Frankenstein companies
There’s a kind of company that is structurally one thing and must present as another — usually a non-tech business wearing a tech company’s face, for the valuation. The contradiction can’t be resolved without giving up either the self-image or the funding story, so the company keeps it. Everything that breaks inside is the contradiction expressing itself through people.
Over the last four pieces I’ve described patterns that quietly break technical organisations: the hero hire, the bridge that keeps two teams apart, the gap between what founders ask for and what they’ll actually allow, and the slow trap of staying too long. I’ve treated them as separate failures. They’re not, quite. They cluster. There’s a kind of company where all four show up at once, reinforcing each other, and it’s worth naming because if you can recognise it from the outside you can save yourself years.
I call them Frankenstein companies. The defining feature is a mismatch between what the company is and what it needs to present itself as.
Three kinds of company
It helps to start with a cleaner distinction. Broadly, companies fall into three buckets where technology is concerned.
There are technology companies, where software is the product, the business model, and the moat. The thing they sell is technology, the economics are software economics, and engineering sits at the centre of the org because engineering is the company.
There are companies that leverage technology, which is, by now, essentially every other business. A retailer, a logistics firm, a bank — they all run on software, often sophisticated software, but the software is infrastructure in service of a non-software business. Nobody at a supermarket chain is confused about whether they’re in the grocery business or the software business. Technology is load-bearing but it isn’t the point, and the org is honest about that.
And then there’s a third category: companies that are organisationally and economically the second kind, but need to present as the first kind. This is the Frankenstein company — a non-tech business wearing a tech company’s face, usually for reasons of funding and valuation.
Why the category exists
The incentive is straightforward and it’s financial. Software-like businesses command dramatically higher valuations than ordinary ones. Pure software companies routinely operate at 70%-plus gross margins with predictable, recurring revenue, and the market rewards that with revenue multiples of ten times or more — multiples an ordinary services or retail business will never see. If you go to investors and say “I want a large amount of money to sell clothes” or “to lease office space,” you face the modest multiples of those industries. If you say “I want a large amount of money to build a platform,” you reach for the software multiple. Today the magic word is AI; a few years ago it was platform; the function is identical.
The canonical public example is WeWork. When it filed to go public in 2019, the word “technology” appeared in its prospectus over a hundred times — a property-leasing business, with property-leasing economics of roughly 20% gross margins and enormous lease liabilities, presenting itself as a technology company to justify a technology company’s valuation. The market eventually called the bluff, spectacularly. But the instinct behind it — dress the business in software’s clothes because software is worth more — is everywhere, and most of the time it doesn’t blow up publicly. It just quietly distorts the company from the inside.
Why the disguise breaks the org
Here’s the thing that makes this a structural problem rather than just a marketing exaggeration. A company that needs to be a tech company for the funding story, but is run by people whose instincts come from a different industry, ends up with a permanent internal contradiction. The pitch deck says platform. The CEO’s mental model says fashion house, or property firm, or magazine. And those two things demand opposite organisations.
This is where the patterns from the rest of this series converge, because the Frankenstein company is the environment that generates all of them.
It hero-hires technical leaders, because it has a structural contradiction it can’t resolve and a hero is cheaper than confronting it. So it brings in a senior technologist to “make us a real tech company” — a remit that’s impossible while the company’s centre of gravity remains non-technical — and when that person can’t square the circle, it concludes they were the wrong hire and brings in the next one. The carousel isn’t bad luck. It’s the contradiction expressing itself through people.
It runs bridges that reinforce islands, because the company has two halves that genuinely don’t speak the same language — the technologists it needed to hire for the story, and the domain people who actually run the business — and someone inevitably positions themselves as the translator between them. The gap never closes, because closing it would force the question of which half the company actually is.
It asks for a product team and means a feature team, because the founder comes from a domain of traditional creative authority and runs a publishing-house model: I hold the vision, you execute it. The company says it wants empowered, outcome-owning product people. Its structure can only support people who execute a single authority’s taste. The product designers it hires for the story leave, because the empowerment that would retain them was never on offer.
And it grinds capable people into staying too long, because the work is genuinely interesting, the people are often genuinely talented, and the contradiction is invisible enough that you keep believing the next reorganisation, the next hire, the next quarter will resolve it. It won’t, because the contradiction is load-bearing. The company can’t resolve it without giving up either its self-image or its valuation story.
How to recognise one before you join
The reason this taxonomy is worth carrying is that Frankenstein companies are recognisable from the outside, if you know the questions to ask. Before you take a senior technical role, I’d want to know:
What does the CEO think “product” means? Ask it directly. If, at a company selling software, the answer drifts towards the physical good or the editorial output or the brand rather than the thing engineering ships, you’ve found the contradiction.
Where does the centre of gravity sit? Who’s in the room when strategy is set? Whose decisions are unquestionable? If technology is the valuation story but technologists are systematically downstream of the “real business” people, the story and the structure don’t match.
Why does this company describe itself as a tech company? Listen for whether the answer is about what they build or about what they’re worth. If “technology” is doing more work in the fundraising narrative than in the org chart, take note.
What happened to the last few people in the role you’re considering? A short, repeating tenure in senior technical roles is the single clearest external signal. You’re not looking at a series of bad hires. You’re looking at a contradiction with a high turnover of people sent to resolve it.
None of this means a Frankenstein company is a bad place to work, or that you should never join one. Sometimes the work is excellent, the people are extraordinary, and you go in clear-eyed about what you’re taking on. The failure isn’t joining one. The failure is joining one thinking it’s the first kind of company — believing you’ve been hired to build a technology organisation, when you’ve actually been hired to be the technology costume over a business that is something else entirely. Know which one you’re walking into, and you can make a real choice. Mistake the second for the first, and you’ll spend years trying to resolve a contradiction that the company has every financial incentive to keep exactly where it is.
This is the final piece in a short series on the structural patterns that quietly break technical organisations — the hero hire, the bridge that keeps teams apart, the product team that’s really a feature team, knowing when to leave, and the kind of company where they all converge. If any of it landed close to home, that’s usually worth a conversation.