How to Build A Startup Culture That Everybody Wants
All startups are in a daily competition to attract top talent. Building a strong startup culture is one of the easiest ways for startups to differentiate themselves and win-over top talent.
What is Startup Culture?
Every business has a culture. An offshoot of Silicon Valley culture, startup culture prizes ownership, transparency, growth, and ownership. Startups are about disruption and revolution: they’re about changing the way a market currently solves a problem. A strong culture informs employees of what is expected of them, courts the best and most motivated employees, and builds the foundation for a long-term, successful enterprise.
Traditional Startup Culture
In recent years, successful startup cultures have experienced an evolution. Rather than being singularly mindful and driven, such as the early days of Apple, they are now embracing failure and work-life balance. Employees have begun to reject the traditional tenets of startup culture, which often had employees working long hours and numerous days in pursuit of perfection.
Instead, startup cultures are now taking notes from giants like Google, encouraging both innovation and failure, and allowing employees to experiment. Modern startups have many employee-based amenities and ensure that their employees are inspired and motivated. At the same time, startups use their culture to make sure that their employees remain engaged and invested, and that their employees are continually working to produce ideas and technology.
Startup cultures encompass the company’s relationship not only with their employees, but also their vendors, customers, and even products and services. A startup is often seen as a cutting-edge, maverick company: a company that is willing to try out unique and risky propositions for the greater good. In terms of customer care and product development, startup culture may be customized to suit the business.
Not all startups are alike, and not all startups buy into the traditional ideas of Silicon Valley culture. Instead, startups tailor their culture to their mission statement and their values, and they make it clear what their business is about. This is one reason why mission statements and values statements have become an important component of the modern business.
A company’s culture may evolve over time, but what is most important is that a company understand its culture in-depth, and enforces its culture at all times. A strong company culture is what ties the company’s employees together, creating the company’s brand and identity, and driving the company onward toward success even as it scales upwards. A company with a weak culture will have uncertain employees who may not necessarily know what is expected of them.
There are many examples of different company cultures that a business can pattern itself against, but ultimately the company’s culture is often going to be informed by its higher-level executives and employees.
Why Culture is so Important to Startups
Culture is incredibly important to startups. Oftentimes startups don’t have the resources and capital to compete with larger corporations to attract top talent. With that said, it is important to offer intangibles (and equity) to attract top talent. In addition to being able to attract top talent, establishing a strong culture from the early days will help build in all aspects of building your business as you continue to grow and hire.
As we mentioned, establishing a strong startup culture is a surefire way to compete for top talent. Early stage startups generally can’t compete with pure salary compensation but can offer intangible benefits that can sway an individual to join your organization. To learn more about how to hire for you startup, check out our guide here.
Outside of hiring new employees, culture is incredibly important in other aspects of your business as well.
Generally speaking, it is more cost effective to retain an employee than hire a new one. Startups usually do not have the resources (or time) to recruit and train a new employee. With that said retention is vital to success. An easy way to make sure companies retain their top talent is by offering a culture that gives them the intangible benefits they want. No longer are the days of ping pong tables and sparkling water.
Going hand-in-hand with retention is the ability to keep employees happy. If employees are being given the intangibles they want and believe in what they are working towards chances are they will be happy. And a happy employee is someone that will stick around and only strengthen your company culture further.
A strong culture will create buy in from individuals across the organization. As most startup leaders know, building a startup is full of ups and downs. Having buy in from the earliest employees is essential during the downs to keep everyone motivated and focused on the vision.
Who Owns Culture Building at Startups
When growing your headcount at a startup, everyone plays a role in building the startup culture. Oftentimes the top sets the tone and leaders across the organization help implement and build the culture.
Founder(s) and CEO
Generally a startup begins with a small headcount of founding members and leaders. They are usually the subject experts or most qualified in their respective department. It is on these founders and leaders to set the tone for the culture of the entire organization. As startups begin or continue to hire it is vital that the leaders lead by example. For example, if you want a culture of transparency and open communication then it is important that the leaders and founders practice transparency and open communication.
As the team at First Round Review puts it, “Companies tend to reflect everything about them [founders]— their personality, strengths, weaknesses. So when you start defining culture in an intentional way, first look at yourselves. If you’re not a founder, look at your CEO and the people who were there at the very beginning.”
The First Round team goes on to say, “If a founder is competitive, the company will be more aggressive and competitive. If they are analytical and data-driven, the company will tend to make metrics-based decisions. On the other hand, if a founder deliberates too long over decisions, their startup may have a hard time moving as fast as it should. If a founder is a designer, the way the company builds products will likely be led by design.”
Usually when a startup has less than 10 employees the culture can be fairly rudimentary. It may be based off of how the founders/leaders work and have a few core ideas. Once a startup gets to the point where they can hire a HR leader or team, culture may be elevated to a new level. An HR leader can come in and dissect what is or is not working about the current culture and put the playbook in place to hire individuals that fit the culture. As the team at BambooHR puts it, “One of the roles of HR in a startup is to make sure the company lives up to its values by hiring people that align with the company’s vision.”
As we previously alluded to the leaders of each business department are the role models for culture. Once you grow your headcount to a point where founders are no longer working with every individual, it is on the leaders and managers to practice the values and be the role model for those working on their team.
Startup culture generally starts at the top. Even if a startup’s vision and values are not written on paper, the earliest team members are likely practicing them day in and day out. Learn how you can formalize your startup culture below.
5 Steps to Build A Desirable Startup Culture
As we mentioned previously, a startup culture usually starts with the founders and what they bring to the table when a company starts. As the team at First Round wrote, “80% of your company’s culture will be defined by its core leaders.”
Questions for Leaders
While it can feel burdensome to take the time to formalize your culture in the early days, there are a few easy steps you can make to get things headed in the right direction. As we mentioned earlier, if a founder wants a culture of transparency they have to practice it themselves. In the early days, there are things that founders are implementing and practicing if they realize it or not. As a founder, you can ask yourself questions and it will give you a basic outlook of your “culture” (or how you work as a leader). Ask yourself things like:
- What am I good at?
- What are my weaknesses?
- How do I work?
- What characteristics do I look for in co-workers?
- What qualities do I dislike about co-workers? etc.
Once you answer these questions, your culture will start to take shape. Common characteristics will start to appear and you will have the basis for your “company culture.”
Define the Vision Statement
Once you are ready to start formalizing the questions above you can start with the vision. As the team at HubSpot describes it, “A vision statement describes where the company aspires to be upon achieving its mission. This statement reveals the “where” of a business.” This is the overarching goal of where you want your business to end up. While it should revel “where” you want to take the business it also plays into “why” you exist.
In a slightly varying definition, the team at Matter describes a vision statement as, “A vision statement explains why a company exists at a high-level. It is aspirational, inspirational, motivational, future-looking and coincides with the founder’s vision for a better world. The very word, “vision” has everything to do with seeing; and vision statements have everything to do with how the founder sees the company evolving and impacting the world.”
Define the Mission Statement
If the vision statement is where you want to go, the mission statement is how you will get there. As the team at Entrepreneur defines it, “Every successful startup has a clear goal or vision as to what they want to accomplish. While cynics would say that the ultimate mission of any business is making money, the most successful startups generally have a larger sense of purpose. And the best way to express that aspiration is with a well-written mission statement that establishes your company’s core values and highlight its goals, no matter what niche you might be working in.”
A mission statement is your roadmap for achieving your vision. This is at the core of a startup’s culture and should be looked to often as you set goals and product roadmaps for the future.
Define the Core Values
At the end of the day, core values are the DNA of your startup culture. They act as a guiding principles for you how you and your team work. As the team at Wired writes, ” Choose values that are actionable and resonate with your company. If you identify your startup culture with values related to being bold but you know that isn’t important to your success or appropriate for your business, perhaps you should take a closer look at what makes your company tick. Values aren’t something that you have to put in writing for public display, that style isn’t for every startup. However, values should be something that most people can relate to and routinely act upon.”
Values should be the acting principles of how your team works. If you think back to the original questions a founder should ask themselves, the values and principles will likely be clear. As you continue to bring on new employees look back at your values to see if they’re still being practiced.
Practice What You Preach
No matter what you put down on paper if you are not practicing what you preach a culture will cease to exist. For a startup culture to last, it is vital that the leaders are practicing the values and working towards the mission and vision each and everyday. If times get tough and the leaders abandon the company culture, chances are everyone else in the organization will as well. Remember what the First Round team said in the fact that, “80% of your company’s culture will be defined by its core leaders.” If you practice what you preach, building culture throughout your organization will come naturally.
How to Maintain Culture While Growing
Writing your mission, vision, and values is a small part of the battle. In order to best build a startup culture you need to actively maintain it and make sure it is being practiced across the organization. Here are a few ways to make sure you are maintaining culture while growing your headcount.
Hire for Culture
When bringing on new employees it is important to test if they are a cultural fit. If you have your values written, it should be fairly easy to test if an employee is a fit for your team. You can have multiple team members interview candidates to get their read on a potential candidates fit as well. Make it clear during the interview process what your company values and what mission and vision you are working towards. This should set the tone and expectations for if they do join your team.
Tweak & Re-evaluate
Even if you do a great job hiring for culture, chances are your company culture will continue to evolve. It is natural! Take the time to look back at your culture every few months and just see if things are changing. Don’t feel like it is something you need to update immediately but keep tabs on to discuss with your team and leaders.
A surefire way to see if your building and maintaining your culture is by surveying your team members. Something as simple as a prompt to measure their happiness level at work can do the trick. If something feels off or you are getting negative feedback about the culture — it may be time to make some changes and see what you can be doing differently.
At the end of the day, it is up to the leaders to set the tone for the company culture. If they continue to practice what they preach and hire for culture, maintaining culture should be easier across the board.
5 Great Company Culture Examples
It’s not always easy to intuit what a company culture is. Taking a look at some company culture examples can help, both in terms of what to do and what not to do. Here are some company culture examples to consider:
Lyft vs. Uber Culture
Early on in development, Uber established a problematic company culture, with team culture activities that often involved alcohol. Uber experienced numerous complaints and scandals during its growth, due to this problematic company culture.
By contrast, Lyft was able to establish a company culture of responsibility and safety. It experienced far fewer complaints and scandals, and garnered a better reputation in the industry.
Of course, in terms of market share, Uber eclipsed Lyft. But it has experienced significant and lasting damage to its reputation over time. Company culture isn’t everything to a business, but it is a lot. Neither Uber nor Lyft have been able to achieve profitability within their market.
When considering office culture ideas, looking at cultural goals examples can help. Many companies pattern themselves after the companies that they find most successful and inspiring. Consider these examples of company culture statements, from the largest companies in the world:
This outline’s Google’s philosophy: customers first, do one thing well, and don’t be evil. Google has long-believed in serving the customer before everything else, as well as focusing on a singular thing at a time.
Apple is committed to bringing “the best user experience to its customers through its innovative hardware, software, and services.” Apple sees itself as being a world leader in technology, bringing customers the best user experience possible.
Microsoft seeks “to empower every person and every organization on the planet to achieve more.” In recent years, Microsoft has been focusing on behind-the-scenes technologies such as their Azure Services, as well as collaborative and communicative products like Office 365 and MS Teams.
As you can see, these cultural statements are brief and impactful. While the actual mission statement, company culture, and guidelines may be more in-depth, the company culture needs to be able to be explained in a simple, succinct way.
Of course, these are also some of the largest companies in the world. But they all started out as startups, and their cultures have remained largely unchanged since then. Google started out with the mission of “don’t be evil.” Apple started out providing useful technology with superb interfaces. Similarly, Microsoft has always been user-focused when developing its products.
It’s often said that an expert or a professional is an individual who is able to explain complex concepts in simple terms. Similarly, a business that really knows its identity will be able to describe its identity within a single sentence. This single sentence should resonate strongly with both employees and customers.
Being able to simplify a company culture is critical, because a company culture has to be simple in order to be followed. An overly convoluted or complex company culture will be impossible to maintain for any business, and will lead to more confusion than is necessary.
And then there are the companies that have a more traditional corporate culture. As an example, many have stated that they are dissatisfied with Amazon’s corporate culture in recent years, which puts a performance-driven environment first.
Amazon’s culture emphasizes an “outstanding, continuously-improving customer experience,” which has reportedly led to burn out and fatigue in many of its employees. An emphasis on “relentless focus” has led Amazon to be successful, but also the target of a number of high profile labor complaints.
What's it like Working for a Startup?
Working for a startup is often a cross between passion and a calling. People work in startups not to make the most money, but rather to be a part of something that they feel really matters. Working for a startup salary is often demanding and requires an employee to wear many hats, but there’s the hope that an employee may get in on the ground floor of something special: the next Google or Microsoft.
What Talent Wants
Consequently, an employee wants to feel as though they are valued, and they want flexibility and perks. Well, employees do value things like a ping pong table and snacks in the office, it can often be boiled down to 4 things that modern talent wants in the workplace: ownership, transparency, growth, and collaboration.
There are two types of ownership for a startup employee, the type that shows up on a cap table and the type that stems from having an opportunity to lead new projects, products, and processes within a company.
Employees want to know how their business is performing and how they will impact the business. At the end of the day they are asking themselves — Are the executives of the company being open and honest about the prospects of the business as well as our current performance? Does the company have systems in place to communicate that performance and give every team and person insight into how their contribution is affecting the growth of the business?
Let’s face it, no matter how amazing the culture at your company is, people often take jobs because of what it will mean for them personally. That means everyone that joins your company is doing so because they feel it is the best thing for them to be doing right now so that they can continue on the career path they have visualized for themselves. The difficulty is keeping people engaged enough to continue feeling this way.
The desire among companies to remain lean along with the uncertainty of what may transpire each week within an emerging business has given rise to the full-stack operator. People with a diverse skill-set (and, again, intellectual curiosity) will quickly form opinions on how the company outside of their specific role is being run and will want to make a contribution.
Startups necessarily must be more flexible than traditional companies because they are already asking so much of their employees. A startup is going to ask their employees to work for them far beyond the traditional work week, while also continuously giving their all. Most startups are fairly lean on funding, and consequently they need to be able to reward solid performance in creative ways.
Many startups use things such as corporate catering, health plans, on-site childcare, and other quality of life benefits to keep their most talented staff. But it has to be understood that those who are interested in working for startups do know that they’re going to be working for less: they need to believe in the business itself. As long as they believe that the business is going to be successful, disruptive, and innovative, they are likely to remain onboard. Much of this has to do with the culture.
Why Should Someone Pick Your Company?
Most people who work for a startup have already considered the working for a startup pros and cons. Ultimately, there are two major reasons people decide to work for a startup:
- The soft benefits are fantastic.
- The future opportunities are great.
An employee may forego a significant salary if they feel that the startup’s soft benefits compensate for the loss of income. If an employee needs flexible time, so they can spend time with their children, or if an employee likes to go on lengthy vacations but still gets their work done, a startup may be the right environment for them.
But one of the major benefits of working for a startup relates to future opportunity. Employees often want to buy into a business: they want shares of the business, or they want to be able to have upward mobility within the business. In the tech center, many employees come from businesses that paid them well, but there was no light at the end of the tunnel.
And many employees really want to feel like they’re making a difference in the world. They want to feel as though the work they do is appreciated and matters.
Working for a startup vs big company means that the big company funding isn’t there, but that the startup can be more flexible in terms of the employee’s own goals and desires. A startup can court better talent by providing opportunities for growth, working around the needs of the employees, and putting an emphasis on quality of life.