Chipper Lesson #2: On sustainable growth over exponential growth
the old wisdom in "slow and steady wins the race"
Thoughts on an ex (double unicorn)
When I joined Chipper in the beginning of 2021, the fintech world surged in optimism as the pandemic slowly drew to a close. If you are an avid follower of news in the African fintech space, you probably saw Chipper headlines in Techcrunch. A $100 million series C, followed by a extension round at $150 million, which brought our valuation to $2 billion. I followed all of this with wide eyed excitement even before being hired because I was so thrilled at the prospect of another rare African unicorn (a privately held startup valued at over $1 billion) in the making.
To put this into perspective, there are roughly 1,200 unicorns in America. Globally between 2013 and 2019, there are 70 female led unicorns. On the African continent there were only 6, and in 2021 Chipper became the 7th African unicorn. We had so much to prove to the world.
During that period, it felt like we were an unstoppable force, and the catchphrase “The Future is Chipper” stuck. But by the end of 2022, instead of expanding our team and impact, we too became victim to the tech industry’s bloodbath; laying off 15% of our staff in December, and then another 45% in February. Our dreams fell dismally short of the reality.
In the aftermath of the fintech crash, I've been contemplating the essential elements for building a successful long-term company.
Instead of propelling us towards triumph, the staggering raise we attained potentially harmed us in the long run. After our raise, Chipper's inflated sense of hubris caused us to lose sight of the importance of mindful scaling.
What this post covers:
What happened at Chipper: The patchwork mansion
Takeaways: Slow and steady wins the race
Final thoughts on the elements of winning teams
What happened at Chipper: The patchwork mansion
For months after our successful series C, Chipper basked in its newfound status as Africa's newest double unicorn. There was talk of us reaching 600 employees by year-end, venturing into additional markets across the continent, and expanding our product offerings for the African diaspora. Even as a newcomer, I couldn’t fight a rising pang of anxiety - this felt like a textbook example of diminishing marginal returns.
Barely two months after I joined as employee #240, we had already hired an additional 100 employees. Our operational infrastructure, initially designed for a team of 150, struggled to keep up with the influx of new hires who lacked proper onboarding. Most of us had limited knowledge of the precise problem we were solving for our customers, let alone a comprehensive understanding of our entire product range or desired expansion pathways.
I remember sharing my concerns with an executive leader through the metaphor of a patchwork mansion:
Some architects devised a grand plan to construct a magnificent mansion, starting with a blueprint. However, they faced a challenge—they lacked the workforce required to bring their vision to life swiftly. So, they hired a large crew of talented building constructors, hoping to accelerate the construction process.
The pace was so frantic that there was no time for clarifying a unified plan for the mansion's completion. Each skilled constructor, left to their own devices, interpreted the blueprint as they saw fit.
As a result, the mansion became a hodgepodge of design elements—gold-gilded bathrooms, minimalist kitchens, arabesque windows, and French sliding patio doors clashed in an unexpected fusion. Without clear direction and a unified vision, the dreams of a magnificent mansion had devolved into a patchwork of architectural elements, far removed from its original intent.
Eventually, working at Chipper felt like being staffed on this patchwork mansion, or - entering the multiverse of madness: everything, everywhere, all at once.
The Chipper glob monster
The executive understood immediately the metaphor I made, but no amount of onboarding, training, or powerpoint slides could match the dizzying pace with which we hired. We became a glob monster. The faster our team grew, our output slowed exponentially, at times reaching a point where it seemed to come to a complete standstill.
There simply wasn’t enough time for team members to establish trust among themselves or develop a profound understanding of the problem we aimed to solve—cross-border money transfers for the African community.
The anatomy of our glob monster:
🐌 Inefficiencies at horizontal levels: Due to a lack of time for intentional planning, departments gravitated towards siloed workforces without sharing information with key cross-functional stakeholders. Information flowed slowly. Crucial data about our customers and operations were scattered across multiple dashboards and notion pages.
Employees often noticed similar problems but didn't have effective communication channels to collaborate and ended up working on solutions independently, unknowingly duplicating their efforts. In some cases, employees spent months working on a problem only to find out later that their work wasn't needed because someone more appropriate was also working on it.
🌧️ Distrust at vertical levels: At some point, executives expressed discomfort over no longer personally knowing every employee. While this is an normal phase for all scaling teams, at Chipper this manifested into a breakdown in trust between leadership levels. The executives would make important decisions without involving the heads of departments. Only a handful of selected employees were given access to revenue and financial information. I was once told point blank that “transparency” wasn’t a Chipper value.
The intention was to safeguard the company's information and allow employees to dedicate more time to executing their tasks effectively. Instead, team members frequently faced difficulties in comprehending the rationale behind abrupt initiatives, and their managers remained equally unaware.
Takeaways: Slow and steady wins the (long) race
During a Futures Studies class at Stellenbosch, we learned that humans can be particularly naive when planning for the future. We often have a linear view of the world and fail to consider the cyclical nature of our industry. In the case of Chipper, we believed we could always raise more money and saw our positive trajectory as a guarantee of success, without realizing that the environment we relied on was actually a bubble.
That's not to imply that fast growth startups can't attain long-term sustainability. Investors can play a valuable role by helping founders set goals that can withstand unforeseen challenges. Without this foresight, massive rounds of funding and inexperienced teams can:
Lead the company to make sloppy spending decisions
Incentivize leadership to prioritize revenue goals, over their customer’s needs and team’s wellbeing
Create the illusion that more employees = higher productivity
In retrospect, it’s easy to blame leadership for the Chipper glob monster. But in the grand scheme of things, Chipper was simply caught up in the same macro trend as other tech entrepreneurs. In an age of easily accessible funding, so many of us prioritized rapid scaling to capture a competitive market share, trusting that profits would rake in later.
🐰 In our case, the unintended consequences of rapid growth resulted in:
Unrealistic revenue expectations, pushing for exponential returns on investment
Diminished autonomy for founders to prioritize the company's vision and values
Excessive spending on flashy marketing without a deep understanding of unique customer acquisition strategies
Productivity decrease as a result of rapid hiring, without an adequate operational structure to support a larger workforce
Burnout due to a high volume of concurrent initiatives and work that often goes unnoticed
🐢 While instead, a leaner Chipper team might have been better equipped to:
Innovate within the framework of the company's objectives while remaining aligned with their core values
Think more critically around spending strategies, and come up with creative solutions for budgeting constraints
Evolve communication and operational structures over time as needed
Explore alternative ownership models that make employees key company stakeholders, with a genuine stake in the company's successes
Make aligned decisions. In slower growth teams, information is less likely to be lost across teams and communication channels
Grow at a more sustainable pace and with a deeper focus on customers, without moonshot expectations to impress investors
Work in a culture underpinned by empathy as employees have more time to build meaningful relationships with one another
Final thoughts:
Chipper Cash was a wild ride, and despite our mistakes - we had a skilled team that I was proud to work with. My journey taught me hard lessons about the pitfalls of rapid scaling and the importance of mindful, less glamorous growth. I also recognize that as an employee it's easy to assign blame, and far more difficult to be a founder with the weight of the company on your shoulders. We all believed in creating a better future for the African diaspora, as well as the world. It’s a vision I still carry with me, and I sincerely hope that Chipper is now winning with a stronger, leaner team.
I hope we all defeat our glob monsters. I hope we can begin to draw more inspiration not only from the shining success of founders on the cover of Forbes 30 under 30, but also from those heads-down heroes who quietly work towards their company’s mission with long-term foresight. Sustainable growth may not immediately fulfill the widespread public recognition many of us desire, but I do believe there is a profound joy to be found in the slower, deeper impact we make in the lives of those we serve and work with.
Hahaha, this was an hilarious and yet stellar write up!