Culture by design or by default?
Cultures creative crucible
Introduction
Startup culture, often hailed as the lifeblood of new ventures, encapsulates the beliefs, behaviors, and norms that dictate how a startup’s team interacts and functions. Whether intentionally crafted or accidentally evolved, this culture plays a monumental role in a company’s trajectory. Distinctly different from established corporations, startups possess the agility and dynamism to either intentionally design their culture or inadvertently let it manifest. The latter can sometimes lead to unforeseen challenges. Understanding this distinction is pivotal for anyone diving into the startup ecosystem, whether as a founder, employee, or investor.
Roots of Startup Culture
In the Silicon Valley of the 1980s, companies like Apple, with Steve Jobs urging employees to “think different”, laid down the foundation of what we now perceive as startup culture. Jobs didn’t just want engineers; he wanted artists, rebels, and forward-thinkers. These early startups, fueled by passion and vision rather than just profits, set the tone for the next generations.
Startups, by nature, swim against the tide. They arise from gaps in markets, often challenging industry titans. This inherent rebelliousness shapes their culture. However, not all rebels are constructive. Theranos, for instance, led by Elizabeth Holmes, was praised for its culture of secrecy and ambition. Yet, beneath the surface, this very culture led to one of the largest frauds in Silicon Valley history.
“Culture eats strategy for breakfast.” — Peter Drucker
A startup can have a groundbreaking product, but without the right culture, it can crumble.
Challenges for startups are plenty — limited resources, constant uncertainty, and the ever-looming threat of failure. Yet, these very challenges often become advantages. A lean team means fewer bureaucratic layers, fostering a culture of rapid decision-making. Uncertainty pushes a startup to be innovative, keeping the culture vibrant and agile.
However, it’s worth noting that not every startup’s culture should or will mirror that of Silicon Valley. Different regions and industries birth their unique flavors of cultures. For instance, while a tech startup in San Francisco might embrace a 24/7 hustle mentality, a social enterprise in Nairobi could prioritize community impact and local partnerships.
Intentional Startup Culture
Crafting a deliberate culture requires both vision and action. Google, in its nascent stages, didn’t accidentally stumble upon a culture of innovation and openness.
Larry Page and Sergey Brin intentionally fostered an environment where engineers could spend 20% of their time on personal projects, leading to the birth of Gmail and Google News.
Proactive Steps
Startups that succeed in designing their culture prioritize it from day one. They establish clear values, mission statements, and codes of conduct.
Airbnb, for example, took the unusual step of having its founders interview the first 500 employees to ensure a culture fit, emphasizing their mission of ‘belonging.’
Hiring with Culture in Mind
The significance of hiring for culture cannot be overstated.
Netflix’s famed “Keeper Test” has managers ask themselves which of their team members they would fight to keep, promoting a culture of excellence.
While hiring for skills is tangible, hiring for mindset and values determines the longevity and cohesion of the team.
Orientation and Continuous Learning
A well-thought-out onboarding process doesn’t just teach tasks but immerses new hires in the company’s culture.
Companies like Zappos even offer new hires money to quit after the initial training, ensuring that only those truly aligned with the culture stay.
Leadership Role in Culture Shaping
Leaders are the torchbearers of culture.
Elon Musk’s relentless pursuit of innovation and sustainability at Tesla serves as a beacon for his employees. Conversely, Adam Neumann’s unchecked ambition and eccentricity at WeWork amplified a culture of excess, leading to its near-collapse.
Benefits of Designing the Culture
A strong, intentional culture offers numerous advantages. Motivated teams work with passion, often going the extra mile. A well-defined culture also crafts a distinct brand identity, making marketing and PR efforts more genuine. Moreover, in the ongoing talent war, a vibrant culture is a magnet for top-tier talent and ensures their retention.
However, critics argue that an overemphasis on culture-fit can stifle diversity and breed conformity. While alignment with core values is essential, startups should be wary of creating echo chambers where only similar voices are heard.
Accidental Startup Culture
Not every startup strategically designs its culture. Some cultures just “happen,” emerging from the habits, personalities, and decisions of early team members. While this organic growth can sometimes lead to a robust culture, often it can veer off track, with unintended consequences.
Unplanned Formation
Accidental cultures are often formed when there’s a void of conscious cultural decisions.
Yahoo, in its heyday, struggled with its identity. Was it a tech company? A media entity? This lack of clear vision, combined with frequent leadership changes, led to a confused and fractured culture, which many argue played a role in its decline.
Influence from a Few Individuals
In smaller startups, especially, the habits and behaviors of a handful of individuals can disproportionately influence the culture.
For instance, the early days of Uber were marked by the aggressive and combative style of its co-founder, Travis Kalanick. This led to a culture that, while growth-focused, became synonymous with numerous controversies.
Absence of Mission Clarity
A startup without a clear mission is like a ship without a compass.
BlackBerry, a pioneer in smartphones, lost its market leadership, partly due to an organizational culture that lacked clarity and adaptability in the face of rapidly changing technological landscapes.
Responses to Unforeseen Challenges
How a startup responds to challenges can inadvertently shape its culture.
Kodak, despite inventing the digital camera, clung to its film business. The culture of complacency and resistance to change paved the way for its downfall.
Potential Pitfalls
Accidental cultures are rife with dangers. Misaligned teams can pull in different directions, leading to inefficiencies. The brand’s messaging can become inconsistent, causing confusion among customers. Moreover, instead of proactive strategy formulation, startups might find themselves perpetually in a reactive “fire-fighting” mode.
“The culture is what it is, not what you hope it to be.” — Ben Horowitz
An accidental culture might serve a startup well initially, but as it scales, the cracks often start to show. It’s the long game that counts, and a haphazard culture might not be sustainable.
Unseen Effects of Unplanned Startup Cultures
On the surface, an accidental startup culture might seem benign or even advantageous, fostering spontaneity and organic relationships. However, the hidden consequences of such an approach can be profound, affecting various facets of a startup’s functioning and perception.
Team’s Mental Health
A chaotic culture without clear values or guidelines can lead to burnout, stress, and anxiety among team members.
Consider the case of the now-defunct Telltale Games. Amidst rapid expansion and game launches, the company’s “crunch culture” — long hours with no clear direction — took a mental toll on its employees, eventually contributing to its downfall.
Growth Hurdles
A misaligned culture can stifle innovation and adaptability, two cornerstones for a startup’s growth.
Blockbuster, in contrast to Netflix, held onto a brick-and-mortar mindset, impeded by an internal culture resistant to digital transformation. This hesitance played a part in its eventual bankruptcy.
Perception by Investors & Clients
Investors don’t just invest in ideas; they invest in teams and the cultures they embody.
“Young companies can be defined by their first 30 employees.” — Bill Gurley
When Fyre Festival, a music event backed by a well-hyped startup, disastrously fell apart, its unplanned and ostentatious culture became a cautionary tale for both investors and customers.
Unpopular as it might be to admit, startups don’t just run on innovation or product excellence. The unseen infrastructure, their culture, often determines whether they stand the test of time or crumble under pressure. An unplanned culture might seem like a minor oversight, but its ripple effects can make or break a fledgling company.
Real-world Startup Examples
Analyzing real-world cases provides a more tangible understanding of the impact of culture, whether by design or default. Here are two startups, one lauded for its intentional culture and the other, a cautionary tale of culture gone awry.
Positive Culture Design
Spotify Founded in 2006, Spotify is often held up as a paragon for cultivating a successful startup culture. Guided by values like innovation, collaboration, and transparency, Spotify pioneered the ‘squad’ model — small cross-functional teams with the autonomy to make decisions. This structure nurtures a sense of ownership and rapid innovation. Founder Daniel Ek’s philosophy was clear-
“We aim to make mistakes faster than anyone else.”
Instead of fearing failure, Spotify’s culture celebrates it as a learning opportunity, a stark contrast to many startups that operate in fear.
Accidental Culture Missteps
Zenefits Once a Silicon Valley darling, Zenefits’ meteoric rise was matched only by its sudden fall. In trying to disrupt the insurance industry with its software, the company overlooked the importance of compliance and regulatory adherence. Its culture, driven by aggressive sales targets and an unchecked “bro culture”, made headlines for the wrong reasons. From unlicensed brokers selling insurance to a lack of internal controls, Zenefits’ cultural issues weren’t just internal — they had external regulatory repercussions.
Conclusion
Startups often chase the allure of rapid growth, technological advancements, or market disruption. Yet, as the tales of companies like Zenefits and Telltale Games reveal, overlooking the significance of a conscious culture can lead to dire consequences. Conversely, companies like Spotify thrive, not just because of innovation, but due to a culture that supports and nurtures that innovation. To truly flourish, startups must view culture not as a byproduct but as a critical foundation.
Written by: Inchara, kubo media team.
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