What Kind of Company Are You?

I heard this brilliant gem through the grapevine and wanted to share it with you. (HT to Mike at First for passing it along)

When you’re building a technology company, you are driven by one of three things: Sales, Product, or Technology.

Which Are You?

In a sales-driven company, your sales team (which could be just you) figures out what the market wants and then you build it. The technology you build is in service of enabling the sales team to sell more stuff. This is what Bandwidth.com was in the early days, though they are certainly less-so these days with products like Republic Wireless. In a sales company, you’re out asking what the people you want to sell to need and then building it.

In a product-driven company, you build your product first and then ask people to come and buy it. You have a clear vision for what the market needs, and you set out to provide it. Many product companies are also self-serve, or at the very least have a high level of automated sales, but it’s not required. You might end up being wrong, and changing course, but you’re driven by building great products. Apple is a product company.

Lastly, in a technology-driven company, you build technology because it’s interesting / solves a really big technical challenge. You then figure out (or leave it to your users to figure out) what kinds of products should be built with it. Google is a great example of a technology-driven company. They built the world’s best (or at least most successful) search engine, and THEN figured out what products would work on top of it. Almost all leading or bleeding edge work is done in technology-driven companies because they can secure the funding to solve the problem first, rather than make money.

Why Does This Matter?

What kind of company you are directly informs how much technology you build and when.

If you’re a technology or product company, you build much more tech up front. You’re making larger bets on your ability to understand what the market may need. Your technology team is generally much more involved in the decision making process, and product ownership is a joint effort.

In a sales-driven company, the technology team largely delegates the process of understanding the market to whoever is selling, and builds what is required. Product ownership is also largely controlled by whoever is selling.

Of course, none of these rules are hard and fast. Many times you’ll have a blend based on your personnel. Generally, however, if you’ve got a great sales person as a CEO, you’re going to be a sales-driven company because that’s what they do best; if the CEO is a product person, you’ll be a product company; and if the CEO is great technologist, you’ll be a technology-first company.

How Does This Affect Team Makeup?

Understanding from the beginning what kind of company you are informs what kind of people make up those key early positions, and also can eliminate a good bit of future conflict.

If you hire a brilliant engineer who thinks they’re coming to a technology-driven company, but instead you’re more of a sales-driven company, they’re going get very frustrated very quickly. They will want to build the best possible technology, when what you really need is technology that’s good enough to serve the customer.

As well, if you hire a great product manager but they don’t get to own the roadmap, inevitably they will leave.

Just Remember

  • Understanding what drives your company helps you understand how to best make decisions about what to build when
  • How you build your team will be greatly affected by the kind of company you’re running
  • Not articulating this single issue is an early source of conflict, and should be resolved clearly as quickly as possible

Your Assignment

Sit down with your founding team and talk through what kind of company you’ve been up to now, and what kind of company you want to be. How does it affect the road ahead? How does it affect your critical next hires? How does it affect the current team?

Write down your findings.

“We are a _______________-driven company.”
“Our product decisions will be owned by _____________.”

If you need help working through the process, or have further questions, hit me up.