I like to think of tech companies as being in one of four phases:

  1. Level 1 NPC
  2. Pre-puberty startup
  3. Super rocket 3000
  4. Floating dinosaur
  5. Off-the-grid

A company can be financially in one of these but act like another category. (people saying Apple is running like a startup methodology and team-structure wise.) Or they can be in-between.

The reason I've split it into a couple of categories is not for easier classification, but because I've noticed common pattern between the number of users, the company's goals and available capital.


Level 1 NPC

Bedroom ideas. A couple of friends around the table hooked on computers. The first half of The Social Network.

Mission: Find someone to pay us for this thing.

Plus:

  • Speedy development. Basically no stakeholders involved.
  • Low risk. No customers to piss off.
  • Ninja mode. Other companies don't see you as a threat.

Con:

  • Lack of product-market fit or scalable business model.
  • Can't hire talent for $$$.
  • Moving fast is dependant on how big the scope of work is.

Pre-puberty startup

The market welcomes the product. Usually post Series A and scaling on a budget.

Mission: Figure out how to pack this thing that people pay us and scale it within a budget.

Plus:

  • Some money to hire people.
  • Still fast, but a meeting here and there.
  • Some sort of idea of the pitch formula that works for clients.
  • Gets some press and maybe some inbound leads.

Con:

  • Has customers they can piss off, and they matter a lot.
  • A lot more pressure on developers, for usually less the money than a big company.
  • Has investors now and a burn rate.
  • Can't buy anyone yet but does show up on other companies' radar.
  • Not enough street cred yet to push back on a lot of sassy clients.

Super rocket 3000

What happens when you get past the peak of the slope. Everything becomes bigger and faster. Usually companies post round B or C of funding.

Mission: Scale. Fast. Now. People pay for this and we made some money now let's pump some money into everything and try and gain monopoly.

Pro:

  • A lot more press, a lot more sales.
  • Can buy people out.
  • Have a proven business model and product market fit and therefore can be bought out by the floating dinosaurs.
  • More money to convince smart people to work for them.
  • Usually customers have some sort of buy-in into the company, emotionally. Feeling like you're joining a movement "against the establishment".

Con:

  • Slower speeds. Stuff usually needs approval now.
  • Beeping like crazy on the radar.
  • Usually super fast burn rate.
  • Because things need to scale at a fast rate, usually available attention per customer gets lower.
  • Some sort of identity and positioning to maintain. Although not as much as a Floating Dinosaur, it might be more critical as people are still finding out about your company.

Floating dinosaur

Big companies with a bunch of buildings around all the globe. P&G.

Mission: Stay relevant. Maintain monopoly. Please shareholders.

Pro:

  • Can buy people left and right.
  • Big customer base that they can put new, risky product offerings in front of.
  • A bunch of disposable income that can be used to start an R&D department.

Con:

  • Sloooooooooowwww
  • Have an identity to maintain. "A legacy"
  • Could see risky things as not worthy of being pursued, depending on leadership. "But why can't we do what we usually do?"

Off-the-grid

Probably the most exciting category for myself.

Mission: Scale & stay small as long as possible. Avoid being eaten by a big company.

Solo developers that created a product, usually for a niche audience and actively go against scaling, choosing to be profitable by reduced expenses. Frugal companies, usually optimised for some sort of health-life balance. Founders that really hate meetings.

Pro:

  • Super low burn rate and therefore can easily reach a positive cash flow stage.
  • Super fast to pivot around.
  • Feels more personal as a company and people can buy into it emotionally.
  • Shit hot CV for the founder.
  • Can be super personal with the audience and crowd source ideas and address feedback immediately.

Con:

  • Development capacity dependant usually on the solo founder.
  • Can create an echo chamber unless the founder/s actively seek other opinions.
  • Unless product spreads through word-of-mouth, founder/s is/are split between sales, development, customer support, marketing.
  • Unless product is sticky* (aka people are invested somehow into it) then big companies could spin it up quite fast if you manage to fly on their radar.

I've noticed sometimes the same patterns that happen in life happen among companies.

Little companies dream, like kids, of the crazy independence the big ones are enjoying. Likewise, the big ones long for the days when they had no one to please.

At my day job, it helps to see where does the company fits within this, zoom out a little bit ask myself: thanks to our size / capacity etc, what can we do now that we won't be able to do once we reach the next phase?