Startups, Technology Companies & Giambattista Vico
I had one of those “delightful” newspaper moments today. I was going through my Sunday morning ritual, page-by-page through the Sunday New York Times, when I happened upon an interesting editorial in the Week in Review.
The article itself was interesting, but likely one I would have ignored in the online version. (It’s still one of the virtues of print that I put myself in the hands of the editor, and read the Week in Review from beginning to end.) What was delightful about it was its philosophical reference to Giambattista Vico.
You see, until today, I had no idea who Giambattista Vico was. However, it turns out that this 18th century Italian philosopher published a theory of societies that happens to match, almost exactly, my recent theory about start-up technology companies and their development into large, successful enterprises. Here is a summary from the Stanford Philosophy website:
Nations need not develop at the same pace-less developed ones can and do coexist with those in a more advanced phase-but they all pass through the same distinct stages (cursi): the ages of gods, heroes, and men. Nations “develop in conformity to this division,” Vico says, “by a constant and uninterrupted order of causes and effects present in every nation” (“The Course the Nations Run,” §915, p.335). Each stage, and thus the history of any nation, is characterized by the manifestation of natural law peculiar to it, and the distinct languages (signs, metaphors, and words), governments (divine, aristocratic commonwealths, and popular commonwealths and monarchies), as well as systems of jurisprudence (mystic theology, heroic jurisprudence, and the natural equity of free commonwealths) that define them.
In other words, Vico outlines three distinct phases for societies:
- An age of gods, when man and immortal walk amongst each other
- An age of heroes, when the gods have departed, but their children or disciples perform wonders with their power
- An age of men, when their is equality and democracy among men, and a lack of the supernatural
(Yes, I’m grotesquely paraphrasing. Bear with me on this one for a moment).
When I left eBay in 2007 to join LinkedIn, many people asked me why I was interested in joining a startup at that time. Being an avid fan of Greek Mythology, I told friends that there were three phases to the tech company lifecycle in Silicon Valley:
- The golden age, when gods (aka founders and first employees) walk the floors. This is a time of incredible vision, passion, and risk. The events and people of this era become myth and legend rapidly. The company typically at this time has a product/concept, but no proven business model or engagement with customers. The company is usually measured in tens of employees.
- The bronze age, when the gods give way to the heroes, the first wave of executives who help grow and scale the company and fulfill its destiny. Usually this is a time when the business model has proven out, and the larger risk to the company is its ability to manage growth and scale the organization in both talent and execution. This is still a time of passionate debate and eccentricity, but now at a larger scale as the organization and business broadens. This is when the company goes from tens of employees to thousands.
- The iron age, when the gods and heroes have fled, and the company is managed as a large, public technology company. At this point, the company is typically measured in tens of thousands.
Amazing similarity… no doubt both Vico & I were both fans of the classics.
When I joined eBay in 2003, it turns out that I joined the company well into its bronze age. Many of the early employees (and a founder) had left, but most of the original heroes who worked under them and with them remained. There was no separate corporate entity, and the PayPal acquisition had just happened. In 2003, a product manager would still present a product strategy directly to Meg at times. But by the time 2007 rolled around, as many of the heroes departed, it was clear that eBay had entered its iron age.
Obviously, there are later phases for technology companies that can be interesting. (Believe me, as someone who joined Apple in the mid-1990s.) And there are always outliers (Google has stayed in its bronze age longer than most.) But these phases do a fair job of describing the cultural dynamics of those first few phases of a technology company.
For companies, there are no clear delineations between the ages. The transitions tend to be gradual, and as often as not tend to reflect the four-year pattern for stock option vesting schedules. In the last few years, however, I’ve found this framework fairly effective in describing how company cultures evolve, and how that influences the enjoyment and job satisfaction of employees who prefer one phase over another.
Maybe the reason this analogy has been useful for me personally is because, as Vico supposed, it reflects a more general description of how groups of people evolve socially when they dedicate themselves to a single social contract. For Vico, that was a nation. For Silicon Valley, it’s a start-up. It’s interesting to consider that the venture capital financing model and stock option vesting model tends to encourage this type of phasing almost naturally over the growth of a new technology venture.
Something to think about, of course.