Making your startup a great place to work

How Elon Musk brought a great company culture to Tesla

Elon has spent some time thinking about this

There’s so many debates online about what makes startups such a unique “industry” to work in, as opposed to working for an established and frequently super-corporate companies. For most, it’s the culture — the office game rooms, free snacks, casual wear. For others it’s about how the team operates, much like a tight-knit group of friends, or even a big family.

If you’ve worked in enough startups, you’ll know that no two cultures are the same. They’re influenced by the founders, the industry and the people that work there. You can have startups with bad cultures, the same way that you can find a company of over 2000 people with amazing cultures. The term “startup” has now become a euphemism for the ideological tech-focused company with a small team and an amazing culture.

But the thing that differentiates regular startups from this idealogical state that we call a real “Silicon Valley” startup is simple:

In a great startup, people are allowed to voice their ideas and opinions regardless of hierarchy — to be vocal about what they care about — and are encouraged to do so.

If you want to really understand why some companies have a better culture than others, have a look at Elon Musk’s recent letter to his employees at Tesla:

There are two schools of thought about how information should flow within companies. By far the most common way is chain of command, which means that you always flow communication through your manager. The problem with this approach is that, while it serves to enhance the power of the manager, it fails to serve the company.

Musk starts with a simple, bold statement: the way every company in the world is inherently structured doesn’t work for him. He’s spent enough time on each level of management to understand why they’re flawed, but he hasn’t let it get to him. He’s realised the failure of communication through hierarchy and says it like it is, no bullshit.

This is a strong start to the letter. Musk has taken everything that corporate-types have learnt from business school and explained in a sentence why it’s a bad idea. Passing bad news up and policies down pains everyone along the way, decisions are much slower to make and there’s a huge gap between the intention and execution of a project.

Instead of a problem getting solved quickly, where a person in one dept talks to a person in another dept and makes the right thing happen, people are forced to talk to their manager who talks to their manager who talks to the manager in the other dept who talks to someone on his team. Then the info has to flow back the other way again. This is incredibly dumb. Any manager who allows this to happen, let alone encourages it, will soon find themselves working at another company. No kidding.

I might as well just mic drop here and end the article. In traditional Musk fashion, Elon has found a way of boldly, yet politely structuring the sentence:

“If your hierarchy or policies slow down the speed at which my employees can innovate, I will fucking fire you.”

Musk understands the inanity of management-only communication. It’s incredibly rare for an executive or founder to take a stance on the side of the front-line and threaten the entirety of middle management. As you can gather from his career, Musk is about solving problems and he’s trying to make sure that as his companies scale, everyone working for him has the same drive.

Anyone at Tesla can and should email/talk to anyone else according to what they think is the fastest way to solve a problem for the benefit of the whole company. You can talk to your manager’s manager without his permission, you can talk directly to a VP in another dept, you can talk to me, you can talk to anyone without anyone else’s permission. Moreover, you should consider yourself obligated to do so until the right thing happens. The point here is not random chitchat, but rather ensuring that we execute ultra-fast and well. We obviously cannot compete with the big car companies in size, so we must do so with intelligence and agility.

I spent the last 3 months of 2015 working as an Product Design intern at Palantir in Palo Alto. While I learnt a lot about design philosophy, data visualisation and designing futuristic interfaces. However, the most important thing I learnt was to be passionately vocal about my philosophy on design and what I believe to be the most pressing issues.

However, coming back to Australia made me realise the difference between our two cultures. This concept is difficult for Australian companies to grasp as they don’t have this open, creative mindset yet. The social construct for Australian startups is still very reliant upon hierarchy, with comments like:

“If you’re not head of design, engineering or product then shut the fuck up and listen to your manager.”

While being vocal and passionate about your ideas will certainly help you get hired, it won’t help you keep a job here. Management of any age or experience don’t like being questioned. I’ve been at the mercy of this bullshit mentality many times, both before and after my brief time in the Valley.

Don’t get me wrong — hierarchy is good when you can look up to managers who are talented, experienced and passionate. But honestly, after my time in the Valley, I’ll always believe that if you have something to say, be loud.

One final point is that managers should work hard to ensure that they are not creating silos within the company that create an us vs. them mentality or impede communication in any way. This is unfortunately a natural tendency and needs to be actively fought. How can it possibly help Tesla for depts to erect barriers between themselves or see their success as relative within the company instead of collective? We are all in the same boat. Always view yourself as working for the good of the company and never your dept.

Finally, Musk points out a simple fact that differentiates his companies from many traditional companies and startups. The “team” at Tesla isn’t the department — it’s the company. Everyone that works for Tesla is a part of the bigger picture, not isolated departments that work against each other for the sake of KPIs and bigger budgets from higher up.

That is why we only have a handful of startups in Australia that are truly “Silicon Valley” style, like Atlassian. It’s not about the office lounges, snacks, relaxed workplace or meaningful work — those are just the fundamental benefits of working at a youthful workplace.

It’s because many Australian startup founders care more about being on top than they do about fostering a culture of knowledge and creativity.

Having a great workplace culture doesn’t require insane revenue streams from your SaaS product or raising from Sequoia, it’s about making sure everyone in the company can voice their opinions on things that matter to them and work hard for your company without being held back by self-imposed bureaucracy.

So maybe take a step back and ask yourself: what’s the worst that could happen if I let my employees talk about their ideas to me directly?