The startup culture has become a thing of legend. Decades ago, startups began filling their offices with scooters, zip-lines, and ping-pong tables. Today, perks like free massages, catered lunches and “beer fridges” are common place, even expected. 1pm - 4am has become an acceptable workday. Men wearing kilts or employees with crazy piercings or neon colored hair are frequently seen in the halls of technology companies of all sizes. Even larger companies like Google, Netflix, Apple, and Zappos are renowned for their unique “startup culture”.
I’ve now worked for three different startups in as many years. I have also interviewed, have friends who work at, or met with leaders of many other startups. As such, I’ve gotten a pretty good sense for a variety of very different startup cultures. My company, Spot, with only five employees, is a tiny team. As we discuss scaling, however, I’ve started to spend a lot of time thinking about the kinds of things that differentiate a startup’s culture, how to cultivate the good and how to avoid the bad.
A startup’s culture is, to me, as important as anything a startup strives to create. Startups must be nimble and innovative in order to be successful. They have no hope of outspending or outlasting an established company and so they must outpace and outthink their larger competitors. In essence, the startups primary advantage is their culture, an environment where creative, passionate, hard working employees can thrive.
In the earliest stages, this is relatively easy. The first employees are friends of the founder or hand picked candidates. In the beginning, the founder can make it a priority to focus on culture. As the team scales, however, and the demands on the founder increase, he or she becomes further removed from the process of building and maintaining culture. At this point, the startup must be like a crystal, so imbued with the culture that as it grows it maintains the same core structures and values. The culture must become, as our advisor James Currier once explained to me, “part of the company’s DNA”.
So, what culture should a startup strive to create? What structure best establishes the culture “into the DNA”?
I believe there are four high level ideals a startup should strive for. Some of what follows might be obvious, other parts unfounded. These are my beliefs based on my anecdotal experiences, so pull out your salt.
1. A Rigorous Hiring Process
Your team is your culture, and for most startups, your team is your product, so this is by far the most important point. I firmly believe that a good employee is worth at least 15 decent employees and an infinite number of bad employees. Don’t throw bodies at a problem, get your best and brightest to work on it. Consider a three month trial period for new employees. It might be scary for some applicants, but committing to a job is a lot like a marriage: shouldn’t you try living together first? Develop a rigorous interview process and cultivate interviewing skills in your employees. When hiring, look for potential and eagerness over experience. Invest in getting your team together outside the office. Bonding experiences are invaluable. Try to build a team of people who genuinely like each other. It’s not easy, but when it works, it’s an amazing thing to be a part of.
In my experience, transparency is empowering, while opacity is frustrating, confusing, and frightening. Share your information. Share your problems and you might be surprised where the best solutions come from. Share your successes to improve morale, but share your failures to make sure you learn from them. Don’t be afraid to share bad news. When you’re in charge of sharing information, you control the tone it’s shared in. If you try to bottle it up, it will leak without the proper context. Employees are apt to return the favor, sharing information up the chain if they feel it’s reciprocated. Information leaking outside the company is a serious threat, but if you can’t trust your employees, you have a bigger problem.
3. Employee Ownership
It is standard practice in startups to share equity with your employees, but there is more to ownership than just stock options. There is pride in ownership, a drive to show off, to accomplish something real. The closer your employees are to their work, the more of themselves they can see in it and the harder they will work to accomplish their goals. Listen to your employees ideas, if they’re good, put them in charge of implementing them. If they’re not good, try to convince them. Give employees high level goals and let them determine the details, they’ll be more apt to put all their heart and soul into working on their own solution. Don’t be stingy with equity. You can’t do it alone and you’re already sharing the risk. Share the reward too.
One of the benefits of working for a startup is the flexibility to work when and how you want. Startup work is mentally and physically demanding and it is easy to burn out. If you force your employees to work on your terms, you risk getting substandard work from exhausted and discouraged employees. Trust your employees to get their work done on their own terms. Also, be flexible about how your employees solve their problems and what problems your employees are solving. There are always higher level goals a company needs to accomplish, but a good employee left to play may well stumble upon something amazing. Twitter and Gmail are likely the two most famous examples but it happens all the time in varying degrees.
Speaking of Twitter, I recently had the opportunity to speak with Jack Dorsey about the culture he is trying to create at Square. He described managing a startup as an editorial role (fitting since they share offices with the San Francisco Chronicle). Much like a reporter, individual contributors should be able to pitch ideas for projects, and managers, like editors, should direct their contributors with high level suggestions. I think this is a perfect model to try to emulate. Rather than worrying about the details of the business, managers should work to maintain a consistent tone and vision in their product. Contributors should be given the flexibility to set their goals and should be given access to all the tools available to successfully accomplish their goals. In the end, it is the contributors who are on the ground, who experience the battle day to day, and who write the stories that define your product.
Building and maintaining a culture is an ongoing process. A startup is an evolving, ever changing entity and your culture will be too. Don’t expect your culture to evolve overnight or to arise from a single change. If you consider the culture, however, as you make decisions, and if you strive to create a great team with transparency, flexibility, and ownership I think you will quickly begin to reap the rewards. It’s not easy work, but nothing in a startup is, and your culture is well worth the challenge.