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A complete guide on what is startup culture, why it is important, what are its effects, and how to achieve a successful one in your company.
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If you ever had a job that sucked and didn’t pay well but you loved it anyway, what was it that made it special? That’s the atmosphere, or in the startup ecosystem, the “startup culture”.
If you’re running a startup, building such an atmosphere comes with a series of benefits that include easier recruiting, longer employee retention, higher workforce motivation, greater productivity, and less frequent mistakes.
In this article, we will be covering what really is “startup culture”, its effects, who is responsible for it, and a quick guide on how to achieve it, as well as some examples from startups that have done it really well.
First of all, what’s the culture?
The culture of a society boils down to values and interactions amongst everyone and everything. Those values and interactions turn into what we know as the arts, education, institutions, and entertainment.
In the same way, your work culture or company culture is about the shared company values and those who make it up, as well as the way they interact with each other.
Workplace culture is mostly about the underlying or unspoken psychology of the company, what the company represents, and its relationships amongst its members.
Work culture can be casual, fun, very professional, friendly, not friendly, competitive, and much more. Primarily, it is the look and feels for those who work there -- not the customers even if it’s a B2B company.
Okay, so what’s startup company culture, then?
Startup culture is a relatively new type of work culture aimed at breaking down the barriers and hurdles of growth that more established corporations might have.
Startup culture is mostly known for being creative, laid back instead of rigid, and passion-driven.
There’re are four key factors that make up the feel of ideal startup culture:
Startup culture has also gained both a good and a bad reputation for being perhaps too laidback. Maybe you imagine people playing foosball and sitting around in bing bag chairs with flip flops. The reason these types of things might work depends on the culture, not the environment.
WeWork’s Broadway workspace has both bing bag chairs and foosball. Pretty sure some New Yorkers go with their flip flops. They are just missing ping pong tables!
The work environment is not synonymous with culture. Simply adding a foosball table and free snacks will not solve your work culture problem, but will define your working environment, which refers to the physical attributes of the workspace.
While the work environment is not the same as the startup work culture, it is important. The environment can either help the culture or hinder it.
Think about where you work: Can you easily engage the people you need to? Does the lighting make you feel drained or energized? Do you feel confined?
If you do not have a thriving, passionate, free-flowing company culture don’t worry... or should you worry? We will then see the effects that the wrong startup culture can have on performance...
While most entrepreneurs may agree on the general concept of a “startup culture”, most of them will probably disagree on the startup culture values.
That’s why here we bring 5 explanations on how some well-known founders address their startup company culture.
Jeff Lawson is the co-founder of Twilio. +4 years ago, he was interviewed on Zurb’s podcast and asked about startup culture. There, he claimed the following: “Thousands of decisions are made every day in Twilio. Culture is how I, as the leader of the company, trust that each of those decisions is the right one. Another way to think about it is that all those decisions should add up to represent “the Twilio way”, the way Twilio would do these things.”
Then he added: “Earlier this year, we rolled out what we call our nine things, which are like our core values. Most people think of core values as a thing on the wall and a nice frame with words like 'integrity' that nobody pays attention to. We, instead, have articulated 9 things that we liked and cherished and felt were fundamental to who we were as Twilio.”
In 2012, Joel Gascoigne, co-founder, and CEO of Buffer, wrote an article in his blog describing his view about culture and how it looked like in his company. He claimed: “Although company culture is something that is worked and adapted over time, it is heavily affected by the personalities of the founding team. There’s no right or wrong with culture, it is simply a combination of natural personality in addition to proactive work to push the culture in the desired direction and maintain certain values.”
Then he adds: “Building a culture that inspired people to work for you, requires time to make changes and shape it. On the extreme of the proactive approach of culture, you can hire and fire people very specifically based on cultural fit with your company”
He starts by claiming the following: “Secret Santa gift exchanges, karaoke nights, Nerf gun fights, are not company culture things. Those are things people working together may or may not do and that indicate a specific type of workplace environment, but they are NOT company culture”.
Then, he talked about the three things that he believes that form a company culture: “Values, those that are stated by words and exhibited through actions; mission & vision, the goals that the company is driving toward and the force behind it; hiring, firing and promotion criteria, the reasons why people join the company, are let go or receive a promotion/reward.” And mention something that goes hand in hand with Jeff’s thoughts: “actions speak louder than what’s on the company mission statement or the core values list.”
Brian Chesky, co-founder and CEO of Airbnb, has also written about the subject, particularly about tech startup culture. He did it on a Medium article titled “Don’t Fuck Up the Culture”, where he shares these words of advice given by Peter Thiel to Airbnb’s team after the company had raised $150M in series C.
On that article, Brian shares his view on how culture could be built: “We’ll build it by upholding our core values in everything we do. Culture is a thousand things, a thousand times. It’s living the core values when you hire, write an email, work on a project or walk in the hall. We have the power, by living the values, to build the culture. We also have the power, by breaking the values, to fuck up the culture. Each one of us has this opportunity, this burden.”
On it, he shares Zappo’s hiring and training process, which he believes its the base of company culture: “Building and maintaining the culture starts with the hiring process. At Zappos, we have two sets of interviews: the first one is done by the hiring manager and his/her team, looking for relevant experience, technical ability, etc.; the second one is done by the HR department which looks purely for culture fit.”
Once hired, the employee goes through a 4-week training program. Tony states: “On it, we go over Zappo’s history, the importance of customer service, our long-term vision and philosophy about company culture, summed by 2 weeks or taking customer support calls. We also offer everyone $2,000 to quit as we want to be sure everyone is there for more than a paycheck.”
A common question around startup company culture tends to be how different it is from corporate culture.
At first glance, it seems like both of these culture share the same core. Many of them have similar values, ethics, objectives, and missions.
However, corporates and small business & startups differentiate a lot on the way of doing work, their decision-making processes, and the size of the workforce, among other factors, which definitely has influence over the culture of the business.
In the following illustration, you can find some of the common differences these two types of organizations have.
Note that none of these cultures is better than the other, they are just different. What may perfectly fit and work well for one kind of organization, market, and founders will probably fail on other kinds of organizations.
When you are working from home or a coffee shop you are working remotely. A remote startup is essentially when you’re running your own startup business and basically, all your employees are also working remotely.
Most of the definitions and visions of culture shared by the above entrepreneurs claim that culture is something you can work on to shape and adapt. However, those running remote startups may not it’s not that easy, right?
In these cases, the #1 key is to keep constant and open communication with team members. If people have questions that are not getting answered, then production will halt, or worse it will go on with huge gaps or mistakes.
Another key factor is passion, or motivation if you prefer. If your employees are not motivated and all on the same page focused on a common goal, then things will fall out of synchronization very quickly. Make sure your team members do not lose steam, motivation, or fall out.
We’ve written a long guide on remote startups, which you can find here. You should also make sure to read this detailed post from Nick Francis, co-founder of Help Scout, on how have they built a successful remote culture (which he claims to be one of the best decisions made). And this one, a huge list of team building activities to carry out if you’re a remote startup founder.
Work culture affects the startup in many ways, as explained before.
Among these ways, one is employee theft. Nearly one-third of all employees commit some form of employee theft. That is a pretty high percentage to ignore.
One source has this to say, “the U.S. Department of Commerce estimates that employee theft of cash, property, and merchandise may cost American businesses as much as $50 billion on an annual basis.”
All of this information isn’t to make you suspicious and fire everyone (although there is likely someone that you should fire); it is simply to arouse you from your normal routine and business priorities.
Work culture also matters on the production level, with growth and profit. It affects the bottom line.
Author, Entrepreneur, and speaker Gary Vaynerchuck puts it this way: “the internal company culture will either enable your company to grow or it will rot it from the inside out.”
If your employees hate their work, do you think they are going to produce the best results? If your employees have a bad relationship between them, do you think they will be able to collaborate and communicate well?
What about mistakes? Employees that aren’t motivated with their jobs are more likely to commit errors and deliver bad-quality output.
If you want better results, on the side, focus on the ones making them. What kind of motivation or inspiration do your people need?
Focus on helping. Are you leading or just managing your people? Leading versus managing is a key detail in company culture, which displays the power dynamics of the managers and subordinates.
Managers are supposed to have knowledge and experience that help rest of the employees. If people do not feel like the managers are approachable than the information cannot flow.
I don’t want to pretend I know everything about being a leader, but consider this: Is the bottom line better because of you? If everyone you were in charge of could vote whether you were fired, what would happen to you? Do you believe the people you manage (and the company) are better off with your help and guidance?
Some great books on leadership are: “How to Win Friends and Influence People in the Digital Age” by Dale Carnegie, which is an adjusted and more modern rendition of the original; and “How to Lead When You’re Not in Charge” by Clay Scroggins, which explores the importance of the process of moving up as well as when you are actually in a position of leadership.
If you’re not into actual reading, the above books are available in audio versions. If you’re looking for something more engaging than a book, Zig Ziglar has a leadership and success series called, “Be a Leader. Become a Success” with timeless leadership principles.
Hasn’t this convinced you about the importance of culture within your startup? Here’re some stats that will probably do it:
The interns and newest employees are responsible for setting and changing your company culture… does that sound right? Of course not. If it is your company, then you need to fix it. It starts at the top.
While this article is mostly geared towards startups and leaders, anyone who is willing and able to lead can make a powerful impact.
As author and speaker Simon Sinek point out, people are trained to do a job. If they do that job well they get promoted, and then they manage people to do what they used to do. The problem is that no one is taught how to be a good manager or how to be a leader.
Management training should be as equally important as any position if not more important. There should be some kind of basic instructions, guidelines for your company, resources, encouragement, and additional or extra training for growth.
These are your leaders. Ensure that they are managing your employees in the most effective way possible. If you have a high turnover rate, take responsibility. If people are not excelling or producing below their capability, take responsibility. Instead of looking at everyone else as a problem, consider how you can help them reach their potential.
To paraphrase Zig Ziglar, what is worse, training an employee to produce extraordinary work who may leave you for a better job, or keeping an untrained employee which continues to produce below average or average work?
As a CEO or founder, you are responsible for ensuring the people you place in management roles have or receive the necessary skills to lead effectively. You need to be coaching and pouring into them so they can better pour into your employees. If you don’t, who will?
Leaders are responsible for setting their work culture. You do not need a title to effect change (although it certainly helps). When growing your startup or business, consider the leadership capabilities of those you are putting in charge. Skill and expertise in, let’s say sales, is not the most important thing when it comes to being a sales manager.
Putting the right people in charge is essential for any company and its culture.
Hire the right people. I’m sure you are hiring the people that you think are the best fit for the position; however, no position is contained in a vacuum. What I mean is, if you hire a purchasing manager, they are going to have to work with other team members.
What kind of team do you have? Everyone you bring in should match the type of culture and team you are creating.
Wolter Smit is a co-founder and CEO of TOPdesk who has a Ted Talk on hiring. He describes two types of people: people that need a carrot and stick method for motivation and people that are self-propelling.
If you are searching for the self-propelling new hires, find out what they do for fun. Find out if they are happy. Find out if they can be happy at work. What are they passionate about?
Hiring the right people is more than just finding the most qualified candidate or best resume. Consider their emotional and physical health, what it takes to motivate them, and if they fit with the rest of your team.
Caring for your employees is the next step in building your company culture. Once you have the right team members it is vital that you actually care about their wellbeing and success. How much can you expect them to care about the work they are doing for you, if they don’t think you care about them.
People may want to do a good job, but you want to make sure your employees WANT to do the best job. How can we activate that desire in them?
To Gary Vaynerchuck, making sure his employees know he cares is front and center. Vaynerchuck truly believes in “The Ambition of a Human Based Company”, where if he can be front and center and just give people a little bit of time so they know he cares, they will go the distance.
The biggest principal to him is empathy. As the saying goes, “No one cares about what you have to say, unless they know you care about them.”
To create a strong and lasting work culture, it is important to instill a few rules or “startup culture values” and never lose sight of them.
Leading by example may be a cliche, but it is often forgotten. If you want your employees to be rude or short to each other, be sure to do that to them when they make a mistake. Remember, work culture is a top-down issue. Always be patient, kind, and graceful when people make a mistake, and they will pass it on (if they don’t, you need to fix that).
Acknowledge people’s achievements. Many highly motivated and driven people just want to power on through to the top. However, more often than not, some team members need to be acknowledged for their work and accomplishments.
It might just be one more step for you or a piece of the puzzle, but it is their hard work and time. If people don’t feel appreciated they will not want to continue to perform at their best.
Lastly, keep in mind that your employees are real people. That might sound obvious, but it is important to understand that it is very difficult to “check your baggage at the door.”
Take the time to learn about your employees and build relationships. Life throws hard times at everyone. Check-in and keep your eyes open for when someone might be going through a difficult time. Maybe they need a day off or to leave early on certain days.
Making connections with your team members is the only way to know when there is something distracting them from performing at their best. Making connections is the only way you will learn what they need to be fully present and putting in 100% every minute they are on the clock.
Spotify is well known for its great startup company culture, which they call “Spotify Engineering Culture”. Spotify’s engineer and product teams are organized in “squads”, self-organized and cross-functional groups of no more than 8 people, who have complete autonomy on what they build and how they do it.
Of course each squad has a mission and they are all coordinated so that they are aligned with Spotify’s mission and objectives. They aim to achieve both high alignment and high autonomy. Only if alignment is achieved you can trust on a group of people to do work completely on themselves, without worrying they will go on contrary directions.
Another successful case is Buffer’s culture. We’ve already talked about how Joel, it’s co-founder, thinks about startup culture. This great culture can be identified in Buffer’s approach in 2013 to getting hacked and making their users publish all kinds of posts on their social networks.
The company accepted 100% responsibility, delivered clear and transparent messages to their users and the whole community and provided helpful rules on what could be done by each user to protect their accounts. This brought positive press for the startup, which, according to Joel, saw a massive increase in signups in those days.
Another interesting case is Auth0’s one, which considers “innovation, experimentation and learning” as the backbone of the company. Similarly to Spotify, this startup provides their engineers with a lot of freedom to innovate and try new things. Failure and mistakes are incentivated and it’s encouraged to learn from them and keep moving.
Note that half of Auth0’s team is remote. Clayton Moulynox, Director of Culture of the company, states that, in that way, people can work when and how they perform better.
Wistia’s case is also really interesting, particularly for those building a tech startup culture. They have created the Wistia Code School, in which they pair their developers with employees within the company interested in learning to code. The training lasts 4-5 months and it culminates with the employee solving some real-world problems.
These employees are generally within customer support, which means they start solving coding issues themselves, instead of opening tickets and asking engineers for help as they used to do.
Finally, Paylocity is a great demonstration of how can culture be shaped and adapted. They rely on employee, partner and client feedback in order to determine their culture and how they can improve it. The objective is to make sure the team understands the company’s goals and objectives and work in contributing to them.
By now, you might have realized startup company culture is a very complex issue that affects the success of your company on many levels. If you don’t put the time into making sure your employees are performing at their best then you are losing money.
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