Grove Ventures’ ‘Shift Happens’ Report: The 6 Archetypes of Companies that Focus on the Software Development Life Cycle
Earlier this week, we presented Grove Ventures’ Shift Happens Report: The State of Software Development Life Cycle 2023. We learned a lot from our extensive work in the software infrastructure field, as well as in this research. We saw that a lot of founders and investors often view the ecosystem through the lenses of the startups’ value proposition for the software development life cycle (i.e., focusing on a company’s value proposition for observability, testing, security or FinOps, and what new features or technology this company brings to the landscape). The debate on startups’ Go-to-Market strategy, we noticed, is many times delayed to later stages. We believe, however, that SDLC-focused startups should start planning their GTM strategy much earlier.
After many hours of interviews, we reached clarity that enabled us to develop a new framework and categorize SDLC-focused startups into six distinct company archetypes, based on their Go-to-Market strategy. We believe that identifying the appropriate archetype can assist companies in shaping their go-to-market strategies effectively, accelerating their growth, and proactively addressing unique challenges ahead.
To figure out which archetype matches their companies:
First, founders should differentiate between three buying personas for their offering:
- Engineering (e.g. VP of Engineering/Software Developers/Middle management at software development organizations)
- Operations (e.g., Head of DevOps/VP of Platform/Site Reliability Engineers)
- External entities in the organization (e.g. Product Leads/Chief Information Security Officer/Head of Growth).
Then, founders should ask themselves three questions:
- Who owns their budget?
- Where do they land, and who is the first user of their product?
- Who is their end-user?
To get a taste, here are three examples of archetypes out of six mentioned in the full presentation below:
‘The Founding Fathers’ Archetype
The first archetype is easy to spot from a mile away: ‘The Founding Fathers’. These are the titans of the software development world, , the table stakes in every engineering organization. Think of Github or Atlassian.
- Most of the companies that match this archetype were founded 10-15 years ago, when the software engineering landscape transitioned from traditional waterfall approaches to Agile methodologies and adopted practices as CI/CD, microservices, Git version control.
- ‘The Founding Fathers’ managed to penetrate the market with their products and get all relevant stakeholders in organizations to adopt them: Engineering, Operations, and External Entities.
- Because of the ironclad grip that the ‘Founding Fathers’ have over the market, they became very difficult to compete with. We believe that this is mostly a ‘closed list’ – and it is therefore hard to build huge companies in their already established categories.
For companies that match this archetype, we believe GenAI might be key to disrupt the market. Since big companies already embraced code generation tools, now Large Language Models can be used in creative ways building on these companies’ immense amounts of data.
The ‘DevFlix & Chill’ Archetype
The DevFlix & Chill archetype covers companies that build solutions that many engineering teams might have needed to build on their own, but were reluctant to do so. These companies often answer a need which is external to the engineering organization (e.g., of the Revenue team).
- Engineering teams often face the Build vs. Buy dilemma, and decide whether to spend time on building and maintaining a custom solution, or purchase an off-the-shelf product.
- Companies that match the DevFlix & Chill archetype solve the Build vs. Buy dilemma easily, by bringing instant value with a self-serve, bottom-up mechanism.
- DevFlix and Chill Go-to-Market strategy might seem complicated, as it requires aligning multiple buying personas at the customer side as part of the workflow: 1) The need and budget come from an External team (such as Product or Revenue teams), and 2) The approval is given and the implementation is executed by the Engineering team.
- Though the adoption cycle of products of companies that match this archetype is complicated, they are very immune to displacement – as both the business team AND the engineering team will have to pull the trigger. Until that happens, companies that match this archetype can “chill”. This is an intriguing archetype that includes many category leaders.
The ‘Sneaky Bastards’ Archetype
This archetype is a tricky one. The ‘Sneaky Bastards’ use a clever distraction strategy to penetrate the market, which resembles the same ‘Look, a Bird!’ distraction method used by parents to convince a reluctant baby to eat.
- The Sneaky Bastards strategically “Shifted Left”, focusing their marketing endeavors on developers to initiate lead generation.
- Their end-users are the developers (the Engineering team), but other External teams, for instance – security teams, gain the most value out of their products. They readily embrace them and then endorse them to distrustful developers. This archetype operates on two fronts, and requires dual attention.
- This is an emerging category, in which Snyk is paving the way for many young startups (usually in security, authentication and configuration sectors). These young startups must remember: even Snyk does not rely solely on PLG.
When founders build companies, we encourage them to start thinking about their Go-to-Market strategy, even before writing their first line of code. They should identify their company’s archetype and learn from the Go-to-Market experience of their predecessors.
Identifying a company’s archetype can help founders unlock their full potential, visualize their journey to product-market-fit concerning all their stakeholders for all relevant buying personas, and assist with:
- Building the right Go-To-Market strategy
- Building the right business model
- Staying away from known pitfalls
- Learning to better plan their land and expand’ growth strategy
- Understanding who is their buyer; Understanding who is their user
Send Us Your Feedback and Join Grove Ventures’ Shift Happens Community
The software developer life cycle continues to evolve. The six archetypes presented above are based on market insights we gathered as part of Grove Ventures’ Shift Happens research. We started this ecosystem discussion back in May, and we invite you to challenge our perspectives and share additional thoughts and insights:
To join our Shift Happens community, please fill in this form.
Special thanks to Daniel Ben Zvi, Uri Schiner, Ofir Ehrlich, Aner Mazur, Zack Smocha, Amit Attias, Ofer Kirshenbaum, and Ran Ribenzaft for reading drafts and contributing their thoughts.
>>> Read the previous part in this series: The State of Software Development Life Cycle 2023