A navigation startup pivots and grows, but profitability is still down the road

• What3Words is a navigation startup that began life as a consumer product, but pivoted to BtoB.
• A major milestone was signing Mercdedes-Benz as a client in February 2019.
• While now boasting 100 employees, What3Words does not anticipate adding new staff over the next 12-24 months and is instead focused on profitability.
• This article is part of a series on growing a small business, "From 1 to 100."

Navigation startup What3Words has successfully grown to more than 100 employees by rethinking its main consumer base, and adapting its strategy accordingly. Even though it has hit that threshold, the company is still working towards profiability.

The concept behind What3Words takes a little explaining. The London-based company has given every 3m x 3m square on the planet a unique three-word combo. The idea is to simplify identification of very specific places around the globe. No two combos are the same, and visitors to What3Words.com can even search their home address to see what unique code they've been assigned.

"It's very convenient that there are enough combinations of three words that you can name all of the 57 trillion three meter squares in the world uniquely," said cofounder Chris Sheldrick.

The goal is to establish a global standard for location. It started out as a purely consumer offering in 2013, but struggled when it struggled to find a path to monetization, it pivoted to B2B. The business hit a major milestone in February last year when it signed car giant Mercedes-Benz as its first automotive customer.

Mercedes-Benz has integrated What3Words into its in-car navigation systems so that drivers can say or type a three-word address to find out exactly where a destination is. What3Words makes money by charging Mercedes-Benz to turn text into coordinates with the What3Words geocoding API. "If you want to turn three-word address into coordinates, and you want to get out of high volume, then we charge for that process," Sheldrick said.

In addition to car manufacturers, What3Words is also trying to convince ride-sharing, ecommerce, travel, and logistics companies to integrate its technology. Doing so isn't always easy though. As it stands, there is no What3Words integration with Google Maps and Apple Maps, the two biggest navigation platforms worldwide, or with ride-sharing heavyweight Uber.

What3Words has been able to bring on more users by making the service available in multiple languages. Today, it works in 37 different languages and it has been integrated with more than 1,000 different products, Sheldrick said.

Sheldrick is reluctant to talk about exact customer numbers, or financials, but a quick look on UK company register Companies House shows that What3Words had losses of £11 million in 2018 and a turnover of £273,641. The company has raised £50 million from investors.

Despite the losses, the staff headcount at What3Words hit 100 people at some point in 2019, but it wasn't a landmark occasion for the company. "Getting to 100 people was not something that we either celebrated or aspired towards," Sheldrick said, adding that he's more interested in other metrics.

Sheldrick is comfortable with the team size and he isn't expecting it to grow too significantly over the next 12-24 months. The hiring strategy has shifted to incorpoate more expertise in key operations, including marketing.

"We're at the stage of the company where now we have specialists in all of the areas that we want to have specialists in," Sheldrick said. "That's also a huge change from 10 people to 100. At 10 you need generalists and at 100 you need specialists. At this stage, if we're growing more, it's generally to hire two people who have a very specific skillset."

What3Words uses a team of three internal recruiters to hire people instead of outside recruitment agencies. "For those guys to be part of the core team means that they have a much better understanding of the culture fit and the skills which are needed," Sheldrick said.

Recruiting people at What3Words isn't as hard as it could be, according to Sheldrick. "The fact that we're working on such diverse things from the future of mobility, voice recognition, emergency services, and NGOs," he said, "I think it's just a naturally interesting collection of things that a lot of people here are absorbed by the diversity of what we work on."

Looking ahead, Sheldrick is keen to make What3Words a "good, solid business," which means reducing losses and striving towards profitability.

Ultimately, he wants us all to know the three-word address for where we live, work, and socialize. Getting there is still a work in progress.