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8 stages in the life of a technology company

Or, how products and companies mature and die.

If you have watched the cult sci-fi movie ‘Man from Earth’, chances are, you would have been sensitized some of the problems of living forever. Fortunately for us, we do not have to worry about that. All of us come with a definite expiry date.

However, we cannot predict the exact time when we will meet our demise. What we can predict though, is the various levels of maturity that we pass through in the process of living our lives. And this has been very succinctly illustrated by Erik Erikson.

Erik Erikson’s Theory of Psychosocial Development points out the outward behavior that predict our development and maturity. He presents them as eight stages of psychosocial conflicts -often known as Erikson’s stages of psychosocial development – that all individuals must overcome or resolve successfully in order to adjust well to the environment.

Wait, wait, wait.

Do I write about psychology, sociology or user experience? What does Erikson have to do with Software User Experience? For that matter, what did Abraham Maslow know about software user experience? Am I just veering off topic on this blog?

Actually these socio-psychological theories that were developed for understanding human behavior and motivation, works equally well when analyzing software products and companies as well. And no, you do not need to anthropomorphize your software products in order to do this – which by the way has a number of shortcomings, as Calvin points out.

So, what are Erikson’s eight stages?

These are the eight stages:

  1. Trust vs Mistrust
  2. Autonomy vs Doubt
  3. Initiative vs Guilt
  4. Industry vs Inferiority
  5. Identity vs Role Confusion
  6. Intimacy vs Isolation
  7. Generativity vs Stagnation
  8. Ego Integrity vs Despair

While there are specific ages that Erikson observes for these life stages, it could be very well possible that some people hit the expected level of maturity later than the expected dates. And some people do not reach a particular stage of maturity.

How is this relevant for software products?

While going through the description of the life stages, I came to see a correlation with the levels of maturity within companies that I have worked with. So this is the hypothesis I have – Every software company or product goes through these stages and knowing what they are and how to deal with the conflicts can help software companies overcome issues –

Examining the eight stages in detail

I will go through each of the eight stages in detail and walk you through an example of a company I’m fairly familiar with. Google.

Stage 1 – Trust vs Mistrust: In humans, the first stage of the Erikson stages starts from infant to about 18 months. At this stage, infants must learn how to trust others, particularly those who care for their basic needs. They should feel that they are being cared for and that all their needs are met.

In terms of companies, early startup stages are a time that correlates to this stage of development. This is a point when companies need to be cared for. They need to find good incubators.

In Google’s case, this was their time in Stanford, when the project (the called ‘BackRub’) matured into an actual product. But it would not have happened without the nurturing presence of Terry Winograd who encourage Larry and Sergey to keep working on the project. (In fact, Terry Winograd is also directly responsible for making me choose User Experience as a career path. More on that later.)

In the early stages of a company or product it is important to find a mentor or patron that believes in you. Going about it on your own and hacking it a possibility that can work in rare cases, but you still need to find the people who really believe in you. This is what takes a company or a product from a state of mistrust to trust. Which is crucial.

Stage 2 – Autonomy vs Doubt: At stage two of the Erikson stages, children are taught the basic ways of taking care of themselves, including changing their clothes and feeding themselves. If a child can’t take care of his own basic needs and continue to rely on others to take care of him, he may feel shameful when he sees that other kids of his own age are able to perform tasks such as feeding themselves.

Most startups today falter at this step. They are unable to progress beyond the level of autonomy because they get addicted to inorganic growth. While they seem they are growing, this is a false sense of autonomy. Any shake up in the market or economy would lead them to come crashing down. One does not have to look as far back as WebVan or Boo.com to see this happen. Juicero and Quixey are examples where despite aggressive funding, the companies were unable to sustain themselves.

Google was frugal and started off in Susan Wojcicki’s garage. But Larry and Sergey were still attended Stanford as they were hedging for their PhDs. They were like toddlers, walking with support, falling and getting up. Fast. At this point CraigSilverstein, and an office help were their first hires (Susan did not join till later). Google knew they had a great product in the works, but luckily, they did not a lot of VC money. They did raise $25M before their IPO, but as soon as the funding rounds were over, they were already generating revenue. They were autonomous within 2 years of setting up.

Stage 3 – Initiative vs Guilt: As children continue to grow up, they like to explore and do things on their own. At stage three of the Erikson stages, children can learn new concepts introduced in school and are expected to practice these lessons in real life. They know that they can accomplish these tasks on their own, but if they fail to do so and end up asking for assistance from others, they may feel a sense of guilt.

Google on the other hand did brilliantly at this stage. They were still frugal on the outside but spent on hiring superstars like Amit Singhal, Urs Hölzle and JeffDean. The founders knew they were not coders and hence having people like Jeff and others was a crucial step in making sure. The actual maturity of the stage was in the acquisition of Applied Semantics which brought AdSense into Google.Despite having a competing technology, being open to acquiring the company shows that the company was not wary at looking outside for help to grow. This is a display of self-confidence.

Stage 4 – Industry vs Inferiority: Children also become more competitive during this Erikson stage of development. They want to do things that other children of the same age can do. When they make the effort to perform a task and succeed, they develop self-confidence. However, if they fail, they tend to feel that they are inferior to others.

Google too looked around and saw all the things others were doing and realized how they could do it as well, if not better. During this time, they released a slew of products from Maps to Calendar. I joined Google at possible the end of this phase of the company. Working on Google Finance, I could see how despite having a product that was superior is some ways, we always felt inferior to Yahoo which had the more mature product in the space. This led to a lot of comparisons which were not needed at that stage. We should have just realized the life stage we were in and known that maturity was just a few steps away.

Interestingly,Google went IPO during this stage of the company. IPOs do not show the company maturity but is just a reaction to market conditions. Going IPO is like getting an inheritance. There is no right age when it is best to happen, you just need to have good people who can manage it. Luckily Google, unlike some others, managed its public status pretty well.

Stage 5 – Identity vs Role Confusion: This is a crucial stage of development where adolescent children gain their identity through the discovery of oneself and in the course of finding meaning to their personhood. They may also experience identity crisis as a result of the transition from childhood to adulthood.

At Google this was a period when the company was losing its aura as a young startup and people started to look at it as the next ‘Big Brother’. The ‘don’t be evil’ motto was seen as a reminiscent of a naïve period of . However, on the face of it Google was sticking to it. There were some personal information about Eric Schmidt in Google indices, which they refused to remove despite a personal request from Eric.This shows an organization that was mature beyond its years. And at the same time, the apparent growth within the company was accompanied by chaos. For example Larry and Sergey dissolved a group of assistants who were serving as the interface between the founders and the rest of the company. However this meant that the founders were even harder to reach.

In someways both these example could point to the Montessori education that both Larry and Sergey had obtained early on. They gave them confidence but at the same time scaling was not without pains.

Stage 6 – Intimacy vs Isolation: Young adults are most vulnerable to feel intimacy and loneliness because they interact with a lot of people in this phase of their lives. It’s not always a success story for every young adult to find someone with whom they can share a lifelong commitment. Some may choose to spend the rest of their lives as singles.

Google, at this point, could see that despite having made headways into search, they were not hitting the right notes on the mobile front. There were a number of ‘bad dates’ so to speak. And this was finally solved when Google acquired Android. To me, this is what made Google what it is today. Till Android (and to a small extentYouTube) Google did not know how to play the social game.

Despite not being a network in the real sense, it was the acquisition of Android that completed Google.

Stage 7 – Generativity vs Stagnations: Adults who are in their 40s and 50s tend to find meaning in their work. They feel like at this point in their lives, they should be able to contribute something meaningful to the society and leave a legacy. If they fail to achieve this, they feel like they have been an unproductive member of the society.

I think Google was way ahead of everybody as far as Generativity is concerned. They had the great APM programs and a number of technical contributions including that of MapReduce and BigTable which set the stage for the cloud platforms of today.Ghemawat andDean’s paper started it all.

Stage 8 –Ego Integrity vs Despair: At the last stage of the Erikson stages, people are in their 60s or older who are typically retirees. It is important for them to feel a sense of fulfilment knowing that they have done something significant during their younger years. When they look back in their life, they feel content, as they believe that they have lived their life to the fullest. If they feel that they haven’t done much during their life, it’s likely that they will experience a sense of despair.

I don’t think Google went through this phase. However according to me they are past this phase. Which is why I have a new stage that is not described by Erikson.

The new stage – Rebirth: Maslow class this stage transcendence and very few people or companies achieve this. I think Google has. By successfully transitioning on to become Alphabet, it has taken on the next stage. At this point, though they should learn for people who have been here before. The only company that comes to mind is Apple. They were more successful in their rebirth than in their earlier incarnation. Maybe Google too can replicate that.

So where does that leave us?

You could look at these correlations from a number of view points. As an entrepreneur you may be interested in knowing what stage your own company is. Maybe as product leaders you could apply the same life stages to your products. It would work just as well. And as employees you could look at the state your company is in and then chart the course of your career. Any way you look at it, this is an important tool to have in your arsenal.

Comments

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    November 14, 2018 at 7:30 am

    […] 8 stages in the life of a technology company […]

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