Three types of tech teams in emerging businesses and how they impact scaling

Key takeaways:
  • We typically see three types of technology teams in growing businesses, and all three impact scaling in different ways
  • The most common types of tech teams at scaling businesses are ‘developer-led’,’ product-led’, and ‘small & passionate’
  • All three can be high-performance, but management must consider the biases that are inherent with each team structure
  • The ability to adapt to changing demands, proper technology oversight and governance, and a healthy and productive culture are key to scaling technology businesses effectively
  • The most effective way to mitigate the risks posed by different types of tech teams is strong, experienced and compassionate leadership

Behind every business’ success story is the ability to scale its delivery capacity to meet increase in demand for its products and services. Yet growth is never easy, and the challenges that come with it can look very different depending on the type of technology team within the business.

Experience, personalities, motivation, and maturity are just some of the areas where teams differ, and where particular characteristics can help or hinder scaling. It’s often difficult to achieve the right balance of roles within a team as a business focuses on establishing itself in the market.

Over the hundreds of due diligence assessments that we’ve conducted, we’ve come across a wide range of different technology teams.

And while teams come in all shapes and sizes, it’s possible to detect patterns and characteristics that particular types of teams tend to have in common.

This is crucial in understanding the role leadership plays in creating the strategy needed to scale the team effectively.

Let’s have a look at the three most common types of technology teams in emerging businesses and see how their characteristics influence scaling.

Developer-led Teams

Developer-led teams consist of highly skilled technical people who are focused on leveraging cutting-edge technology to deliver their vision.  These teams are brought together by the sheer desire to create something truly innovative and differentiating.

Products built by such teams are usually big hits with the customers, as they offer something new to the market, or at least delivered in a new way.

Failure to adapt to ever-changing customer demands poses a risk

Developer-led teams often face particular obstacles when it comes to scaling. While the product might initially be brilliant, customers are always expecting something new and improved. Failure to keep up with these demands can cause a big drop in interest.

Delivery by these types of teams can prioritise stability and efficiency over new features. This runs the risk of stagnating the product over time, costing valuable customer engagement. Acquiring a customer is one thing, but long-term success requires the ability to retain them.

To keep customers satisfied, businesses must create strong customer service experiences, and ensure that the product continuously improves over its lifecycle.

Secondly, in many cases with Developer-led teams, the initial version of the product may have taken longer than expected to build as the business may have struggled to find cost-effective talent.

Developer-led teams are sometimes guilty of “gold-plating” technology, putting the focus on being technically brilliant rather than delivering an outcome that customers will love. This can (and has) kill products (and businesses).

We’ve found that you must focus on six key areas to get the best understanding of a business’ technological strengths and weaknesses. We use these key areas as the pillars of our “Digital Framework”: the cornerstone of our objective technical assessments.

Here are some common attributes that businesses with developer-led tech teams tend to share:

Strategy✅ Decisions made quickly among the development team❌ Lacking a clear vision for the long term role of technology, accompanied by a lack of strategy for expanding the team, features and customer base
Product✅ Cutting edge technology which is a hit with the customers at launch❌ Lack of product thinking leading to stagnated offering
Team✅ Highly skilled technical team
✅ High levels of buy-in
❌ Loosely defined roles and structure reliant on personal relationships that will be unsustainable at scale
Approach✅ Best in breed tooling and focus on quality❌ Limited governance in place, with connections into SLT and the board Limited interactions with customers, with requirements focused on technical enhancements rather features
Platform✅ Cloud native scalable architecture
✅ Flexible solution with strong uptime
❌ Support and maintenance processes immature
Resilience✅ Strong performance and monitoring capabilities
✅ Highly available and resilient solutions
❌ Disjointed approach to the ownership of security and risk

Product-led Teams

Businesses with Product-led teams tend to have a brilliant roadmap and a great connection with their customers.

Teams in such businesses are skilled at building feature-rich products that users love, and enjoy the benefits of user-driven growth because of this.

However, they often miss senior technical roles that provide strategic direction for how the technology and platform can sustain performance as demand grows. Eventually, technical demands exceed user needs, and the Product-led team is stuck simply trying to keep the lights on.

The lack of technical oversight causes problems down the line

While emerging businesses with Product-Led teams tend to enjoy a streak of success and growth, we see many of them hit a roadblock after a few years.

They are so focused on shipping features that customers want that they overlook the non-functional areas of the product, such as security, performance, resilience, and technical debt.

Failure to invest in these areas leads to scaling problems, and ultimately ends up impacting the thing that product-led teams care about the most: customer experience.

In a nutshell, the lack of technical oversight means early warning signs are easily dismissed, causing the product to no longer work as required. And when this happens, even the highly engaged and nurtured customer base won’t remain loyal to a dysfunctional product.

Here are some shared strengths and weaknesses between product-led teams:

Strategy✅ Strong product vision and strategy❌ Lacking technical leadership with limited long term planning or understanding of future state
Product✅ Feature rich product aligned to customer demands❌ Product may be unreliable or buggy, with new releases containing defects
❌ High levels of technical debt
Team✅ Aligned to business objectives and customer demand❌ Skills gaps, particularly around technical leadership and QA Technical team will struggle to scale with the product
Approach✅ Good idea of the impact of new features❌ A number of key areas/processes likely to be immature, including testing, quality, and technical decision making
Platform✅ Public Cloud hosting❌ Outdated technology and hosting strategy
❌ Can’t describe the architecture and technology choices in the next 2-5 years
Resilience✅ Cloud offering some flexibility and redundancy❌ Disjointed approach to the ownership of security and risk Reduced performance capacity

Small Passionate Teams

The third type of tech team that we come across often in emerging businesses consists of people who have a tight relationship.

In many cases, founding members may be friends and they’re establishing the team, technology, and processes together. The product might be good and the strong relationships within the team create an enjoyable culture with high trust and buy-in.

Culture can make or break growth

Yet as the company grows and more people join the team, the lack of documentation and the tendency to make decisions in informal conversations becomes the business’ Achilles heel.

The close working culture may not be a great fit for new starters, and as knowledge tends to be in individuals’ heads, spreading information can be challenging. Additionally, the original team members may find it hard to accept new opinions and criticism, sometimes leading to disagreements and disconnect.

Managing a larger team can also become a strain.

When a team is small and informally managed, people can simply talk to each other, but as the team grows, strong processes are essential to keep everyone equally informed and involved.

Issues that emerge from passionate and close teams are perhaps the most difficult ones to fix, as they lie deep in the culture, which can be hard to change.

Here’s what we’ve often seen in businesses with small, passionate teams:

Strategy✅ Quick decision-making by informed technology people❌ Strategy exists but in an individual/leaders head and is not documented
❌ Limited measurement of strategic performance
Product✅ Functional, no frills product❌ May lack polish in some areas, i.e. UX High levels of technical debt
Team✅ Good levels of communication and autonomy❌ Skills gaps, particularly around technical leadership and ❌ QA Immature approach to knowledge sharing and continuous improvement  
Approach✅ Responsive, agile approach❌ Limited governance and measurement of success Processes likely to be informal and undocumented
Platform✅ Functional architecture❌ May lack flexibility
❌ Challenges around uptime and capacity
Resilience ❌ No dedicated security resource
❌ Reduced performance and availability
❌ Disaster recovery plan may be flawed or non-existent

You don’t need to be perfect to achieve high performance

While it may be daunting to see all the potential stumbling blocks different team types face, taking action in the right areas can mitigate risk and build a healthy environment for growth.

The truth is that there’s no holy grail formula to create a high-performing team. Instead, the teams that perform the best understand their strengths and weaknesses.

They lean on their strengths and work on fixing issues that not only are they able to resolve, but also make the most strategic sense to focus on. It may not be feasible for a small team to completely automate and transform their entire process but they may be very successful at shifting the culture to achieve higher team autonomy.

Strategy and leadership matter

Our experience through the years has shown that when it comes to scaling an emerging business, building strong foundations through a pragmatic approach is better than seeking perfection in every domain.

Challenges stemming from team characteristics don’t have to become an inhibitor to growth and success. What matters is how the business plans to overcome these challenges. In fact, the only way to mitigate such risks is a solid, well-defined, and well-documented strategy, championed by good leadership.

When the latter is missing, important messages fall through the gaps, and even the best strategy will crumble.

With thanks to Barry Williams and Aleksander Maricic for their insights and expertise

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