A successful company grows. In growing from dozens to hundreds of employees, the company forms a culture of innovation that attracts an extremely capable individual: generalists who also have great depth, potential entrepreneurs, geniuses who can Get Shit Done. They build content, they build sales motions, they turbocharge they company’s growth and all is well for a handful of years.
But the company’s growth holds the seeds of a problem; there are only so many brilliant pinch hitters out there, and maybe they don’t want to work for the thousands-strong company that is now showing signs of being large. Mistakes have been made, conflict has happened, and process is growing. Worse, the hiring pipeline has changed; our geniuses can’t hire fully capable generalist backfill as they grow out of their roles, and are having to create more specialized roles for their new hires. The geniuses are getting bored and are dissatisfied with the company’s products.
Some of them move laterally to find another exciting startup. Some grow into capital E executives, whether at the company or elsewhere. But there’s fewer executive roles available than potential candidates, and that means a body of bored smart people looking for trouble. As they say, the devil finds work for idle hands to do.
Cannibalism starts when this group pitches to leadership that the company has lost its innovative spark. “R&D is doing a great job on hard problems, don’t get us wrong, but they’re kind of slow and they can’t do everything so we’re just going to try out some ideas, prototyping you know.” That is a lie. The cannibal team is forming a second startup on the first company’s resources. They will produce parallel development and sales motions immediately after their first e-staff meeting, if they haven't already done it. First they go dark, cutting ties with their old teammates; then they return in a blaze of marketing. Leadership shares their concerns of course! The big company is different than the little company was, and arguments that all these new resources could be used more innovatively find attentive listeners. The cannibals have momentum and a mandate to take resources.
Now the company has a problem, and the new questions are “how bad is this” and “what can the company do”. The answers depend on the type of business that has been built before the cannibalism starts.
A company with strong partnership and a channel sales culture barely notices the impact of cannibalism. The new team fits into the same mold as old partners, and their shenanigans are mostly contained in the term “channel conflict.” It’s worse than normal channel conflict because the cannibals are company employees, but it’s survivable. The cannibals may even launch into a separate partner company.
Similarly, a company that is practiced at mergers and acquisitions may be quick to launch the cannibals as a new company and potentially bring them back later. There’s a bit of turmoil as personnel move back and forth, but no significant impact to the parent company's go-to-market motions.
Tougher times may await the company that is structured to build everything and sell it directly. At worst, the cannibals represent an identity crisis. At best, they represent a distraction. Maybe the mainline product management and engineering leadership have been headed in a terribly wrong direction, and the cannibals are a necessary corrective. Or maybe the cannibals are slowing and stopping committed projects, breaking promises to customers, and steering the company away from product market fit. Most likely the outcome is somewhere in the middle: a distracting identity crisis.
A distracting identity crisis is not the sort of thing that healthy companies leave around for very long, so the cannibal team has to settle into a productive model, whether by spinning out, joining the R&D org, or joining the partner ecosystem. As long as none of those is an option, their presence is a problem point at a need to change the company.