Startups are increasingly emphasizing company culture as a selling point when recruiting top talent.
Where did Silicon Valley's obsession with culture come from?
Perhaps it stems from the first leaked photograph of Google's colorful headquarters, or the often critiqued idealism of Millennials wanting "more than a job."
Either way, today's startups have to facilitate, foster, and create a company culture to attract and retain team members.
Unfortunately, for many founders, the term company culture has become nothing more than a buzzword. It's something that is often talked about, but rarely executed to perfection. One of the reasons is a lack of understanding as to just how significant a role culture can play in a startup's ultimate success or failure.
3 Reasons Tech Startups Need to Create a Strong Company Culture
The Importance of Culture
Understandably, it can be difficult for founders, who are hyper-focused on rapid growth, to grasp how much a positive company culture can influence nearly every aspect of a company. Amidst a seemingly never-ending to-do list, it's easy to put such a self-reflective task on the back burner.
No one understands the temptation to avoid nurturing culture better than Razor Suleman, founder of Achievers (which sold to Blackhawk Networks for $110 million in 2015). Last May, the RocketSpace alum stopped by our San Francisco tech campus to discuss how his own culture failure later became the catalyst for a new venture focused on employee engagement. To watch the full presentation: Click Here.
Suleman eventually realized the same thing authors Frances Frei and Anne Morriss advocate in this Harvard Business Review excerpt:
Culture guides discretionary behavior and it picks up where the employee handbook leaves off. Culture tells us how to respond to an unprecedented service request. It tells us whether to risk telling our bosses about our new ideas, and whether to surface or hide problems. Employees make hundreds of decisions on their own every day, and culture is our guide. Culture tells us what to do when the CEO isn’t in the room, which is of course most of the time.
For the remainder of this article, we'll discuss why and how founders should be guiding their startup company cultures from day one. But, before we begin, let's make sure we are on the same page.
What Is Company Culture?
In the world of academia, culture is described as: " A pattern of basic assumptions and beliefs; the learned behaviors, shared values, and norms that define the work in an organization."
Startup cultures work similarly to geographical cultures. Both have their own stories, attire, behavioral norms, ceremonies, and symbols. And both have their own beliefs that inform such tangible representations.
Thus, building a company culture begins with defining your core values:
- What type of impact do you want to make in the world?
- What qualities do you consider most important in the people you work with?
- What type of customers do you most want to serve?
Once a company has defined their core values, they can begin translating those to every aspect of the business: Attracting (and retaining) talent, fostering more productive team members, enhancing consumer relations, and more. Let's dive into the benefits of cultivating company culture in more detail.
Looking to build your company, and culture, in Silicon Valley? Get the Silicon Valley Startup Guide to find out more about the best events, meet-ups, coworking spaces, and more.
The 3 Reasons Culture Matters
1. Attract Talent
Recent reports show that interest in tech is growing, and the appeal to land a job in Silicon Valley is stronger than ever. With that said, you don't want just anyone to work for your startup: You want the best of the best. For instance, software engineers and developers are some of the most in-demand candidates in today’s tech job market, and for good reason. The people charged with building, implementing, and road-mapping the actual technology behind a product can make or break a startup.
When you're running a small team, every new hire will effectively change your company, for better or worse. A poor fit can bring everyone down, while a strong one can boost morale, enhance productivity, and incite innovation. Additionally, your earliest employees may manage a diverse array of responsibilities, ranging from customer success to SEO optimization to sales. Thus, it's important to only hire individuals who match your core values.
You can integrate culture into the hiring process by:
- Infusing your job titles and description with language that reflects your culture.
- Defining and documenting your startup's core values on your company website.
- Asking questions that help you really get to know candidates during the interview process.
However, make no mistake about it, hiring is a two-way street. The people you choose to work with must also choose you (every day)! Which is why having an awesome company culture is an integral part of attracting and retaining talent. Who doesn't want to work in a fun, yet challenging environment?
2. Retain Talent
Like it or not, you are often competing with the Googles, Facebooks, and Apples of the world for talent. That goes for both hiring and retention. While many individuals are attracted to the initial excitement of working for a startup, that enthusiasm doesn't always last.
Clashes over personalities, stressful workloads, and poor leadership are all felt more strongly within smaller companies. Falter on your commitment to maintaining a positive culture, and your office environment can quickly go south. With a low number of team members, the ripple effect of someone leaving can be supremely stressful.
Rent The Runway experienced this first hand. Within ten months, the online fashion service lost seven top executives. Former staff members even created a Facebook group to share their experiences of a culture gone awry.
Conversely, one tech company who seems to have mastered culture is Airbnb. The home rental marketplace's core values of entrepreneurship, adventure, and home are infused into every aspect of the employee experience — from the benefits (that include regular travel stipends) to the workplace design (which boasts “landing zones” instead of dedicated desks). Prioritize your employees' happiness, and they will often reward you with both increased productivity and profits.
3. Enhance Productivity and Boost Community
Startups are notorious for their long hours. With limited manpower, things like working beyond immediate job descriptions, and efficiently managing the clock, are expected — not applauded.
With that said, people are infinitely more productive when they like their jobs. Focusing on tasks from clock-in to clock-out with no socialization, or relaxation, is a recipe for disaster. However, if a founder is feeling exceedingly pressured to produce more results, they will often translate that message to team members without realizing it. Once a founder begins to neglect culture, it isn't long before everyone else will follow.
Employees who love the companies they work for can't help but translate that enthusiasm to their fellow employees, customers, and potential hires. When you invest in company culture, your employees become your biggest ambassadors; whether they are taking calls with prospects or putting in that extra 10 percent behind the scenes.
Additionally, creating a shared company culture, and sense of community, will facilitate open communication channels that breed new insights. You simply never know where that next great idea will come from!
Continually Maintain Company Culture
Though thinking about culture in the midst of VC pitches, product development, and customer acquisition may seem like an inconvenience, it's actually a wise investment.
As your startup grows, and you take on more employees, it becomes even more important to continually check in with the community you are creating:
- Are employees happy?
- Could you be translating your values into the workplace in new and exciting ways?
You may want to conduct a biannual review of your values, culture, and work environment. Involve the entire team and ask them what is working, what needs improvement, and what they would like to see updated.
One of the most challenging aspects of managing culture as a startup founder is work environment. With a small budget, founders often struggle to provide the kind of flexible, modern decor their team members would prefer.
Coworking in an office environment specifically designed for tech startups. At RocketSpace we provide startups with modern furnishings, flexible lease options, and a variety of amenities that make life easier. Our members also enjoy:
- Introductions to corporate partnership, mentors, and VCs,
- Ongoing special events and educational workshops
- A selective coworking environment with vetted coworkers
Want to try RocketSpace out for yourself? Get a free day pass and see if our tech campus is a fit for your startup.