Season 1 - Episode 9 : Building Your Startup Team Culture
We thought we could be like NetFlix. Or at least, we wanted to be one of the most disruptive businesses out there. We wanted to build a winning culture, when really what we needed to do was build a culture around how we wanted to work. It was a painful learning moment. Avoid our mistakes, and learn how to build a great startup from day one in this episode.
Background Story
Culture! It’s kind of a big deal. And we sucked at it - at least, at first. We thought we could copy and paste another company’s culture - in this case, Netflix - and make it our own. Sure, we picked up a few things we liked, but it wasn’t us, and it was a disaster. We had our culture failure; we lost our early staff because our culture sucked. There was a distinct lack of mission or values, and frankly, we just didn’t like working in a Netflix style environment. We learned a lot of lessons for round 2.
Outline
Wait, what exactly happened?
Culture comes first.
You don’t actually want a big team.
Busted Myth
Myth: Your culture will develop naturally. Nope, this is a deliberate effort
Myth: Culture is something you can get to later. Absolutely not. This will definitely increase the odds you’ll fail. Culture first!
Myth: Big teams are better. Dude/ dudette - they are solidly not. Try making a PowerPoint deck with two people versus six. It’s mayhem.
Learnings
Background:
We didn't know anything about culture. We weren't super confident about our management abilities either. Decided to copy a culture. Bad call. The Netflix "Culture" powerpoint deck had (at the time) crazy ideas - come to work whenever, no formal clothing, unlimited vacation, etc.
We tried it and it went south quick. People couldn't handle it, we didn't understand it. Our two employees at the time were gone within six months. Culture failure.
You can't transplant another company's culture to yours wholesale. You can borrow ideas, but culture needs to come from how co-founders actually work.
Culture comes first.
The Queen's University Centre for Business Venturing (QUCBV) at the Smith School of Business in Kingston Ontario also found some remarkable results in their studies of culture. Over a 10 year study, QUCBV found a 65% greater share-price increase for public companies, 26% less employee turnover, 100% more unsolicited employment applications (that’s wild), 20% less absenteeism, 15% greater employee productivity, 30% greater customer satisfaction levels. Holy cow. Folks - culture matters big time. Investing in your culture is one of the best bets you can make.
Other studies show a causal relationship between culture and customer satisfaction and between culture and sales.
Culture, then people. If you hire a bunch of people at once, it will be way harder to manage. There are no small bets with HR stuff, particularly hiring and firing.
You don’t want a big team.
It's a myth that you want a big team. Small teams are totally legitimate and an indicator of a different and probably profitable startup.
Hire "mini" versions of you at first. Steadily add people to take on the stuff on which you don't want to focus.
Focus on your company mission - which was for us “helping make people safer”. We blew this on the first go-around in that we didn't give staff a sense for what we were about.
Don't forget about team diversity. We actively looked for folks from various cultural, ethnic, and gender groups, as we viewed the diversity of our business as a true competitive advantage in the market. The reality is that the more diversity you have in people, the more diversity of opinion you’ll have in your creative processes. If you only hire from Ivy League schools, you’re going to get the same ideas again and again; different backgrounds provide different and sometimes better ideas.
Summary
Culture goes straight to the bottom line.
Have culture, then people.
Focus on how you work when building your culture.