Beyond the Pitch

The Case for Culture in Startups

Culture is a word that gets thrown around, from Fortune 500 companies to the smallest startups.

People think of culture as the fun part—from a kegerator, to shorts and sandals in the office, to ping pong and Frogger Classic on demand.

But culture is much more than having fun. It’s getting the right people on the startup team to accomplish what needs to be done, especially in the not-fun times, when the only way for the startup to survive is for the whole team hunker down and together drive through the hard times.

Culture Matters from Day 1

The most successful entrepreneurial cultures are based on transparency, trust, and tenacity.

There is no single culture that an entrepreneur can impose to ensure a high growth business with happy employees. We are all human, with different perspectives and experiences. Look for alignment on a small number of things. Our short list is transparency, trust, and tenacity, traits that are straightforward to express and will help build and run a business that everyone involved will be proud of at the end of the day.

Ethics—the moral principles that govern a person’s behavior—are the underpinning of trust and transparency. When in doubt, as yourself if the action or decision is:

  • Good for the customers?
  • Good for the company?
  • Good for you?

The answer to all three questions must be “yes.” This equation can fit both ethics and trust. As CEO, you empower any employee to do the right thing if they can answer all three of these affirmatively.

There is nothing, not one thing, that’s easy about launching a company. No matter how good an idea is or how talented the team, every inch is like you are going a mile uphill. The risk of failing is huge. It’s one of the single hardest things a person can do. If you don’t trust the people you are working with to do the right thing, to have your back, to stick with it when times get tough, the risk becomes insurmountable.

Create a startup culture where every single employee has the mindset and capacity to aggressively tackle every challenge as if it was the only one on the plate and then, once one challenge is completed, tackling the next thing with every bit as much ferocity. You want every employee waking up every day saying (and believing), “I can’t wait to take on the next challenge.

Engage the founding team in a deliberate exercise to hone in on core values.

Company culture flows from Company values, which flow from individual personal values and beliefs. This is never truer than in a startup where the team is small, and the company often is the entrepreneur. It’s doubly important not to wait until the company reaches 10 or 20 people, to ensure that the founding team is aligned and in agreement and that the company’s mission, vision, and values are stated clearly and publicly.

Every person connected with a startup has an impact on what the culture becomes.

It’s not just the people you hire as employees. It’s advisors, strategic partners, service professionals, customers, the company’s future board of directors, and of course, investors.

Every time you bring a new person on board, the third, the fifth, the fiftieth and beyond, the culture equation will change at least a little bit. The mission, vision, and values statement must remain top of mind to guard against hiring or partnering with someone who will go against the grain of the culture the startup is working to build. Ask yourself, could I envision working with this person over the long run? If you have the slightest doubt, pause and reset.

Having a culture of sales helps startups grow.

The more the company is keyed into the customer and to prioritizing that as a value, the more successful it will be. Build a company culture that is obsessed with the customer at every level and you will be building a company with high growth potential.

Get help from others to add aspects to your culture that you don’t personally have.

Don’t surround yourself with people who look and think like you. There is a business reason for inclusion. Racially diverse teams outperform non-diverse teams by 35 percent. Teams where men and women are equal earn 41 percent more revenue. Studies by Rosetta Stone show that bilingual employees earn 10 percent more revenue.

One of the great things about building a company from scratch is that as founder, you can create the culture you always wanted to have. It pays to be intentional at a very early stage. If you don’t care as CEO, how can you expect your team to care?

It’s hard to control humans and behavior. Culture can influence if not control. It’s another tool to help mitigate serious startup risk.

Ask us to tell you more about when we’ve learned in helping 100+ startups build cultures of their own.

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