My biggest mistake: Kim Teo, co-founder of Mr Yum
Mr Yum has collected more than $100 million in venture capital to date, helping it expand overseas and launch acquisitions of its own. And yet, along the way, mistakes were made.
There are so many ways a startup can go wrong. But last year’s Smart50 Rising Star award winner Mr Yum seems to have got it right.
After re-imagining the traditional restaurant menu in 2018, Mr Yum pivoted to deliveries when COVID-19 restrictions closed hospitality venues nationwide.
Then, when diners returned, the Melbourne startup revamped table ordering with its QR code system, giving restaurants a new way to interact with their guests.
The Melbourne-based startup has collected more than $100 million in venture capital to date, helping it expand overseas and launch acquisitions of its own.
How, then, could the company have made an error — let alone one significant enough to be deemed its ‘biggest mistake’?
Unlike other startups, Mr Yum’s mistake wasn’t a product launch, a venture into a new market, or its response to the COVID-19 pandemic, its co-founder Kim Teo told SmartCompany Plus.
Rather, it was two interrelated issues: Mr Yum’s decision to go without a centralised data system, and waiting too long to hire an operations team to act on that information.
They were choices which had a profound impact on the firm’s efficiency and scalability, Teo says, even as it changed the ordering habits of diners across Australia.
The mistake
As restaurants adopted Mr Yum’s menu technology, the company learned an enormous amount about its clients, how it should integrate with their backend systems, and which markets showed the strongest growth potential.
But until relatively recently, there was no easy way for Mr Yum to house that treasure trove of data in one place.
The company was too busy figuring out its market fit and building its tech offerings in the early days to concern itself with a “single source of truth on performance metrics”, Teo says.
Mr Yum spread that customer data across three separate systems, a decision which kept the team from operating at its peak capacity.
“The sales team would do their own reporting, the account management team would do their own reporting,” Teo said.
“And the biggest challenge with that is people were reporting on different numbers and they were using different sources of data.”
Mr Yum eventually implemented its first Hubspot CRM system 18 months into the company’s journey, “which we probably should have done on day one”.
Mr Yum would have been “much stronger” with a centralised “operations and enablement” function in the business from the onset, she adds.
The context
Teo says the company was initially focused on doing things that don’t scale: meeting with prospective customers, hearing their thoughts, and building a product around their specific needs.
At that point, fully streamlined operations and data hygiene took second place to actually getting Mr Yum into the hands of potential users.
“We didn’t place an importance on [data management] in the early days because we probably over-valued ‘scrappiness,’” she said.
Teo — and her co-founders Kerry Osborn, Adrian Osman and Andrei Miulescu — also took on as much of that work as they could handle themselves.
Mr Yum co-founders (left to right) Andrei Miulescu, Kim Teo, Kerry Osborn and Adrian Osman. Source: supplied.
At the same time, each new hire had to help drive that growth. Hiring staff to streamline internal operations was a secondary priority.
“I think we leaned towards hiring people who could build and hiring people who could sell,” she said.
“So we over-indexed on hiring salespeople and engineers, without understanding that the salespeople have a maximum efficiency without a good engine to run the day-to-day.”
The impact
Mr Yum’s rapid growth resulted in a firehose of vital data. Making sense of it was a time-consuming process.
The problem was exacerbated when Mr Yum had to pull metrics together for its capital raising operations.
Incredibly, Mr Yum launched its first Hubspot system just four months before its $89 million Series A round in November of last year.
Speaking with a little disbelief at the company’s prior systems, Teo says Mr Yum resorted to “meshing data together” and exporting “scrappy” datasets from multiple places, including its new Hubspot platform.
“We didn’t even have good historical data,” she said, meaning the data-gathering phase was far more laborious than it could have been.
A clearer read of the company data could have helped Mr Yum after its Series A round too, and a lack of insight may have led to Mr Yum investing in “nice-to-haves” instead of business priorities.
“If an investor gives you $10 million, you want to know, as a founder, how to spend that money,” she said.
“And without good tools, you don’t have the metrics to show you what is a more effective use of your dollars.”
It also impacted Mr Yum’s rollout to new markets.
While its expansion to New Zealand has been a success, Teo says having a clearer view of the data would have shown Mr Yum could have channeled its efforts into other markets earlier than it did.
A lack of dedicated operational staff also took away resources from other business functions.
As there was no standalone staff to guide new hires, onboarding fresh personnel was a drag on the core team’s productivity.
“It’s almost like, if you don’t have an enablement function, you lose your productivity for a while before you gain the productivity back,” Teo said.
All told, the lack of a single “source of truth”, and the decision not to hire operational staff earlier, had a considerable impact on the business.
“We feel like we’ve mostly run on instinct, which is one way to do it, but it’s not scalable,” she added.
The fix
Over the past few months, Mr Yum has overhauled its data management systems and retooled its proprietary platform to mesh with Hubspot.
“Now we’ve aggregated the two, it’s like a holy grail,” she said. “We’ve aggregated those two systems into our [business intelligence] tools.”
Mr Yum can now visualise how long it takes to welcome a new restaurant into its fold, a data point which can help the company identify pain points for new hospitality customers.
“It’s taken a lot of engineering work to bring those systems together, but fuck, it’s worth it,” she said.
On the fund-raising side of the business, access to that data serves as a kind of “live investment deck”, meaning Mr Yum could ready its numbers for a pitch on short notice.
Mr Yum has also hired a sales enablement director to assist the sales team perform at its peak, while Teo and Osman now have chief of staff reporting to them.
“They have no other responsibility in the business other than to like, get the engine running and humming and take work off your plate, and think about the things that you might not have the time to focus on,” she said.
“And having two of them has been amazing… having these central roles that maybe don’t have a quota attached to their name has been really transformational.”
The lesson
Even if the mistake was hard to see from the outside, the lesson is clear internally.
“Not having an operations and enablement person or function at the start creates a lot of pain for everyone else,” Teo said.
As for the data?
“The impact [those changes] are having on the business, it’s like, ‘We fuckin’ should have done that earlier,” she said with a laugh.
Teo says she wishes Mr Yum put those processes in place months ago, and well before the team expanded through the acquisition of MyGuestlist.
“It’s an easily neglected, overlooked area of business,” but “if you wait too long, it gets harder and harder.”
“I just think I think it was I think it was a lack of experience,” she said.
“We’d never worked in a company that had put such a big focus on operations and enablement.
“And it wasn’t until we hired some executives that had worked in teams that had great ops and enablement functions, did we really realize what we were missing.”
Teo says the decision to go without those critical data and personnel systems was largely the result of inexpierence.
Now, as other founders now turn to Teo, Osman, and the broader Mr Yum team as an example of how to launch a startup the right way, she offered some advice to new entrepreneurs.
“Go early, implement these kinds of single source of truth systems, and have great team members to run those systems,” she said.
