Should an early stage startup care about company culture?
In his best-selling book, The Hard Things about Hard Things, Ben Horowitz mentioned, that every company early on has two main objectives which are based on products and profits. You need to build something that is 10x better than any competition and do it fast enough to win the market.
Frankly, there is perhaps simply no capacity for you to even think about stuff like the culture at that point. The startup boneyard is full of companies with a world-class culture who failed to deliver on product or profit. Culture is for folks like Google, right?
Well, data shows that it’s not really true.
Kotter International examined 32 companies over a course of 11 years. Compared to companies with weak culture, strong culture ones had 410% more revenue, 780% more team size, 1217% higher valuation, 756% more income.
A stunning 12 times more valuation for caring about your culture.
The word culture is so widely used and in so many contexts, that no wonders most of the people think it’s something between free food in the office and a slack channel with cat videos (which are adorable, just look at this one).
Those things are a result of the culture that you have, not in any way what it is. But culture is so much more than that.
Culture is a mindset. It’s a system of values that people in the company act upon and use to make decisions. The second part of the sentence is the key. Culture is values that dictate decision making.
Culture is not formed at the moment when you finally sit down to come up with a doc “Our company culture”. It’s formed at the exact moment your company is born. And I’m not talking about legal registration or product launch. It’s born the second you decide to build it. Every decision you make, every conversation you have and every intonation you use — it all impacts your company culture.
You don’t want to launch a product because the design isn’t yet pixel perfect? Well, that says so much more about your company values than any hypothetical list you may come up with.
Do you refuse to do business with some big corporation, because they are in an unethical business? Guess what, you just signaled to everyone in your company what is considered good and what bad.
You swear too much (welcome to the club)? It helps to define your company culture.
An early stage company has a culture just like any late-stage one does. For a small startup, the culture comes down to people who started the whole thing. It’s their decisions and their reaction to other people’s decisions that form the culture.
By ignoring the culture and thinking you’ll figure it out later, it doesn’t go into the corner and wait for you to sort things out. It evolves. But it evolves sporadically, by itself, based on half-heard words and second-hand news.
People are the core of the company and founders should be vigilant in making everybody aligned around the same mindset. It actually makes a fucking difference for your business.
So, if your company culture would evolve anyway and, if set right, it actually helps your company, why wouldn’t you get proactive and stir and cherish it? Take your time, sit down and write that “Our company culture” doc, print it and put it on every wall you can find. Learn it by heart. But most importantly act on it.
Startups are hard and time-consuming. But you’re already in pain, so why would you minimize your chances of success ignoring the culture? Done right, it’ll be one of the best decisions you can make.
And lastly, consider this. You can probably still make it work even if you fuck the culture up. But is it worth spending all that hard work, if, when you eventually become a successful company, it’s so miserable that even you don’t want to work there?
