s possible to grow to the size that they want to but still be entrepreneurial—what would you advise them to do?

LA: I’d say for sure, yes, it is possible. People have been studying and trying to identify how we can be big, and yet at the same time small and agile, and act like an entrepreneurial firm. Nowadays that’s possible. The second thing is, it used to be that people felt entrepreneurs didn’t scale. So there has been a lot of research that said that an entrepreneur had to give up his company or her company when they got big. And we now know that’s not true and, in fact, entrepreneurs can scale. There is some tremendous research that’s been done that shows that the firms, the entrepreneurs who are able to scale, have to surround themselves with a team that covers all four of those roles. More importantly, the entrepreneurial team needs to act like entrepreneurs. They have to think like entrepreneurs. And they have to be a team in more than name only. So they have to listen to one another. They have to respect one another. I find a lot of entrepreneurs, when they are building their teams, they try to find people that are just like them. And the truth of the matter is, you need people that play different roles as your organization scales. So you have to learn to respect those roles, and to listen to people who play those roles, and to work together as an executive team, even as the company grows.

BK: Great advice from Professor Lynda Applegate. Thank you for joining us.

LA: Thank you Brian for having me.

BK: You can find this case, along with thousands of others in the Harvard Business School case collection at HBR.org. I’m Brian Kenny. Thanks for listening to Cold Call, the official podcast of Harvard Business School.

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Brian Kenny: How many attempts does it take to create a killer mobile app? In the case of one Brazilian-based company, the magic number was 29 because the next app they created, PlayKids, became a global sensation, outselling educational apps from stalwarts like ABC and Disney. Today we’ll hear from Professor Lynda Applegate about her case entitled “Movile: Building a Global Technology Company.” I’m your host, Brian Kenny, and you’re listening to Cold Call.

Professor Lynda Applegate is the former head of the head of the Entrepreneurial Management Unit at Harvard Business School, and the current faculty chair of the Owner, President and Manager Program for Executives. Her research focus is on the challenges of building new ventures and leading radical business innovation, and both of those themes seem to apply to Movile. Lynda, welcome.

Lynda Applegate: Thank you Brian. It’s great to be here.

BK: So, let me ask you to set the case up for us. Tell us about the protagonist and what’s on his mind.

LA: The Movile case describes the evolution of the company, from its launch in 1998 by Fabricio Bloisi, who at the time was a 21-year-old recent college graduate with a degree in computer science from a state university in Southern Brazil. And it follows how he evolved the company continuing to evolve his own leadership to become a global, mobile content and commerce company.

BK: Twenty-one years old, pretty amazing to think about that. And in under 20 years, this enterprise has grown into a global enterprise with 700 employees I think.

LA: That’s right. The case is set in early 2015 as Bloisi reflects back on how Movile had grown from a small team of entrepreneurs creating text-messaging apps for mobile phones of the late 1990s in Brazil. And an example of that is the Motorola flip phone. Do you remember the Motorola flip phone?

BK: I do remember. I had one.

LA: Most people don’t realize that smart phones didn’t come out really for consumers until 2007. That’s when the launch of the iPhone was. It really wasn’t that popular before. And it certainly wasn’t popular in Brazil until later than that. So he started by selling these mobile apps, text messaging apps, to telecom providers in Brazil. At the time he only had a small entrepreneurial team. As I said, the case follows the evolution of the company until 2015. It’s actually what I call a real-time case, where the ink rubs off on your fingers. He now has evolved it to over 700 employees who work in 10 offices in Latin America, and have actually opened an office in Silicon Valley.

BK: What prompted you to write the case? Why were you interested in Movile?

LA: Well I’m interested, first of all, in how a global technology company—how some of the more recent global technology companies can become both big and small simultaneously; that they can be lean, performance-driven large global companies with all the power, resources, and reach of a large company, and yet they [maintain] at their core the hunger, agility, spirit and fire of a small company.

BK: What are some of the challenges and growing pains that they are facing, that Fabricio is facing, as he is moving down this path?

LA: Well Fabricio actually started by providing text messaging apps, and selling them to telecom providers in Brazil. You only had a few telecom providers, and there were no mobile app players back then. So he was able to come in with a very simple application developed by him and a few of his friends and start delivering that to the telecom providers who were able to reach many, many different users. In 2012, they started to try to find out: can we sell applications directly to consumers? They went through 29 different applications to see what would fit and it wasn’t until they developed PlayKids, one app that actually provides children with lots of mobile content, that they were able to then find an application that within months became a number-one application for children in Brazil, and then around the world.

BK: And they were smart in terms of how they built their partnerships around that app. They chose some interesting partners, like PBS, and other of the business-side players who could kind of grease the skids for them and get into those audiences.

LA: Yes, and what was interesting about that is they grew through acquisition. They received financing from a South African ecommerce giant, and were able to (in 2007) launch some of their ecommerce areas from that financing round. One of the things they did with the financing is they acquired a company called Yavox. Yavox actually did business mobile apps and their partners were Universal Studios and Globo in Brazil. So, they were able to access content by acquiring a company that actually had those relationships with the mobile payment companies, with the banks and mobile payment, and also with the content players.

BK: And Fabricio is probably in his late 20s at this point.

LA: That’s right.

BK: [Laughter]

LA: Exactly.

BK: Hard to imagine.

LA: So now he is probably in his late 20s.

BK: Can we talk about Fabricio as a leader today, as opposed to the 21-year-old that started this company? What’s his leadership style like?

LA: I always say that launching and scaling businesses is a team sport. You can’t understand Fabricio’s leadership unless you look at the people that are around him too. So when Movile started, there was one team of software developers. But as the company grew, they had to actually build out a leadership team. Where Fabricio really plays is in that innovator/strategist kind of role. He’s the one that’s looking out and saying, “Where do we need to go next?” and really thinking about where the company strategy is going to go. Around him, he has people like his current CFO, who is a tremendously solid at performance-driven kind of management systems and operating systems. He’s got a really good COO who really knows how to run today’s operations. He’s got a tremendous head of talent management who really knows how to attract and retain the best people. All of them work together to create that culture that allows the company to be a very strong, performance-driven, large organization with a very entrepreneurial culture that keeps the people, and the talent, and everyone excited about being part of a global tech company.

BK: For the emerging entrepreneur who is listening to this podcast who is wondering if it’s possible to grow to the size that they want to but still be entrepreneurial—what would you advise them to do?

LA: I’d say for sure, yes, it is possible. People have been studying and trying to identify how we can be big, and yet at the same time small and agile, and act like an entrepreneurial firm. Nowadays that’s possible. The second thing is, it used to be that people felt entrepreneurs didn’t scale. So there has been a lot of research that said that an entrepreneur had to give up his company or her company when they got big. And we now know that’s not true and, in fact, entrepreneurs can scale. There is some tremendous research that’s been done that shows that the firms, the entrepreneurs who are able to scale, have to surround themselves with a team that covers all four of those roles. More importantly, the entrepreneurial team needs to act like entrepreneurs. They have to think like entrepreneurs. And they have to be a team in more than name only. So they have to listen to one another. They have to respect one another. I find a lot of entrepreneurs, when they are building their teams, they try to find people that are just like them. And the truth of the matter is, you need people that play different roles as your organization scales. So you have to learn to respect those roles, and to listen to people who play those roles, and to work together as an executive team, even as the company grows.

BK: Great advice from Professor Lynda Applegate. Thank you for joining us.

LA: Thank you Brian for having me.

BK: You can find this case, along with thousands of others in the Harvard Business School case collection at HBR.org. I’m Brian Kenny. Thanks for listening to Cold Call, the official podcast of Harvard Business School.

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