The Jungle, The Dirt Road & The Freeway:
Different Stages of a Company
|The Hard Fork by Marvin Liao||Nov 21, 2020||4|
I have spent a lot of time thinking about this topic.
Why do superstars do so well in one company but flame out in another. I’ve watched this and even experienced this personally in my 21 year career in tech. Having been an early employee (17 or 18) in a startup that scaled to 150 people in a year and then the reverse during the dotcom bubble bursting in 2000. Joining Yahoo! when it was less than 3000 people worldwide, then growing to over 15,000 employees. Also joining 500 Startups when it was sub 30 people and watching it grow to over 150 people in two years. I’ve also seen this in the multitude of portfolio companies which have scaled.
I think much of this can be explained by phase of where a company is at. I used the analogy of Jungle, Dirt Road and the Freeway. I think a better analogy would be Commandos, Infantry & Policemen.
In the earliest phase, you need commandos who will break all the rules to take the beach. These folks are self starters, highly entrepreneurial and do not follow any processes, nor do they need much guidance.
Then you need infantrymen to come in and establish the beach head. And for all intents and purposes expand and scale. These folks are the ones to start putting in processes and some level of structure to grow. They set up the initial playbooks for scaling.
Then finally you have the policemen. These are the folks who come in to fine-tune the playbooks and make sure people follow them to a tee. You could even call them Bureaucrats.
Having experienced all these stages of a company, I've personally found that I tend to do well in the late commando stage. I have also thrived in the infantry phase. But have little interest & inclination and little effectiveness in the policeman phase.
In an interview with Charlie Songhurst he distils it down to even more distinct phases.
Pre-Seed to Seed: Team coming together and being effective
Seed to Series A: Getting to Product Market Fit
Series A: scaling where you need formal management. You need to carefully manage Output of Productivity as you grow. More people is not always more productivity.
Series B onwards is Institution Building. Repeating a process at scale.
For publicly traded businesses that are usually 9-10 years in. You need a policeman with tight micromanagement & who can thrive in an environment of crazy amount of politics. In a bad company, executives spend 50% of time playing politics. In very good ones, executives only spend 25% of time playing politics.
When you apply this lens to your own career or other peoples career it starts to make so much more sense. I also think that this is a useful lens for hiring. It helps you identify exactly what you are looking for and whether this person is a cultural fit stage wise.
One of the biggest mistakes i’ve seen startups who have recently raised a series A or Series B or C round, is they hire an executive directly from Google, Oracle or Salesforce without considering whether they fit the phase/stage of their company. Google, Oracle & Salesforce are very established companies and while the executive might be highly effective at a big company, they may not be able to adjust to the still grungy infantry phase. You want someone who has gone through this phase before.
Thankfully this is something that is becoming much better understood in high growth companies in Silicon Valley.
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