Why Startups Should Put Culture First
Forget first-mover, algorithms and capital. Culture is a far more sustainable (and harder to copy) advantage that will leave your competitors in the dust.
All job ads hark on about “great culture”. This makes sense - you’re unlikely to attract top talent if you present yourself as a festival of blandness. But how many new businesses truly embrace and invest in culture as one of their core competitive advantages? Few startups truly focus on culture before they get to 10-20 people, but the history books are lined with successful startups that did, like Zappos, Salesforce and Atlassian,
If you are a startup yourself, would you include culture as one of your main competitive advantages? If you’re a VC - would you specifically look for this when vetting a company?
Why culture is most important early on
Truly great cultures are unique, impossible to copy and attractive to the right kind of people. But, like fashion, the more people that become involved in a trend, the more it loses its potency.
Cultures change as teams grow because functions become more diverse, and it becomes harder and harder to recruit exact fits. If you don’t focus on establishing your culture early on, this change can become a full-scale dilution of everything that got you through the day in the early months of your business.
We’ve demonstrated this below, with bears representing team members who match the team culture.
Potency of a strong culture
Your culture will shift as you grow of course...and change is not only inevitable, but good to an extent. We recently wrapped up a fundraise on the basis that our greatest competitive advantage was our culture. Bonjoro is our 4th product as a team, and only our 2nd successful one. But getting out of bed has never been hard, because we’ve built a culture where we keep trying again and again until we get it right.
Potency of a weak culture
This happens all the time, and is one the primary reasons that previously untouchable companies collapse.
One of the primary affectors of this is how fast you grow, especially when combined with a lack of "Cultural awareness". It explains why so much emphasis is placed on succession planning - would the founding Nokia team have turned away smartphones or embraced them? It seems unlikely. But when you replace your bears with a mismatched collection of squids, cows and tigers, your company eventually becomes generic. It’s the difference between Jean Paul Gaultier’s iconic Madonna cone bra and his many imitators.
If you get it right at the start, you can maintain a distinctive culture forever while still giving your company the chance to mature and diversify.
We’ve built a culture that hangs out after work, on weekends, and keeps going because we’re a family and we’re all in it together. We’ve built a culture where we’re approached weekly by people who want to work with us (often customers!) and attracting talent is easy. It’s our ambition to be the Madonna cone bra of the business world.
But wait! Why have you invested so much energy in this intangible thing? How do I turn my culture into dollars, or other globally traded currencies?
Great culture births great product
For small teams, innovation is a synonym for survival. You have to try doing things in a different way to be able to compete with the dominant players. You move fast, you iterate, or you die. The easiest way to guarantee a steady stream of new (and sometimes good) ideas is to have team members talk to each other and be unafraid to express themselves. This is only possible in a trusting, close-knit environment.
When you can keep this as a core attitude for as long as possible great things happen as you grow and the Googles of the world are born.
Culture helps you hire
Startups and new businesses generally can’t offer wages to compete with Facebook, major banks or faceless conglomerates, so they need an extremely compelling offer to hire the best and brightest. These days, you can’t even fall back on startup staples such as autonomy, equity, fun. Dozens of small companies offer all these things and you’re competing against them too.
We’ve been “lucky” to never have an issue with hiring. But when you dig deeper, luck has nothing to do with it. You’ll find us hanging out at events in bear suits, going out for beers as a team, and having fun in public whenever we can.
Great culture helps you grow & fundraise
Great cultures are addictive, distinctive, and generate word of mouth. This is great for sales, customer service and PR. When your whole team speaks with a single voice you know that every customer touchpoint will be the best it can be.
Its also great for fundraising. The second thing I do with any investor (after a first pitch) is get them to come for lunch / beer with our team. When we do this, we close. Simple to us, but I haven’t met another team that takes investors out pre-close.
So....How do you create a strong culture?
We're not experts, but here's our advice.
1. Be personally mindful of it every day. With 1 million things going on, culture is usually left to “fend for itself”, treated as secondary to operations, product, funding etc. Over time, this results in a bland workplace and dissatisfied employees.However to get a culture to work the founding teams needs to actively to keep it at the front of their mind each and every day. Treat it with the importance it deserves and include cultural fit as a metric in every decision making process you do. You’ll be rewarded with loyalty, enthusiasm and cohesion.
2. Show new team members how it’s done. Make sure new every new team member is integrated into the wider team. Our team is split between London & Sydney, so we are incredibly focused on making sure every hire gets to know everyone else through Skype, Slack and, of course, video messages. Then we fly them out for beers ASAP!
3. Don’t fixate on where you started. All small businesses have to grow, and their cultures have to grow with them. The early days may be special, but trying to hold on to them can cause problems in the present and upset the achievements that come with scale. The trick is to retain your core values while remaining flexible enough to prosper.