Understanding The Value of Startup Culture
Why do people usually like to work at startups? What is it that they do differently that sets them apart from the big conglomerates? Is it the hours? Is it flexibility? Well, there is not any specific way to define a company culture because each company has a different way of defining it. The culture it develops furthers itself to foster a better working environment and retain employees. Being an entrepreneur, forwarding such an environment comes with long-term advantages such as easier recruiting, longer employee retention, higher workforce motivation, and greater productivity.
So, before we dive deeper into the startup culture, let us talk about what is culture in itself. The culture of society boils down to values and interactions among everyone and everything. In the same way, work culture or company culture is about the shared company values and those who make it up, as well as the way they interact with each other. Workplace culture is mostly about the unspoken psychology of the company, what the company represents, and its relationships amongst its members. Work culture can be casual, fun, professional, not friendly, competitive, and much more. Startup culture is defined as a type of culture aimed at breaking down the barriers and hurdles of growth. Startup culture is mostly known for being creative, laid back instead of rigid, and passion-driven. There are 4 key factors that make up the ideal startup culture: Passion, Personality, Agility, Authenticity.
But how does their culture usually differ from that of big conglomerates? Corporates, startups, small businesses, and startups differ a lot in the way of doing work, their decision-making processes, size of the workforce which has influence over the culture of the business. Here you can see some of the differences
We are able to see that there are some drastic differences in cultures between startups and companies. But does it really provide value? Can it provide a path to employees looking for a different way to work to achieve their goals?
Value of Startup Culture
To help better explain the value of culture, we will start with an example of a real startup called ‘Simple Energy.’ Yoav Lurie, the founder raised $6 million in series B funding and grew his team from 20 to 60 people in a matter of months. While his burn rate increased, his revenue could not keep up and he found himself letting a lot of people go. Although they had a mission statement and vision, it was not clearly defined and as a result, the employees were misaligned. Yoav realized they expanded too quickly without defining the cultural values from the beginning. So the founders got together in 2015 and began redefining their core values based upon the original values on which they founded the business. In the end, they were able to avoid bankruptcy and surpassed their original revenue targets.
This shows how important it is to build good values at the start. But to build value, you need to know what you deem essential for success. It may be the values that guide your action in order to best serve the mission. If you do not know which values to focus on, reflect on your positive and negative experiences with workplace culture in past situations and list relative concepts and values. It is crucial to choose values that are actionable and resonate with your company. Values can be something that most people relate to and routinely act upon. Tell everyone what you value, why you value it and make sure you follow through by acting on it. In return, you will see people give back the favor. For example, the startup Auth0, the founder reinforces the culture of ‘innovation,’ ‘experimentation,’ and ‘learning’ which are considered the backbone of the company culture. They give their employees the autonomy to try new things, start new projects, and tell them to not be afraid to learn, all in the pursuit of learning and moving forward. This allowed their employees to work in ways that produced the best results.
Another aspect that will integrate employee culture with company culture is relationship building. Once your values are clearly defined, surround yourself with people who identify your values. Mentor them, learn from them and recognize them. Of course, now the big question is how to execute and actually create your culture that is highly valued?
Creating Your Startup Culture
Being a new startup, you will already have a ‘de facto’ company culture. It forms organically from the founders and the first hires. The founders’ personalities and philosophies will naturally be reflected in the business operations. With that being kept in mind here are some ways you can build a great startup culture
- Build on your strengths — Startup cultures are made for business founders. For example, if the founders are salespeople, the company will value sales first and foremost. The founders will know how to hire the best salespeople. Even for other positions, they will look out for people who are customer-oriented. The success stories spoken inside the company will be about things like the time a huge sale was made. Similarly, companies founded by designers will value design and technical founders will create a product and technology-focused companies. Basically, as a founder, you must understand this and build your company culture based on your strengths.
- Being transparent in your communications — You have to be transparent when communicating with your employees. They need to know if the company is growing, what type of effort will be rewarded, or if they will be a future career path for them. Keep an open channel of communication and get their feedback when necessary. Do regular one-on-one meetings, for example, 360-degree feedback, which focuses on providing observations based on various stakeholders, which are yourself (founder), the manager, and colleagues. This includes taking suggestions from investors and customers as well. Usually, it’s done anonymously but at a new startup that is not possible. At VenturX we have monthly review and feedback sessions where employees are gauged on their performance while giving back their own comments, suggestions on the work experience, and overall satisfaction. When it is still in the growth stage you should have a company-wide meeting where everyone’s accomplishments are showcased.
- Establish a set of values — Define your company values early on and talk about them. Think about what is important to your company. Team members can be made to sit down and ask what values they feel are related to your company. Give them time and resources to solve quality issues.
- Provide a pleasant work environment — Provide a room for serenity for your employees. This will help them boost their morale and productivity which will help them enjoy their time at work.
Now how do we ensure continuation when the company starts growing? Your company culture has to adapt to the changes that come with growth and scaling because startup culture is susceptible to change as your team grows.
Improving Your Startup Culture as You Grow
- Lead by example– Culture is set by leaders, maintained by employees, and monitored by Human Resources (HR). Reinforce value-based actions and a mission-driven culture by personifying the core values you set from the start. Doing so will encourage the same behavior in team members and build trust between employees and leadership.
- Recruit and hire carefully — Each individual you add to your team will play a part in your culture’s evolution. Hence it is important to hire them based on their cultural relevance. Find candidates who will mesh with your culture as well as bring more experiences and perspectives to your team.
- Recognize and reward employees — In addition to leading by example, reinforce positive behaviors by recognizing and rewarding your cultural catalysts. These are individuals who live out your core values and go the extra mile for your organization. Create employee spotlights and engage your HR department in employee recognition programs. For example, a good way to recognize an employee’s performance in these times is by appreciating them on social media. If you feel an employee has done something special, let the world know. This way your entire social media network will know and it will increase that person’s reach in the future. Do not forget to promote from within the organization. It fosters career growth and improves the efficiency of your recruitment process.
- Keep re-evaluating your culture — Startups are liable to change overnight as the business takes off, so regularly consider aspects of your culture like communication style and organizational structure. Flat hierarchies are customary at startups, but you may need to infuse more structure into your team in order to maintain a cohesive culture as you grow.
In 2020, the world was thrown into a whirlwind as we are facing an unprecedented pandemic where most startups and other companies were put into the remote working life. Most tech SaaS startups have tools to work remotely with G- Suit, Slack, and Zoom(Links to these resources are provided at the end of the article). These tools did exist before the pandemic but now have to be more optimized and structured considering everything is happening remotely.
Improving The Remote Working Experience
- Emphasize informal discussions — In the office, we had the opportunity to walk around and speak to our teammates every day in an informal setting. Find ways to recreate the physical atmosphere. Create opportunities to get together informally with small teams and get to know each other one on one. For example, at VenturX we have weekly informal meetings on Fridays with the marketing team to get to know each other a little better and talk about our day-to-day non-work-related happenings in our personal lives.
- Adjust hiring practices — It will be difficult to bring in a candidate into an interview, conduct it, show him the office, etc. Recruitment lunch and dinners are also a thing of the past. In addition to online interviews, each new employee gets a customized onboarding experience that includes one on one meetings with the executive team to provide a better feel of the company culture.
- Set expectations on communication methods — Set expectations on communication channels that are used for what topics really help set the tone and encourage communication. Example serious documentation can be done over email or cloud server, while casual discussions or team huddles can be done over Slack or Skype. Consider creating separate channels on slack or other chat tools for employees to talk to each other about conversations not related to work.
- Keep innovating and trying new approaches — Constantly try new things, experiment, fail, learn and succeed as a group. Focus on programs that make individuals more active in the community, where employees contribute their time and expertise in a variety of causes. However, you must ensure that the innovation brings about massive growth and an increase in workplace efficiency. If it does not bring a big change, it will not be very effective and will make the process redundant.
- Measure your remote team employee engagement — Set times to create a quarterly survey, monthly email status update from every team member, or something such as employee pulse surveys that help you measure the team sentiments at any time. After work-related communication, make conversation that generates general happiness and moods that encourage openness.
This picture represents the 5 levels of remote work. You can use it as a benchmark to help decide where your company is and how long it will take to reach the highest level.
Level 1 — No Deliberate Action — Nothing deliberate has been done by the company to support remote work.
Level 2 — Recreating the Office, Online — Think unnecessary meetings, interruptions, and real-time communications, except it is now online.
Level 3 — Adapting to the Medium —Using shared documents and charts as well as better equipment to harness remote work.
Level 4 — Asynchronous Communication — A rewarding culture embodied by shared values and time to focus and create.
Level 5 — Nirvana — A culture that works better than any in-person company ever could.
Some tools to better manage remote teams are
We have seen how we can develop a startup culture to create an environment where we feel a sense of connectedness, a reflection of a founding team’s personality and their passions. It is a positive environment that values creative problem solving, open communication, and flat hierarchy. With the introduction of remote working, startups have to push their boundaries of creativity on how they can leverage creating a new culture that satisfies everyone and sees growth in the future.
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VenturX is a web platform that helps entrepreneurs through their journey from idea to launch and beyond. VenturX uses data-driven analytics to score and connect startups and investors at Seed and Series A financing.