The Power of Core Values
During a session at Startup Grind on Tuesday, our board member and investor Nabeel Hyatt and I discussed the early days of Postmates. Part of our discussion was around when to listen or ignore the advice of others. I explained that we often ignored the advice of VC’s (in this case the industry at large) to ignore our gross margins and only focus on delivery volume. The topic appears to have garnered a lot of attention and I have received a lot of positive feedback. While we discussed a very specific case I do believe that it is important to be able to make decisions that are contrary to the popular opinion.
I thought it would be helpful to share some insights into a tool that I find essential when it comes to making decisions: Core Values.
Building a company is often a balance between short term decision making and long term strategic thinking. Using our core values as a long term guidance, especially when it comes to short term decisions, has worked remarkably well for us.
At Postmates we define our core values with a set of three values. What we stand for, who we are and who we will never be.
Postmates stands for Infrastructure, Choice and Immediacy
We’re building highly connected local networks of merchants, Postmates and customers. As a result we’re unlocking more and more local inventory to be available instantly.
Postmates is Utilitarian, Humane and Eccentric
Postmates is designed for use rather than beauty. We’re supporting local merchants and drive income to local communities while being free to deviate from the status quo.
Postmates will never be Faceless, Contrived or Pretentious
We’re trying not to be characterless or dull, we’re avoiding things that are deliberately created and that feel fake rather than arising naturally and we do our best to not attempt to impress by affecting a greater importance than we possess.
They are hard to argue with once they are part of your company’s culture.
Core values are powerful because they serve as reminder to everyone inside the company. They are hard to argue with once they are part of your company’s culture and will help you form an ideology that will ultimately find its way through every part of your organization and to your customers.
The first thing core values do is guide us through all of our hiring decisions. They either attract people that share and embrace them or deter those that do not align with them.
Product decisions are guided by our values too. An example I come back to regularly was one of our earliest decisions, that at the time many people considered insane. Instead of building Postmates around a subset of say 100 merchants that wanted to partner with us we allowed customers to request a delivery from anywhere in their city. The most common feedback we received was that this would not scale and it would not be possible to build a business delivering anything from anywhere.
Your core values are most important when they are challenged, in this case we knew our core value of choice was more important. Scaling Postmates with the anything anywhere capability has probably been an order of magnitude more difficult but it set us up to do the easier things faster and more efficiently.
When it came time for us to build our Postmates Plus product, which relies on partnering with local merchants, we were able to quickly scale these relationships. The merchants were already familiar with Postmates. They understood the value proposition not from faith in a deal but because of the real incremental sales we were already driving to them.
…needing only a shoestring sized team selling the merchants into the program.
How did doing the hard thing we valued first pay off? We went from a company with zero merchant relationships to a company with over 3,000 merchant partners, needing only a shoestring sized team selling the merchants into the program.
In retrospect, it is obvious that without this decision Postmates would likely not have had the same success we see today. We would be a small food delivery company, not one that is challenging big incumbents with a totally new approach to scaling a business. The belief in our core values allowed us to opt for a long term strategic decision rather than the short term optimization.
The earlier you define your company’s core values the sooner you can lean on them when it is most important. Regardless of the method you use to define yours, you need to be brutally honest about what you really value and stand for. Waiting too long to define your values or not being diligent about what you stand for leaves you open to the risk of wasting time and not being able to be decisive.
Finding product market fit, finding the right people, managing your product and team — as you scale — will be harder if you don’t have a strong alignment on what the company and its employees value.
Thanks to Sean Plaice, James Butts, April Conyers and Jeremy Sypniewski for their contributions.