The Jungle, the Dirt Road, and the Highway…

An experienced VC once described the stages that he saw B2B companies going through as the jungle, the dirt road, and the highway. 

During the initial “jungle” phase, whilst the company may have successfully sold their initial product offering or service to early adopter customers, every sale still feels hard-won.  Like an explorer deep in the jungle, progress involves energetically hacking away at the surrounding undergrowth, but the best way forward is not yet clear.  Inevitably, much effort is wasted.  Many start-ups – maybe a majority – never get beyond this stage, but those that do find themselves on the dirt road…

On the “dirt road”, patterns are starting to emerge and a way forward is becoming visible, even if the path is not always completely signposted and still requires widening and straightening.  Whilst the general direction is clearer, work still has to be done to ensure that the company can move faster in its intended direction.  Companies often broaden their offerings and recruit significant sales forces and or partner channels in the hope that they will speed the company’s progress.  Many established companies find themselves bogged down by uneven or unpredictable conditions, but a few manage to make it to the final stage…

By the time these companies reach the “highway”, their direction is clear – to the point of being difficult to change.  Processes have become highly standardised and – in theory – very scalable and repeatable.  As long as conditions remain constant, rapid progress can be made.  But it’s hard for these organisations to divert from their path, even if the environment changes.  Vehicles that are optimised for the highway can find it challenging to go off-road and explore dirt tracks or jungles that might represent radically new opportunities.

I found his simple metaphor tremendously powerful.  As he pointed out, very few founders (with the probable exception of Gates, Dell and Ellison) have managed to successfully steer their companies through these transitions. But it’s not just CEOs that need to adapt – it’s the whole organisation, and I believe that this provides an explanation for why so many apparently promising companies get stuck in either the jungle or the dirt road, and why companies who appear to be masters of the superhighway end up running out of road.

Managing to evolve… 

The attitudes, skills and experience needed for employees to make the right contributions (and I’m not restricting my remarks to executive leadership here) can vary significantly from one stage to the next. Factors like the ability to work with or without structure or supervision, tolerance for ambiguity, willingness to change and openness to innovation all play their role. Successful companies manage to establish the appropriate culture and bring in the right people at each stage along the way, but one thing is clear – they manage to evolve.

For example, I’ve seen many “dirt road” companies accelerate their progress as a result of bringing in a suitably experienced chief operating officer (COO) or equivalent who can complement an entrepreneurial founder by adding the appropriate degree of discipline, focus and alignment. But I’m sure that you’ve also seen many hiring disasters when jungle or dirt road companies were tempted to bring in “heavy-hitter” sales leaders from a leading highway-style company who turn out to be completely incapable of delivering results without the support of the infrastructure and brand awareness they have become so accustomed to.

Getting the right people on board… 

Having the “right” people on board prior to each transition seems to be vital, as does finding ways of helping existing employees grow with the company. The experience that comes from coping with change often proves to be critical. When adding new talent, the evidence suggests that companies should strive to bring in key people who have successfully (and recently) experienced the transition from the current stage to the next.

The journey isn’t over when the company finds itself on the highway, because as we’ve observed, companies that are optimised for this mode can find it difficult to travel off the beaten track. As Clayton Christensen pointed out in the Innovator’s Dilemma, organisations at this level of maturity can find it hard to exploit radical new opportunities. Adaption – and ultimately, survival – may depend on creating autonomous business units populated by people with a jungle or dirt road mindset.

Moving ahead… 

So – where is your organisation? In the jungle, on the dirt road, or driving down the highway? And – assuming that you have ambitions to accelerate your progress or move to the next stage, what steps are you taking to ensure that your team is fit for the journey?