There are several different models and concepts available for structuring your product teams. Instead of spending speaks studying to find out, ask yourself the following questions: What does your business currently need? What is the main challenge that your product team is facing at the moment? These questions might help you to identify where the focus should lie. In this article, I’ll show you . how structuring your team depends on the current stage of your business Let us start by defining the stages of a company’s growth that exist, and afterward move to their differences and defining characteristics. And now — spoiler alert — be ready for some bits of theory. This serves as background information to better understand the approach I suggest in the second half of this article. A Little Bit of Theory Greiner’s Model In the 1970s Larry Greiner, at that time a professor at Harvard Business School singled out six phases of the company’s growth: Phase 1: growth through creativity Here, the growth happens within a small team with informal internal communications. The team is mainly busy with the product-market fit. All decisions at this stage are taken by the founders. Phase 2: growth through direction The company keeps growing. New processes emerge. Founders hire new managers and they take the main decisions together. Phase 3: growth through delegation At this phase layers of hierarchy and new functions are added. Top management is less-involved in day-to-day operations and focuses more on long-term strategy. New managers are stepping in. Phase 4: growth through coordination The company becomes well-established within its industry. New policies and procedures are introduced to bring consistency to the company’s organizational scope. Phase 5: growth through collaboration The formal controls and bureaucracy that emerged in previous phases are replaced with a culture of trust and teamwork. Phase 6: growth through alliances Further growth happens through actions like partnerships, mergers, and acquisitions. During this phase existing processes are scaled to a certain degree, hence different parts of the company can end up at different development stages. Adizes’s Model Later Dr. Ichak Kalderon Adizes, one of the most influential management thinkers, came up with a more elaborate model. In his book “Managing Corporate Lifecycles” he distinguished ten stages each company goes through, from its infancy to death. I am only going to look at the first half of Adizes’ lifecycle as we are primarily interested in growth. Stage 1: Courtship All that is given at this stage is the would-be founder and his/her grandiose idea. Enthusiasm runs high, though there is no product, no company, and no team yet. To get to the next stage a founder needs to take risks and show commitment to his/her idea. Stage 2: Infancy Here, the founder gets a small team and shifts his focus from the idea to the tangible result. The idea’s viability is under the spotlight. There is no long-term strategy or structure yet, and no attention to the paperwork either. Decisions are mainly taken by the founder. Everyone works hard and tries to keep the business afloat. The cash flow is negative but there is a demand for the product. To get to the next stage the team should secure strong sales. Stage 3: Go-Go Though both the team and sales are growing, there is no profit. The company still lacks processes and hierarchy. The driving force stays with people who can react quickly to changing externals. The founder tries to chase any opportunity, this can negatively affect the product’s quality and overall effectiveness. Getting to the next stage is accompanied by the crisis that directly leads to the reorganization. Stage 4: Adolescence This controversial stage is marked by changes and conflicts. The company starts reaching profitability, whereas the sales growth is decreasing. Instead of following the “the more, the better” approach a company should focus more on its product’s quality and overall effectiveness. Professional managers join the company. The structure and certain rules are added. Although these rules are not always followed. At the moment, when the company finds its optimal balance between self-control and agility, the transition to a new stage takes place. Stage 5: Prime At this stage, everything comes together. There is finally a place for structure, clear vision, and values. Goals are clear, as well as resulting priorities and focus areas. Everyone follows a certain set of rules, sometimes even unwritten ones. Both profit and turnover are steadily growing. Decision-making is transparent. The company’s goal is to stay at this stage as long as possible whilst smoothly adjusting its internal rules depending on externals. Stage 6: Stability A healthy dose of stability and predictability dominates this stage. The biggest risk is to fall behind the market’s pace and get outdated. The company might be reluctant to invest in innovations. There is a comforting illusion that everything is under control. A slowdown occurs. After that follow stages of the company’s death that we would not consider. What is remarkable though when it comes to the Adizes’ lifecycle is a constant drive. One stage results from another one. To stay afloat for a longer time and to succeed, a company needs to be in constant change during its prime. This somehow resonates with agile methodologies that later emerged in the Tech industry. Venture Market Model Now let us consider things from the perspective of a venture market. Idea Everything starts with a founder’s vision, in his/her mind. At this stage, there is nothing else, only an idea. Pre-seed A founder gathers a small team - mainly consisting of analysts - and outlines the business plan. Next, a prototype is prepared to better demonstrate the idea to potential investors. The main goal is to secure the financing to further develop the sample product (read it as MVP, MLP, or any other concept that is closer to you). Seed A seed round that is also known as going from 0 to 1 as per Thiel ( ). The main goal is to find the product-market fit or in other words to convince the public of the product’s viability and secure first orders/payment transactions. The team is actively growing, there are people joining who have all the necessary skills to perform the first launch. There is not enough time for planning, and all decisions are taken immediately and in situ, by a close group of people. The idea is not to create the ideal product, but rather to test a hypothesis ASAP. At this stage, a team can pivot a business model several times - most importantly, do it quickly. Peter Thiel, an entrepreneur, and investor who co-founded PayPal Death valley curve A project is launched, and first sales have been recorded, though no sufficient revenue has been generated. The team can’t grow further as it does not have enough resources. The main goal here is to prove the viability of the business model. This is the most dangerous phase of new ventures, so many projects die at this point. Sometimes the company needs to roll one step back and make a new pivot. Launch A phase where you go from 1 to 10: your business model is working and investments are obtained. The company mainly focuses on product promotion. At this point, sales are essential. The company does not shift its focus toward the long-term strategy yet. As the team expands, bits of structure and business operations emerge. Scale A phase where you go from 10 to n: your business is growing rapidly. At this stage, we deal with the working business model. The company already has some users that speak for the product’s demand. The main goal is to look for breakeven results. The company obtains more managers. The organizational structure gets more clear and we can see a fully-fledged development strategy. Maturity Here, we see a mature business that offers us several growth scenarios: , a phase where a company does not pursue a goal of earning more money, rather it focuses on further developing the product and holding the market. Stability , a phase where a company is interested in further growth and hence is busy looking for new markets. Expansion , a phase where a company (or rather founders and investors) is interested in growing profits and hence starts with IPO or sells its assets to a bigger player. Exit/IPO All Together Now As you can notice all those growth models share some similarities by complementing and developing each other. Let us now summarize: Why did we do all that? Firstly, to embrace the scope and variety of business goals. Secondly, to see how those vary depending on a particular stage of business development. Now let us move to the main bit. Structuring Product Team What happens with the product and product team at every stage mentioned above? To be on the same page let me first define what a product team is. In my opinion, a product team is rather a function. It takes market demand as input and later comes up with a solution that can meet this demand. Two things are important to keep in mind. The conversation is about market demand only; when it comes to figuring out the target audience and its needs, this is already what a product team faces as a task; The solution offered can also not work out, it is only to meet the market’s demand. For 100% user satisfaction a company can actually dedicate years to research and product improvement. intended I further consider all things from the perspective of a venture market as for the majority it is more common. Moreover, I’ve summarized all the models and it should be easy for you to switch from one to another. Idea and pre-seed At this stage everything is relatively easy: there is no actual product or team. Now imagine the following: you join a project that has a raw idea - no clear financial mechanism or a first business plan draft - but it already has a product team (even if it only has one person). I have to warn you, you might waste your time testing some random off-base theories. In my vision, one dynamic analyst as a product team at this stage should suffice. He/she can help out the founder to fully shape his/her idea. Seed At the point when the idea is shaped and financing is obtained, a company transfers to a seed stage. It is now that a full product team enters the stage. When I refer to “full” I do not necessarily mean the number of actual specialists, but rather all competencies you might need to release the product. Saying that, it is still possible to work with one person only, who is just wearing several hats. If you have such a handyman around, lucky you! What do Greiner, Adizes, and the venture market have in common? Right, they all agree that at this stage creativity, speed, and flexibility are crucial. The main goal is to get a result, i.e. to prove the viability of the business model and to find a product-market fit. The visibility of the founder at the seed stage is still fairly immense, so if he/she possesses the necessary skills, he/she can also perform the role of a product manager. If it is not an option, then hiring the first and only one product manager won’t hurt. It is fine though if at this stage the team does not have: Structure and areas of responsibility Sprints and planning cycles Documentation Long-term goals and strategy Do not be bothered with it in any way. If you come up with a cool solution that you can release tonight, go for it. Do not put it off. You might face two risks though. One is putting way too much focus on crafting a “perfect product” instead of satisfying the actual needs of your users and increasing sales. The second is jumping to new projects without properly finishing the current ones. Always get back to essential questions like “which problem or need does your product solve?” and “how to understand the product actually solves it” Anything that does not provide an answer to those questions - ignore it. The same goes for your staff, if they do not give you the right answers, simply do not hire them. Death valley curve For me, this stage is about getting from 0 to 1. From the product-team perspective, there are no big changes here. Try also not to do extra hires if possible. Instead, stick to that energetic all-rounder who can help you to move fast towards the working business model. Launch As soon as you get the first sales and financing for further development, your product team starts growing fast. Oh well, because as it turns out many things were supposed to be done already yesterday, not today. But we remember that at this stage the main goal is still to get more sales by any price. Speed is key. The work is still built up around those several energetic guys who wear several hats. The question is how to enable fast and effective growth at this stage. One of the most common solutions is to focus on specific functions that you need to scale up. It is good timing to start with the first organizational structure and it can be function-based. It is fairly convenient as it is simple, clear, and can be easily transformed into other organizational structures. At this stage, it is essential to lay a strong foundation. As the team grows, you might need to lay out the first processes. If two guys could easily come to an agreement, ten people might start a ruleless discussion. In my opinion, when you need to organize the processes, try to focus on the current pains your team is facing. If we consider that you also should stay fast on top of it, the good solution here would be running some regular retrospectives. Do not try to build an ideal process in some sort of a vacuum, instead learn to adapt to current developments in an agile manner. There will be situations where one project would require a release cycle asap and another one - documentation or the right working tools. But I can assure you there won’t be a situation where one project needs all the things mentioned at once. Hence, always listen to your team and look for things that might help you to move faster and more effectively. What is still missing at this stage: A complex team hierarchy (In other words you still do not need a CPO, as he/she won’t help you to speed up the development of your app) Long-term planning and product strategy (Well, that did not come up as a surprise, right? After all, you still do not have a CPO, so basically there is no one to come up with this strategy. Jokes aside, you should just focus on short-term planning.) The main threat at this stage is a so-called seeming success. After the first batch of sales, you might get over-excited and just jump on any other exciting idea/opportunity. This leads directly to the shift of focus. Hence, at this stage, it is essential to keep track of key product metrics that must go way up. And to all initiatives that do not support the growth of the current product, just say a harsh “no”. Scale Your product has started to bring in some profit. You actively look for breakeven results. Hence, you entered the stage of adolescence or went from 10 to n. According to Adizes, this stage is the most controversial one, full of conflicts. The team gets so big that there is a place for professional management, several formal rules, and first experiments with the organizational structure. One of the signs you transferred to a new stage (this is to be seen within the product team, too) is a big amount of inefficient meetings. Hence, it is time to rethink the structure of your product team and probably try out cross-functional teams. The way this transit might look is strongly dependent on the current state of the team, its size, and the number of goals/priorities that it faces. Let us start with goals and priorities that can define the logic behind cross-functional teams. My favorite approach is mainly based on the goals that a product team might have. If we group them into logical clusters and project them onto the structure, the following scenarios are possible: Core (base product case), growth (growth algorithms), new (possible ways of business expansion) Acquisition (interaction with new users), retention (keeping existing users), monetization (generating revenue from users) Breakdown by customer journey funnel Breakdown by main user scenarios The main point here is that the work should be done on all fronts at any time. If let us say nothing is done in developing new ways to expand the business, but new clients are acquired, we risk missing some important opportunities. After we define the suitable format, we need to see whether we have enough human resources to build up those cross-functional teams. If not, can we hire missing people? If we have enough teammates on our own, we start experimenting with the structure. We build the teams and, via retrospectives, connect all the dots. Most probably, we would still miss some people. In this case, we would look for transit formats such as temporary cross-functional teams, resource sharing, and other trade-offs. These solutions might be ambiguous but they can provide us with the right direction. Once we have all people on board, we can finish the initiated transformation. Whilst expanding, I suggest you keep an eye on successful product managers. These are key people in your team who can define the further success of this whole transition. What happens with processes inside the team? If the optimization process is ongoing, most probably at this stage you would have some established procedures that you constantly improve. If not, please do not procrastinate. Start with regular retrospectives sessions. This helps to identify key pain points and improve working processes. Maturity So, you made it. Your company is steadily growing, it has a clear vision, coherent strategy, agreed goals, and transparent structure. You are not a start-up anymore, but rather a full-time business. What happens now with the product team? Foremost, you need to hire a CPO (if you still do not have one). Your main goal is to find a balance between easy targets and long-term projects, between improvements of the current product and search for new growth opportunities. You need a proper product strategy that unites all parts of the product team and dictates clear goals to everyone. Most probably, your product team is now integrated into the entire business structure. It also might have a clear sub-division with established processes. At this stage, it is finally time to look for the best cases demonstrating the organization of product teams such as Less, Nexus, etc., and work out the solution corresponding to your current needs. To Sum It Up As a wrap-up let us put down all this in a table. Whilst crafting your product, you might constantly face new challenges and stumble upon imperfections in your own work. Thinking in a given context I really like what Adizes once said: “You are as big as the problems you can handle”. It is important to perceive your company and its size adequately and solve the problems the way they come, without moving forward before closing the previous chapter.
