How to Build Startup Culture
Lessons and advice from 20+ founders on how to hire a team and build a positive culture
“Culture eats strategy for breakfast” is a phrase famously attributed to Peter Drucker. For one of the world’s foremost strategy gurus, this is a stunning statement. Drucker implies that instilling the right traits and behaviors in the company’s culture will determine success over a well-thought-out strategy.
“A lot of building a company is building culture. You spend a ton of time with the people who you work with. Building culture is the most important thing you can do. You want to work with people that you’re happy working with, rather than just being there and getting the job done.” — Dr. Jayanth Gummaraju, CEO of Banyan Security
When we interviewed founders in our portfolio, they repeatedly emphasized the importance of hiring the right people, building a positive culture, and supporting a stellar team. Culture can sometimes be pushed to the back burner as founders deal with more urgent issues. “Many times, entrepreneurs tend to focus on the product-market fit and prioritize business aspects,” says Dr. Kamakshi Sivaramakrishnan, Venture Partner at Tsingyuan and Founder of Drawbridge. “But I would absolutely spend as much time on culture: it’s how a team operates and how it deals with failures and successes.” Building culture is a long-term investment in the startup’s growth and ability to attract and retain top employees.
Here are the learnings that founders in our portfolio shared about building culture.
1. Make your startup mission and vision concrete and clear
“Societal culture” is defined by the norms and values that mold social interactions and behavior. Similarly, startup culture is governed by shared core values. “Everyone needs to understand the purpose and the vision,” says Ed King, CEO of Openprise.
Defining the startup’s purpose means communicating why it exists, why it’s necessary right now, and what the mission and long-term vision is. Dr. Hong Tang, Tsingyuan Venture Partner, advises creating a clear and ambitious mission: “Instead of saying ‘we want to build a product and these are the attributes,’ you want to say: here is the end purpose. You want to have something really simple, so that people can easily remember it and feel proud.”
“Create a culture where everyone knows explicitly what your company’s principles are and how to behave in a way that upholds them,” says Phoebe Yao, CEO of Pareto, who credits a Stanford class she took with Scott Sandell called Principled Entrepreneurial Decisions.
2. Hire people aligned with your core values and principles
After defining the vision, founders should carefully look to hire people with aligning values. “When I evaluate anyone, whether for hiring or for a co-founder, the first thing I look for is character. I ask myself: what are the values of this person, what drives them, and how do they treat other people?” says Sarah Daniels, CEO of Blue Canoe Learning. “If I were in a tough situation, would this be one of the people I want on my close team? Particularly in a startup, there are going to be some ups and downs and changes. Character doesn’t change.”
What are the values of this person, what drives them, and how do they treat other people?
“The right kind of people are passionate about what they’re doing and excited about being part of the culture that we are building,” says Dr. Jayanth Gummaraju. Culture provides a framework for how team members treat each other and do business in a way that aligns with the startup’s principles.
Hiring team-members who are aligned with the culture will also strengthen it. “Maintaining a positive culture can only be achieved through building a team of people who share our vision and mission. The team should feel that they are also a part of the foundation of the company and that they are as important to the company as the founders are, because we’re a team,” says Dr. Kiana Aran, CSO of Cardea Bio.
The ultimate goal, in the words of Akilesh Bapu, CEO of DeepScribe, is to create a self-sustaining culture of motivation. He describes a successful startup culture: “People truly care about the product and care about other people in the company. You care about the vision, so it doesn’t matter if it’s 1 AM, you can go on Slack and see a bunch of green lights and indicators next to everyone. […] You can get the team working without having to set strict deadlines. Everyone’s fired up chasing the same thing. And that leads to hitting your goals and blowing it out of the water.”
People truly care about the product and care about other people in the company.
3. Maintain transparent and open frameworks to build trust and respect
Integrity, honesty, and openness are key to building a transparent culture and building trust. Team members should seldom be surprised, because they should understand how decisions are being made and “be part of making those decisions,” says Sarah Daniels. “Leadership is about trust and mutual respect. It’s about laying out a framework for how we make decisions, and being as transparent as possible with that.”
Leadership is about trust and mutual respect. It’s about laying out a framework for how we make decisions, and being as transparent as possible.
Implementing a consistent and transparent framework helps team members understand how to approach problems and interact with each other and customers. “From the very beginning, I helped create a framework for how we make decisions, what work we do, and how we approach that work. It’s been very consistent. […] If you know that’s your priority, there are a lot of problems you already know the answer to,” Daniels says.
To create a culture for innovation, Dr. Hong Tang says it’s critical to “motivate everyone to contribute. […] You want to make them feel that they are the owner of their job. So you need to start with openness and transparency; everything you do and say needs to be honest and straight. You won’t be afraid if a certain decision being leaked out will be perceived as unfair or biased or self serving. You want to maintain transparency.”
Transparency and honesty is often integrated into a company’s values as a foundation for effective teamwork. “As a small company, you need people in many different functions — from engineering, sales, marketing, finance, etc — to work in harmony,” says Dr. Changming Liu, CEO of Stellar Cyber. “You can’t work in silos without supporting each other. Openness is important: we need to share almost everything in the company, good and bad. We have to learn and correct from what isn’t going well.”
You can’t work in silos without supporting each other.
Dr. Liu credits the book Principles by Ray Dalio as helping him learn that “you have to be very open to employees, to investors and to partners and customers.” He has regular meetings and writes weekly reports to his employees and company. “You have to feel responsible for [them] and take care of the people.”
“Startups are mainly about the people, not only about the technology. People develop technology, build products, and sell products. The technology is secondary. People are the number one factor in whether you have a successful company or not.” — Dr. Changming Liu, CEO of Banyan Security
“It’s always worth it just to be frank. You don’t have to be rude, but you want to be open so that everyone knows exactly where you’re coming from so there are no surprises. I think people will respect you at the end of the day because there’s nothing hidden. If you want to run an organization, especially a small organization, everyone has to know what you’re thinking. Communication and being sensitive to your teammates is very important,” says Dr. Joe Choi, COO of Hypercare.
Be clear when communicating knowledge in a team, and support each other through transparent and trusting interactions.
4. Foster and encourage diverse perspectives
Multiple startup founders emphasized the importance of diversity, in both background and perspective. Diversity is “not only in race, religion, and gender, but also in diversity of opinions. Everyone we’ve hired comes from very different backgrounds around the world with very different opinions,” says Dr. Jayanth Gummaraju. “Diversity really enriches the culture. We can all come together for a common mission […] That becomes a very energizing experience, as opposed to treating culture separate from the company.”
“We don’t want to have too many of the same type of person in a room. We really want to try to find diversity and people with different points of view,” adds Jonathan Tan, CEO of Coreshell Technologies, who argues that diversity can help propel the startup forward. “We need lots of different voices and some points of tension in order for the company to grow.”
We don’t want to have too many of the same type of person in a room.
Diversity in background and expertise can play a key role in creating a healthy culture. Dr. Kiana Aran says: “It’s important to build a team with a variety of expertise and a diverse culture. […] There is always something to learn, either technical or cultural, which makes the work environment a fun and rewarding place to work at. We call ourselves Cardeans, we empower each other, we learn alongside each other, and we grow together.”
“The technology is 5–10% of what we are trying to build. The team and the people on the team are the real asset.” — Dr. Kiana Aran, CSO of Cardea Bio
5. Look for people who are self-motivated, strong learners, and have low ego
Beyond hiring people who align with company values, several other themes for building culture and hiring the right people stood out: find people who are self-driven, adapt and grow quickly, and are low in ego.
5.1 Self-driven to identify and solve problems
Finding people who are self-driven and take initiative on their own can be a huge asset in the early chaos of founding a startup. “There’s no shortage of smart people in the valley,” says Dr. Hui Tian, CEO of AxBio. ‘The number one thing we’re looking for is someone who is self-motivated. A self-driven person can actually initiate and run a project. It doesn’t matter if you’re an engineer or a manager. You should be able to find a problem and solve it yourself, instead of waiting for orders from the top.”
You should be able to find a problem and solve it yourself, instead of waiting for orders from the top.
“We hire people that basically don’t need to be managed. If you need us to sit on your shoulder, we probably hired the wrong person. We really try to hire people who are independent, comfortable operating without constant supervision, and embody the five values we care about,” says Ed King.
Dr. Changming Liu reiterates this point: “Especially for startups, we want to hire people who are self-driven and self motivated. They want things to be done, not just to listen to orders from managers. They have a desire to excel. It’s very important to commit yourself and take ownership. Sometimes people working for big companies may have a different mentality because all of the procedures, resources and tools are already in place. Startups are different because a lot has to be built from scratch. You can learn a lot by working in the trench and growing with the company.
5.2 Scrappy learner who can adapt to change
Being able to quickly grow in a role with limited resources and guidance is important. “With a startup, by definition, no one’s done it before,” says Dr. Charlie Silver, CEO of Mission Bio. “But we want to find people who are nimble and agile, who can learn from everything they’ve done, and very quickly apply it here. They can quickly learn what’s working, what’s not working, and how to iterate from there. We want to find people who not only know their experience, but know what they don’t know and how they can fill in their gaps.”
They can quickly learn what’s working, what’s not working, and how to iterate from there.
Phoebe Yao agrees that it can be challenging to understand a potential hire’s rate of growth: “You’re looking for someone who is not only an effective team player in the present, but who is also going to be able to grow into the person and leader you need them to be. The growth can happen in as little as three months.”
“We’re going to have challenges and will need skill sets we didn’t expect. If someone has the raw intelligence and attitude to embrace that change and learn something new, they’re going to be the most valuable person around,” says Sarah Daniels.
As Daniels describes, being a quick learner sometimes boils down to attitude and curiosity. “I want people to be super curious and to love discovery. They ask: why did that happen? […] Even after they go home, they think about things in the background and ask hard questions. Why did it happen that way? Did I do the right experiment in order to make a conclusion about what I’m seeing? Curiosity is really just constant challenge and review,” says Dr. Pamela Contag, CEO of BioEclipse.
I want people to be super curious and to love discovery. They ask: why did that happen?
Similarly, Dr. Lisha Li looks for curiosity when hiring. “Intellectually curious people are always building and trying to learn in their outside extracurricular life. […] Curiosity shows that you’re always interested in growing yourself.” The best team-members should feel that they are able to grow and learn alongside the company.
5.3 Low ego
Surprisingly, ego came up often in regards to building positive culture. There are several plausible explanations: those with large egos tend to be difficult team-members to collaborate with, are less open to discussion, are less self-aware, and don’t focus as intently on the customer and user experience.
Team-members need to work together in an open environment and shouldn’t be afraid of being wrong. “I look for people who are very open to new ideas and discussion. Their ego doesn’t get in the way. Especially when you’re at a startup, it’s important that you can bring up new ideas without the worry that someone will push down that idea or argue with you,” says Dr. Robert Devlin, CEO of Metalenz. “They need to be able to step back. They don’t need to be right, they just want to get the problem right. In order to have something grow beyond yourself, that’s critical.”
Dr. Lisha Li also points to low ego as a key trait she looks for. “People who are low in ego are very good listeners and willing to be critical in a constructive way. They’re okay giving their opinions constructively and being receptive to feedback,” she says. “In an early-stage startup, there are so many things that are chaotic that if you lose the ability to be transparent and to get feedback even from within, then you’re going to have even more trouble from outside. I think the low ego part is trying to encompass all of those characteristics.”
People who are low in ego are very good listeners and willing to be critical in a constructive way.
5.3.a How to counter large egos
Although several founders advise against hiring those with high egos, there are also tactics to mitigate the negative impact of ego. Founders shared that through seeking to make data-based decisions, they can lessen the importance of personal opinions.
Sarah Daniels says: “If we build feature X, but the data says it’s not working, it’s not about an ego that says: oh, I still believe that feature is great. There’s no ego involved. We have to say: that hypothesis didn’t work quite right, let’s ask ourselves why, and then we’ll come together with ideas about how we can change and improve it.”
There’s no ego involved.
This process of seeking answers and validating assumptions can be uncomfortable. “One of our key pillars of culture is that we’re driven by data-based decisions. That’s related to discomfort, because we look for answers outside of the company,” says Jonathan Tan. “It can be really uncomfortable to take something deeply personal and go out and ask people: is this fundamentally game-changing? Do you think it’s going to work? But we try to do that with every aspect of our company.”
Through validating opinions and assumptions with data whenever possible, ego can stay out of the way.
6. Aspire to a culture of listening, empathy, and collaboration
Listening is a way of communicating that someone else’s idea is valuable and worth consideration. As Dr. Devlin states above, being unafraid of stating your ideas is critical in the early stages of a startup. “Things break down when people aren’t hearing each other, or when what they’re “hearing” is not actually what’s being communicated. I try to make sure I’m listening a little more than I speak,” says Dr. Gabriel Sanchez, CEO of EnSpectra Health.
Things break down when people aren’t hearing each other, or when what they’re “hearing” is not actually what’s being communicated.
While working as an instructor in the Stanford Bioengineering department, Dr. Sanchez learned that a lot of teaching is actually listening. As CEO, he’s learned to “listen very carefully […] to indicate where specifically someone is struggling” and to “put himself in their perspective and empathize.”
“You always want to be sensitive to where your team is. As a leader, you have an objective to achieve. […] But you should also be very sensitive to where the rest of the team is at and what they’re thinking,” says Dr. Joe Choi. Phoebe Yao extends this point of communication and listening to remote teams, where “effective communication across cultural barriers and time zones is especially important.”
Having empathy helps team-members look from a user’s perspective and build what customers actually need. Having a customer-first attitude, in the words of Dr. Jayanth Gummaraju, means being “focused on our customers and on making sure they’re happy.”
“Lots of people like building cool products, but if you don’t take care of customers, you may build a cool product and no one will buy it. You have to build a product that people really like,” says Dr. Changming Liu.
You have to build a product that people really like.
Listening and empathy also fosters collaboration within the company. “You want to encourage collaboration. That’s easier said than done. You need to set up the internal processes to make sure that collaboration is rewarded. It’s easy to say: okay, we want to have collaboration in our culture. But the rules are set up in a way where there is some kind of zero-sum game. If I win, you lose. That would naturally lead people to not want to collaborate with each other. You need the culture to be respectful and empathetic to others,” says Dr. Hong Tang.
“If you have a bunch of great engineers but they’re not team players, it’s not going to work,” says Dr. Maryam Ziaei, CEO of iSono Health. Employees need to “have integrity, be respectful, and be trustworthy,”
Conclusion
Startup founders should stay flexible and adapt the advice they hear about culture to their unique needs and stage. Dr. Hong Tang emphasizes: “There’s no single ‘best model’ for a company culture. It can differ for companies with different sizes, in different industries. It can even be different for the same company at different stages.” He gives an important reminder to take advice with a grain of salt and to keep an open mind.
Although successful culture can look vastly different across startups, Sarah Daniels succinctly summarizes what any founder can aspire to: “One of the things I’m most proud of is that people like to be on my team. They learn things, they advance their careers, they feel respected, and they have a sense of purpose and success. That brings out the best in people.”
Ultimately, the goal of working to build a positive startup culture and of hiring the right team is quite simple: to bring out the best in people.
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Tsingyuan Ventures is a $100M seed-stage technology firm. We back technical founders across software, life sciences, and frontier technologies. Learn more about our origin story and our approach here.
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