e-Maturity

Four years ago, Greg started as a software engineer for a scrappy, pre-IPO Internet start-up called CNET. His first day on the job, no one was quite sure who he was or where he would sit. He found a corner to call his own, and after a few days he was given his own computer.

However, over the next couple of years he would work at a “desk” consisting of a door propped up on metal legs. And he was one of the lucky ones. Some employees once had to double up at their doors due to office space constraints, while others endured an entire month without a door of their own.

Last week, after a two-year detour through CNET’s Snap spin-off and its subsequent merger into the NBC Internet fold, Greg returned to CNET but this time as a vice president. This experience provided some interesting contrasts and comparisons between the pre-IPO, “burning-through-cash” start-up and the post-IPO, (sometimes) profitable Internet corporation.

For e-business start-ups, his before-and-after observations reflect what many should expect if they are to succeed and mature.

You Haven’t Changed a Bit

When you live with the same person every day, he or she is much less likely to notice your few extra pounds and gray hairs than someone you haven’t seen in a couple of years. So many of his former co-workers were curious to know what struck him as different.

On his first morning back, not only did he have an office and a computer, he also attended a two-hour employee orientation program. But before you jump to conclusions, it’s worth pointing out that he didn’t have a phone for his first four days, he works at two doors propped up on metal legs (the perks of senior management), and he spent part of his first week planning seating arrangements for his department around a tight office space crunch.

Some things never change.

Still, there were many more differences than similarities. One of the most noticeable changes was the level of maturity in company management. As e-businesses grow and develop, more experienced management is lured from the bricks-and-mortar world by the dot-com brain drain.

As a result, organizations develop more structure and become more stable. For example, human resources departments establish more extensive programs for employee advancement and retention. Standardization of work processes and intra-office communication increases (though not always resulting in greater efficiency). Companies implement more sophisticated financial controls and analysis including such radical concepts as budgeting and, dare we suggest, profits.

Compared to the bare-bones, seat-of-your-pants style of start-ups, mature e-businesses advance through something akin to Dr. Abraham Maslow’s hierarchy of human needs. No longer solely obsessed with whatever it takes to get the next product or service out the door in order to establish themselves, they’re more likely to take on higher-order issues such as employee development and community outreach.

You Look… “Different”

But maturity and growth are mixed blessings, and not all the changes are positive ones. As companies grow, communication becomes more difficult. Decision making often involves more people, more politics, and more bureaucracy.

Achieving something that is finally theirs to lose (thousands of their shareholders aside), established e-businesses frequently show a greater aversion to risk taking. A “not invented here” mentality can take hold, and a business may seek growth by outsourcing the risk of new development choosing to merge with or acquire innovative companies instead of being innovative itself.

(For all the Department of Justice anti-trust hoopla over its “right to innovate,” most of Microsoft’s notable new products and innovations over the past several years have been the direct result of acquisitions.)

The effect on employees can include a diminished sense of personal impact and responsibility and a feeling that it requires more effort to get less done. Some employees including CEOs are perpetual builders and don’t have the stomach, nor the interest, in running a profitable operation. It’s therefore no surprise that, golden handcuffs of stock options or not, e-businesses frequently suffer attrition to start-ups as they grow and mature.

Meet the New Boss Same as the Old Boss

Despite this, many of those who have remained at CNET claim that it’s a better company to work for now than it was years ago, citing that it has a better idea of what it’s doing and has learned a lot about how to be successful.

With executives and senior managers who have survived just about every management pitfall and fad, there comes a definite assurance and opportunities to learn by example. Contrast this with the green, 26-year-old CEO who establishes a business culture that learns exclusively from experience. The School of Hard Knocks charges a mean tuition.

Of course, this says nothing about the opinions of those no longer with the company. For many of them, there will always be the allure of start-up riches and dreams.

But for successful e-businesses, this evolution is arguably inevitable as no company can stay a start-up for long. Certainly, no company can survive by burning out its best employees with 90-hour work weeks and no life outside of work. No company can experience tremendous growth and not face the realities of profitability, risk management, employee retention, and changing communication needs.

Whether you’re Jeff Bezos or William Randolph Hearst, in the end everything is “new media” at some point. The Internet economy’s greatest validation may yet come from upstart CEOs at biotech start-ups, mocking all the dot-com starched shirts the way they mocked the bricks-and-mortars years before.

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