BY PETER COHAN, FOUNDER PETER S. COHAN & ASSOCIATES@PETERCOHAN How can a founder turn their successful business idea into a fast-growing publicly traded company? As I wrote in Scaling Your Startup -- the textbook for my new Babson College course Scaling Strategy: Mastering the Four Stages From Idea to $10 Billion -- the answer is to move successfully through each of the four stages of scaling:
1. Winning your first customers: Developing a new product that customers are eager to buy.
2. Building a scalable business model: Redesigning your business processes so the company uses its cash more efficiently as it grows.
3. Sprinting to liquidity: Using a large capital infusion to grow the company to the point that it goes public.
4. Running the marathon: Sustaining double-digit revenue growth for years after the company lists its shares on the public market.
In the boom years that ended in 2021, startup CEOs skipped the second stage of scaling. When the IPO market shut down in 2022, those startups were burning through cash and venture capitalists stopped funding their losses.
Companies responded by shutting down, finding an acquirer, or cutting staff and scrambling to find ways to complete the second stage of scaling after jumping ahead to the third stage -- and failing to sprint to liquidity.
Tekion Needs to Scale Efficiently
This comes to mind in considering Tekion, a Pleasanton, California-based developer of a cloud platform to streamline the retail sales process and interactions between automakers, retailers, and consumers, Automotive News reported.
Launched in 2016 by former Tesla chief information officer Jay Vijayan, Tekion employs roughly 3,000 people and has raised $451 million in venture capital -- valuing the company at $3.5 billion the last time it raised capital in September 2021, according to Pitchbook.
Tekion reportedly dismissed some 300 employees in July. According to Inc42, after missing revenue targets it promised investors, Tekion cut 300 employees -- or "10 percent of Tekion's workforce from teams such as tech, sales, marketing, talent acquisition, and human resources."
How Generative A.I. Helps Tekion's Human Resources Department Do More
Tekion tells me it is growing fast and using generative A.I. to boost HR productivity and effectiveness. In an August 31 interview, Rana Robillard, Tekion's chief human resource officer, says the company is growing fast and generative A.I. is helping her department accomplish more without adding new HR staff.
Robillard -- who has helped prepare companies' HR departments for IPOs -- arrived at Tekion in February 2022. She found the company lacked the kinds of systems typical of 2,500-employee firms. "There were no ticketing systems. Most of the company's employees are in India and there was no standard way to answer employee questions -- they used email and Slack."
Tekion has helped solve the problem by building a generative A.I. chatbot -- informally known as Flashbot -- because it answers employee questions so efficiently. Based on technology from Leena.AI, Tekion trained the chatbot with internal information and it provides accurate answers, Robillard said.
This freed up the HR team to do "more impactful work -- such as onboarding, helping with employee leaves of absence, celebrating promotions, training, employee growth, and career conversations," she explained.
Tekion has also adopted other generative A.I. applications that help its HR department do more for company employees as the company scales. "We used Atlassian's Confluence for HR workflows. We have since expanded to BrightHire -- which records interviews with candidates, creates transcripts and suggests questions for the interviewer to ask the candidate," noted Robillard.
Tekion is also using a generative A.I. system to source candidates. With HireEZ, Tekion builds searches for sourcing candidates in the U.S. and India. In addition, the company uses ChatGPT to help draft job postings, processes, and policies, she explained.
Tekion's HR department sees compelling benefits from using generative A.I. "It does not cost me more and saves me from adding resources to do more manual work. It automates everything and we are scaling fast. We could not add enough resources if we were not using A.I.," concluded Robillard.
If your HR department is trying to get more done without adding staff, Tekion's generative A.I. strategy is worth investigating.