Align Interview: Former Gemalto executive Martin McCourt on the equation for startup success

The Align Interview series offers the perspectives of  executives on technology, security and digital transformation.

Aspiring entrepreneurs take note: find a problem to solve if you want your startup to grow.  

“Startup equals problem. It’s a simple equation. Find a customer problem worth solving and solve it better than anyone else and you’re well on your way to creating a business that can succeed.”

That advice comes from Martin McCourt, who has more than 30 years of leadership experience in the technology industry. In addition to working at Gemalto as CMO and executive vice president for more than a decade, McCourt was also as a vice president at Corning and serves on the board of various technology companies. During his career, he’s handled sales and marketing, strategy, technology, mergers and acquisitions and finance.

“If you don’t find a good problem to work on for a good group of customers, then you’re not going to succeed. Some companies lose their way because they branch out too quickly into different areas. And some of them get carried away by the valuation of their last round. Success requires a single-minded focus on the customer” he said. 

In this Align Interview, McCourt talks about what business problems transcend verticals, what companies should focus on in 2020 and what makes startups successful. 

How do ideas contribute to a startup’s success? 

If you don’t solve a customer problem, you’re not going to get anywhere. And you need to do it better than anyone else. So a good idea is the starting point – it may be technology or it could be a business process. But the idea is not enough, you need customer validation. Some startups discover that their idea doesn’t interest customers or doesn’t stand out from the crowd. Getting this sort of feedback from real customers early in the process is key – it avoids you going down blind alleys. That’s why so many startups pivot, moving from their original concept to a different idea based on customer feedback.  

How can startups scale successfully?

In the very early days, there’s a core group. They see one another every day and can talk through everything together. As the business grows bigger, there’s no way everyone can be involved in everything. You add new people who have their own ways of working, you add new locations, and this transition can be difficult. As you grow you need to selectively add more structure and process. Some people aren’t comfortable with that and it can become a real source of tension.

Getting the balance right is really tricky. I’ve seen startups struggle because they’ve stuck with the founding team too long and others that brought in ‘professional managers’ too soon. An experienced board of directors can help here, acting as a sounding board (forgive the pun) for the CEO to think through the timing and pace of organizational change.

What makes some startups succeed and others fail?

If you don’t find an important problem to work on that matters to a material group of customers, then you’re fighting an uphill battle. And you need to stay focused – some companies branch out too quickly and lose their way. They expand into new geographies or create more product lines and lose focus. Simplicity is strength. One simple test you can apply – can you articulate what you do and why it matters in two or three sentences? If it takes you pages and pages of PowerPoint, you need to sharpen your pencil. 

To come up with great ideas and to execute them you need talent. Attracting and retaining the right type of talent for the phase that you are in is critical. And the profile of people that you need changes over time so you need to critically review if the organization is evolving as it should or are you hanging on to colleagues from the early days for sentimental rather than business reasons. 

So a lot of responsibility falls on the CEO’s shoulders, and they need to regularly review if they are still the right person for the job themselves. 

When you join a board, what do you look for in a company? 

The first thing is that the company needs to do good. It’s not sufficient to ‘do no evil’ as Google liked to say. I look for companies that make a positive impact on society. The second thing I look for is companies that solve a customer problem in a new and better way and that capture some of the value they create. 

Information security is a board level topic at some companies. As a board member, what do you want to hear about a company’s information security position? 

The board’s role is oversight, not operations. I think of security a bit like financial reporting, and it’s every bit as important. It’s a journey. You start with auditing. Then you move to policies. Then you work on the culture. And you ensure that you are using the most up to date technology.

I also want to hear how the company is controlling access to it’s IT environment. I want to know how they’re making sure it’s employees or partners or clients, rather than hackers, accessing those systems. This question of access management and strong authentication has been a headache for a while.

Passwords are the main method to control access to information. But they’re not ideal. Everybody forgets them. People write them down on Post-It notes. They get stolen in breaches. They get stolen in phishing scams. They don’t work very well. I’d like to know if they’re looking into passwordless authentication, especially for two factor. Hard tokens, which are still used for two-factor authentication, aren’t cheap and one-time codes aren’t ideal to use. Users have to wait to receive them by text or email and then type them in. I want to know if the company is looking into modern and secure methods that use biometrics.

From your experience on boards, are there any business problems that transcend companies and industries? 

At the risk of repeating myself, a single-minded focus on solving a customer problem and making sure you have the right talent in the organization are key to any business. The key talent decision, in fact the only talent decision, that the board makes is selecting the CEO. And thinking ahead for succession one day is really one of the most important things a board does. Good companies often fall into the trap of relying on a charismatic CEO to personify the company, to the point that you almost can’t imagine a day that they are no longer there. Then one day they stumble or do something negative and they’re out. Now what? Looking at this from a risk management perspective, there has to be a plan. What do you do if the CEO gets hit by lightning, or hired away by Google? 

What should companies be focusing on in 2020? 

If you look after your customers and your talent, everything else should look after itself. Now, if your question is so what’s special about 2020 compared to 2019, in the macro environment, there are a lot of things brewing. We have a trade war with east versus west. We have Brexit. These events could create shockwaves in the economy or at the very least uncertainty. And uncertainty generally creates delays. So stress test your plans so that if something goes awry you don’t get knocked over, and be ready to seize opportunities should they arise. Not all shocks are negative.

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