Four tips on how to scale your startup from the founder of health.com.au

Despite being only two years old, insurance startup health.com.au now provides more than 80,000 Australians with private health insurance.

The business turned over $85 million in the 2013-14 financial year, propelling it into the top 15 Australian health funds in terms of market share. Looking ahead, the business hopes to hit the $100 million mark by the end of the 2014 calendar year and doesn’t expect to slow down any time soon.

StartupSmart spoke to founder and chief executive Andy Sheats about how to successfully scale your startup without straying too far from your original vision.

1. Put your users first

Sheats says he originally founded health.com.au because he wanted to bring a contemporary online customer experience to “a really old school industry”.

“We’re always looking for ways we can create better customer service and not have to add as many staff,” he says. “The issue is our customers don’t really want to talks to us – what they really want is to not have any problems.”

Sheats is quick to point out that a good customer experience can help any startup make an impact in a competitive market.

“Build a service model that actually scales and not just throw bodies at problems,” he says.

2. Be agile

Sheats says he and his team employed an “agile methodology” right from the outset. His advice is for other startups to “plan, do, learn and do it again”. Creating a minimal viable product and seeing how customers respond is crucial.

“That’s been a phenomenally useful way for us to scale,” he says. “We’re making short bursts of activity and spending time on priorities when customers come across a problem.”

Sheats says his team scaled health.com.au in increments rather than all at once. With an 85% increase in sales this year alone, the approach seems to be paying dividends.

“We were just very careful about where we put our time and not planning so far into the future,” Sheats says.

3. Use your downtime to plan ahead

One of the realities of the insurance industry is that sales are largely seasonal. During March, April, May and June there is a “massive rush” and health insurers make a lot of sales.

However, after that time business returns to a steadier pace and the office becomes less frantic. Sheats says it’s important to use this time to do a critical self-evaluation.

“What worked, what didn’t work? Where are the areas we could really improve in customer services?

“With other businesses it’s been a sprint until the end. But the seasonality is a cycle we take advantage of. Go and prepare for the next battle.”

4. Shift your focus once you get customers

Sheats says one of the major hurdles he had to overcome with health.com.au was the transition from being a project in its developmental stage to an actual business.

He says the key is to make sure you have clear personal goals. It’s also important employees understand what their roles are once the startup begins to attract customers and revenue starts to come in.

“The big lesson for me was the day you get your first customer you actually have to change gears in how you run the business,” he says. “When you get customers, people need more clarity. A conscious switch at that point would be really wise.”

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