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Global Mentors: When Should Founders Focus on Company Culture?

By May 16, 2019Resources
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3 Day Startup has run 500+ startup programs around the world and we’ve worked with a lot of brilliant people in the process.

Maia Donohue (Moderator)

Senior Program Manager, 3 Day Startup

Austin, TX

We’ve seen a lot of high profile startups suffer serious troubles that can be traced back to poor company culture. Whether it’s Theranos or Fyre Festival, or startups with a frat house culture, many startups have run into problems due to toxic culture.

When and how should startup founders focus on their company culture? How can a founder be deliberate about culture? And what is your definition of culture?

Top 5 takeaways

  1. Culture must be an early emphasis for founders.
  2. Culture must be intentional. Founders must be aware that their decisions and actions are setting their company culture from the beginning.
  3. Bad behavior and unethical decisions will define a startup’s culture, and eventually catch up with a company.
  4. While the CEO is the most influential in creating culture, cofounders and early hires will also have an impact.
  5. Startups have influencers within the company. Certain team members, (whether they are hires or cofounders) will have a bigger influence than others.

Madeline Vu

Director of Product Design, Capsule

New York City

Founders should focus on their culture from day one. Boiling it down, culture simply means how a group of people work together and the habits they pick up. As a founding team, setting this tone creates the bedrock for how new hires will operate as you scale.

The startups that you’re speaking of (Fyre, Theranos) had deeper issues and I believe the output of what you’re describing as ‘bad’ culture is an effect of those deeper issues.

Issam Ourrai

Startup Mentor, Senior Consultant, Groupama

Paris, France

Myths are a great way to transmit the culture – what are the stories about great events (or notorious situations gone bad) that are told?

And you want to have a feeling of belonging for all the team, that they belong to the venture and they are in the right place where they’ll work and evolve.

Katie Fang  

Founder & CEO, SchooLinks

Austin, TX

I didn’t care about culture at all at first, but now it’s biting me in the ass. At first, I didn’t know the difference between culture and environment, so I thought culture was just ping pong tables and foosball.

We’ve learned that taking responsibility and ownership really matters for my company. We had to fire a bunch of people because they were too afraid to admit any failure, and they weren’t taking ownership. They were worried about, “what if I f##k up?”

Now, every week, we have a session where everyone has to talk about one thing they’ve succeeded at, and two things they’ve messed up. We’re trying to introduce a culture of fearlessness.

Micah Yost

Investor, Entrepreneur, Founder of Populus Coworking

Omaha, Nebraska

I have this little equation I use to explain culture: (E + N)i

E= Shared Experiences – culture is built around shared experiences. Few things build connection, community, trust, and common goals like a shared, intentional experience.

N= Norms – culture is built on the the things your company accepts as normal. Know the values you want to share and then be sure your norms support it. If you want an honest company, is it normal for people to be truly honest and transparent in meetings?

i = Influencers – Not everyone is equal in a company when it comes to influence. No matter the size, there will always be a small number of people with outsized influence over the others.

So, it’s shared experiences plus norms all multiplied by the key influencers. This equals culture.

Vi Nguyen

CEO & Cofounder, Homads

Austin, TX

I think startup culture has a lot to do with the founder’s values. It’s easier to build the right team if the founding team aligns in values. I don’t think that startup culture is something you think about later. It can be a really toxic aspect of the startup, especially with small teams.

One of the best ways that I’ve been able to filter for people who align is asking, “what are your 5 year personal and career goals?” This allows me to understand their motivations and what they value. We only bring on the team members where my company, Homads, can help support them attain their goals.

Paul Devlin

Venture Capitalist, Mercia Fund

Edinburgh, Scotland

In my experience, when startups are at an early stage (<6 people?) and everyone is an equity holding founder, the culture is implicit, and set by the founders.

It’s once things start to get beyond the CEO interviewing every new person that culture can be diluted, because the team weren’t even aware it was there until it was gone.

My favourite book on culture was “the way we do things round here” by Edgar Schein in the mid 80’s.

David Daeschler

Entrepreneur, CEO of SlideWave

San Antonio, Texas

Culture starts at the top. Even the smallest companies of 2-3 people feel something about the “why” of what they’re doing. I think it is important to dig into the reasons that go beyond money and into what the founders are really trying to bring into the world.

The why and the structures supporting it drives the culture. If the why is weak, the culture tends to be less cohesive. Have a strong mission, have a strong why, write them down, and make them part of what every employee and C-level member sees from the beginning in their employment packet and all over daily materials.

Mikel Berger

Partner, Little Engine Ventures

Lafayette, Indiana

Regarding culture: Main thing I would add is we’ve had to explain some of the things that don’t happen around our company to contribute to culture. Like some of the perks we don’t have. We don’t have a ton of ping pong tables, we don’t have a laundry service, etc.

Those kinds of perks that some think contribute to a positive culture are more often negatives. They are traps so that you never have to leave work to get involved in your local community. So you just spend all your time working.

We’d rather just pay people well and trust them to be smart to figure out how to do all that other stuff on their own. I think people actually enjoy that more than a ping pong table in the office, but it doesn’t look as impressive when you take the office tour on your interview.