Scaling startup culture

It’s part of startup lore these days — “Don’t fuck up the culture,” said Peter Thiel to the Airbnb founders.

No kidding.

What he doesn’t say is that it’s a lot harder than it looks — that culture is an organically growing monstrosity that is not naturally disposed to take directions from anyone. It grows and changes as the people in the organization grow and change, and as the influx of new hires leave their own mark.

I’m sure any startup that has gone through multiple stages of growth has its own story to share. Here’s my take on a moment in TransferWise’s story, about the growth-driven challenges that arise and the importance of taking the time to be deliberate about culture.

Startup culture at TransferWise

Two years ago, I started at TransferWise, a company less than 10x the size of my previous company. All of a sudden, it was like jumping into a cool swimming pool on a sweltering day. Relief.

It’s often hard for those who haven’t made the jump to fully imagine the autonomy. So many big, impactful projects and not enough people to do them. No complicated approvals or buy-in processes that take months. No one making land grabs or fighting for ownership. Since joining TransferWise, I have seen in myself that I have never grown so much or so fast. I don’t wait for permission or promotions to expand the scope of my responsibility. Instead, it’s simply a matter of taking the initiative, whether that’s launching a feature, leading a team, or even moving to pick up new area. It’s an incredibly empowering feeling.

And that’s startup culture — it’s what has attracted so many to tech startups and has invigorated everyone working in that environment to punch above their weight. It’s about making the right decisions for the customers, unhindered by political interests up and down a chain of command. It’s a sense of ownership and the corollary ability to move fast, without red tape.

The key to all of this is trust — trust in the individuals and teams across the organization to make the right decisions and to deliver. And I’m not talking about superficial decisions, I mean the meaningful stuff like defining the big strategic priorities, setting KPIs, deciding whether and who to hire, and how much to spend on marketing, all without a centralized approval process.

Within TransferWise, we’ve seen this culture manifest itself as an incredible energy both for the customer and for TransferWise, and holds true from our very first office in London to our newest office in Budapest. And moreover, we’ve seen that when people are trusted with the autonomy, they honor that trust by taking the associated responsibility very seriously.

As many startups discover, this concept works well when the company is small and trust is absolute — but can it scale as the company grows? Since I joined TransferWise in early 2015, we have more than doubled our headcount, now over 600 strong. Inevitably, trust does decline over time as the number of offices grow and people no longer know each other by face and name.

Over the course of the past year, we spent a lot of time struggling with the question of scaling the culture — brainstorming, experimenting, convincing, cajoling this culture engine to change its course ever so slightly. Because fundamentally, I believe it IS possible to preserve the best parts of startup culture while also making it more resilient to growth.

It kept coming back to feedback.

About this time last year, TransferWise struggled with a few questions that were probably very common for any company at the same stage of growth, but that did not have easy solutions when coupled with the desire to maintain trust and autonomy across the organization. To give a sampling:

  • How do we set budgets to reach company-wide financial targets?
  • How can we measure and compare team impact when each team is going after their own goals and KPIs?
  • How do we encourage teams to assess their impact honestly and be comfortable with pivoting or dissolving altogether so that they can make a bigger impact in other areas?
  • How do we build a long-term plan for the company when teams are individually focused on the short-term day-to-day?

At first glance, the challenges seemed quite diverse with unique solutions required for each. But as I puzzled over each, for every “what if” thrown into the mix, it kept coming back to feedback. Setting budgets? Feedback. Assessing team impact? Not necessary if there’s feedback. Encouraging teams to pivot or to think longer term? You guessed it, feedback.

These days, feedback is a term often thrown around, but let me take a moment to define what I mean by it. The feedback delivered to the teams needs to be in-depth, genuine, and considerate, without any ulterior motive beyond seeing the team succeed to the best of its capabilities. That type of feedback can be quite tricky to achieve, but with the right environment, it can be nurtured.

For one, the act of giving feedback should be open for everyone in the organization, no matter the seniority. And those who step forward to give feedback should be deeply respected across the organization for doing so. In typical organizations, giving feedback is generally reserved for line managers who aim to make sure their teams stay on track. But a well-functioning feedback culture doesn’t need to be so limited — valuable insight can come from anywhere, and moreover, simply knowing that more voices are represented builds trust across the organization that decisions are made with full consideration of the overall context.

On the flip side, the receivers of the feedback should have the full right to decide whether or not to take any particular point of feedback on, without recrimination or ill will. Ultimately, the decision must sit with the team in order to preserve ownership and because they know their customers the best. Feedback givers also know to keep the quality of their feedback high. When the two sides are combined, it creates an environment where feedback is valued deeply by both givers and receivers. And it’s that kind of feedback environment that allows trust to scale.

Playing it out

To give an example, let’s take a look at the budget question, one of the thorniest on the list above. Budgets are very important to the survival of the business — financial responsibility results in more flexibility and independence as a company moves forward. At the same time, budgets have one critical implication on startup culture: it limits resources. In a world with limited resources, teams with more resources are able to deliver more impact. Teams start to lose focus on delivering their immediate customer goals in the effort to get more resources.

But if we all agree that the company, over time, needs a budget, how do we also maintain decentralized decision making? It’s possible with feedback.

Imagine a scenario where each team has the autonomy to make their own ask for resources (money or people). Further imagine that the sum of each team’s ask is greater in total than TransferWise’s overall budget. With an honest feedback culture, it becomes a dialogue rather than a directive. The Finance team shares broadly the importance of financial responsibility, giving teams the critical context they need to make informed decisions. The teams bake the overall company benefits into their individual plans, and participate in a cycle or two of very direct feedback from across the company. “How much impact do you anticipate the new engineering hire to have?” “How does the customer impact of that project compare to the negative impact of financial irresponsibility?” “How do you know?”

If, after the feedback, the sum of resources required is still too large, then we should actually be questioning whether and how the financial goals can be adjusted. If we really do have such big, actionable projects, then the return should justify the investment.

At TransferWise, we experienced this challenge and that is exactly how it played out. Feedback enabled trust to scale because it’s an open forum that transparently exposes how decisions are made within teams, and enabled everyone to challenge the decisions made. Obviously not everyone takes the time to challenge every decision, but so long as people believe in the process that ensures decisions at the company are made responsibly, then trust is preserved. Even cross-company topics like budget can be determined from the bottom up.

We still have a lot of room for improvement as we continue to evolve — so far, the utility and continuity of feedback around the organization varies a lot. And that’s exactly the point, this will be a constantly improving process. Startup culture at scale is possible, but so long as the company continues to grow and evolve, then so must culture be stewarded so it too can do the same.