How Startup Culture Can Make or Break Your Success

Startup culture starts at the very beginning of your startup’s creation before it’s even a company. Startup culture equates to the values and work processes you have in the workplace.

Even if you are a team of two founders, it’s important to get things right from the start.

23% of startups fail, in part, because they claim they had the wrong team, according to a study by CB Insights.

Man, that’s rough!

Take a moment to step back and think of that statistic.

That’s more than 1 in every 5 startups claim they failed because of that.

And guess what?

One of my startups failed because I had the wrong team, too.

Several years ago, a recruiting software startup that I put my all into had crashed to a screeching halt because my co-founder maxed out the company credit card on frivolous things for himself (which I was the guarantor for at the bank), stole the seed money I put into the bank account, left to start a different startup, and took the site as the hosting was under his account. How do you like them apples?

But in all honesty, startups can fail even when something horrible like that doesn’t happen.

Co-founders can just not get along, can butt heads, disagree on key matters, not do their share of the work, have a poor skill fit, not enough passion, poor health, bad finances, and so forth.

So how do you get startup culture right?

It starts with finding the right co-founders!

And then it’s about enforcing a positive startup culture throughout your startup’s growth.

Luckily for you, in this post, I have the answers to not only help you not fail like that, but to help you build a company of people that will act like a tidal wave of awesomeness in your community.

7 Traits of Solid Co-Founders

From the very beginning, you want to co-found with the right person who:

  1. Has solid skills and compliments your skill sets
  2. Is passionate about your startup idea
  3. Has a great work ethic
  4. Is a good human being
  5. Is committed to learning and growing
  6. You can get along with
  7. Is financially stable

Now think about the opposite of each one of those characteristics.

Would you want that person in your work environment?

I’d say no. Wouldn’t you?

Just thinking about someone who has the opposite of just one sounds fatal.

We want class-A top-notch karate chopping ass kicking co-founders.

If you’re looking for a co-founder then you should check out this article: How to Find a Co-Founder and What to Look For.

What’s more, when you identify the traits you’re looking for in a co-founder, you can apply that to pretty much the rest of your hiring process in your startup — generally speaking, of course.

It’s nice to have a template, or mission statement, of sorts!

However, there’s more to hiring than just looking for someone who embodies those traits.

We as startups want to build larger teams. We want to grow! That’s what the next section is about.

Hiring Past Co-Founders

When you hire people to join your startup, you want them to stay, assuming they’re doing a good job. Don’t you?

Employee retention is just as important as customer retention. Perhaps even more so.

Why?

Because happy employees = happy customers = company longevity.

It takes time to train someone new to learn about all of your business processes, co-workers, and your startup culture. But if you put the effort into it to make it a pleasurable experience, then it’s going to be worth your time and energy.

Companies with strong cultures saw a 4x increase in revenue growth. Source: Forbes

And according to this article via Fast Company, happy employees are 12% more productive.

So it makes sense that you’d want to keep a good employee for as long as possible.

To do that, you must make your startup culture a priority.

According to the Harvard Business Review:

One of the costs of a weak or negative culture is voluntary attrition, or employees choosing leave. By investing in culture early on, one would expect that voluntary attrition would be lower, and our research corroborates that. Founders who rate the importance of culture lower than a 10 on a 10-point scale are 70% more likely to have higher employee turnover rates compared to founders that rank the importance of culture a 10.

However, let’s take a look at why people leave their jobs in the next section so you can learn how to avoid those reasons.

14 Reasons Why Employees Churn

  1. The work environment sucks
  2. They don’t feel valued
  3. There are never any raises
  4. They never know what’s going on in the company’s direction until it’s already decided upon (no transparency)
  5. They’re not making enough money
  6. They don’t like their coworkers
  7. They’re not passionate about the company’s mission
  8. There’s no flexibility for the needs of employees
  9. They hate their boss
  10. Their workload is too heavy and they don’t get enough support
  11. There’s no room for growth in the company
  12. Their commute to work is terrible (this can kill the quality of life)
  13. They have to work too many hours and they’re burnt out from it, which makes them hate their job.
  14. They don’t get good benefits or any benefits

Unhappiness can be a plague in startup culture because it starts harboring doubt and because of its small environment. It can be just as infectious as happiness and a good attitude.

A survey of almost 90,000 employees worldwide found that…

Companies with low levels of employee engagement had a 33% annual decline in operating income and an 11% annual decline in earnings growth.

Employee tenure at the most famous tech giants in Silicon Valley ranged from 1.8 years (Uber) to 7.8 years (Cisco), but Facebook had the average tenure of the group at 2.5 years.

What’s more, the employee turnover rate is highest at tech (software) companies at 13.2%. No other industry has a higher turnover rate.

 

You spend 33% or more of your time at work and it should be a welcoming and happy place. Work should not be a place where people dread to go to every day.

It’s obvious that you’ll want to prevent employee churn and unhappiness in the workplace as much as possible by promoting a positive startup culture.

Enough of what not to do. Let’s see what you should do, below.

20 Central Values for a Successful Startup Culture

1) Write Down Your Startup Culture

Have your culture in written form so you can communicate it easily to all employees. (Feel free to steal everything in this post for use in your startup).

Here’s an example of what Zappos does:

Zappos 10 core values - startup culture

2) Hire Passionate People

I know. This one is a no-brainer! I had to put this here for due diligence. Hire employees who are passionate about your startup’s mission and will be engaged at work. These people will be some of your top net promoters and will help drive your growth.

3) Don’t Scale Too Fast

Hire who you really need. No more. No less. Make sure that you have the budget to keep them on board. Nobody wants job insecurity. However, don’t overburden them with an exorbitant amount of responsibilities such as hiring one person to do two people’s work. Otherwise, they’ll leave.

It turns out that the faster you grow, the more likely your employees are to churn.

4) Promote Respect

Promote dignity and respect for all people, whether they’re employees, customers, or partners.

It doesn’t matter who they support politically or what religion they practice or how much money they do or don’t have. They’re all people.

Treat others how you want to be treated. Right? Right. This should be a no-brainer!

5) Make Education a Focus

Create a culture committed to learning and growing. Give your team opportunities to advance in their professional focuses and learn new skills if they’re interested. This can lead to cross-training which is very helpful when the situation might call for it.

Education also promotes new ideas and outside of the box thinking.

6) Give Employees Tools and Processes

Provide the tools and processes to allow your employees to be successful with their jobs. Do orientations to show people what you use and how you use it.

Show them any distinct processes that are important aspects of performing their job.

7) Build Each Other Up

Provide encouragement and inspiration to your team. People are much more likely to succeed in anything they’re doing if they’re encouraged that they can do it.

Rather than criticizing someone for something they may have done wrong, be supportive, listen, and encourage. Don’t hit them when they’re down. Mistakes happen. It’s life. We move on and learn from our mistakes. It’s part of how we grow.

8) Look for Personality

Hire people who you and the team get along with and will fit into your startup’s culture.

It’s good to see smiles. People feed off of happiness. Look for upbeat attitudes and people who can laugh. But also look for people that have a good head on their shoulders and understand life.

9) Be Inclusive

Encourage diversity in the workplace by hiring people of different genders, races, and sexual orientations.

Don’t judge people based on stereotypes. Everyone is different.

Having people from different backgrounds encourages creativity in the workplace, as well.

10) Make Health a Priority

Encourage physical fitness and healthy eating. The benefits are wide-reaching, from mental to physical benefits. You are what you put in your body. Treat your body like a temple.

Eating healthy and exercising regularly promotes more energy, better mood, better cognitive function, better overall health, and healthy muscles.

If you have your own office space and enough room, consider a workout station with some free weights and/or a machine, such as a treadmill or elliptical machine.

In addition, for healthy eating, you can buy all sorts of great fruit for your teammates to snack on for free.

Healthy eating infographic - promoting health in startup culture

11) Get Everyone Involved in Product Development

Get your whole team/organization involved in product development so you can hear feedback about the process and hear potential new ideas. It relates to everyone’s jobs so they could have some really useful feedback that you might not otherwise hear if they weren’t involved.

12) Collect Regular Feedback

Collect regular feedback from your employees about how they think the company could improve in any way.

Make it anonymous so they won’t feel like they can’t be honest or critical.

Nobody should be penalized for speaking up!

13) Be Flexible with Your Employees

Family and health are very important. Allow flexibility with work schedules to tend to either. For example, if someone needs to work from home to take care of their sick kid, be understanding. Let them work from home.

14) Make the Workplace More Personable

Create opportunities that help everyone get to know each other. Get people to share their background and something that they’re into or something unique about them in a group setting. Encourage people to be themselves…as long as they’re getting their job done.

15) Lessen Micromanagement

Trust your employees and keep the micromanagement to a minimum. It will allow their creativity and productivity to blossom. And, you’ll have more time on your hands to do the things you really need to do. Win-win.

16) Keep Things Transparent

Cultivate an environment of transparency and hold weekly meetings so everyone is on the same page. When employees are out of the loop, they are more likely to question the business decisions that management makes. When there’s transparency, your employees will understand the “why” behind your decisions. It also gives them the opportunity to provide suggestions.

17) Hire Humble People

A good attitude goes a long way, so look for humility when hiring people. What’s more, you don’t want arrogant employees thinking your startup’s success is just because of them.

18) Award Raises

Give your employees raises and/or bonuses, especially when your startup hits its milestones.

“A rising tide lifts all boats.”

Your employees want to feel appreciated and always want to make more money, just like you do. It’s a small price to pay for increasing employee happiness and thus retention.

19) Show Your Appreciation

Show your appreciation for your employees and teammates by saying thank you.

Reward your employees for successful campaigns, hitting milestones, etc.

Maybe host a happy hour after work one or two times a month.

20) Create Systems and Processes for Both Conflicts and Onboarding

Have systems and processes for both conflict remediation and onboarding so you can be fair to everyone across the board. Make sure they understand the processes.

21) Bonus

Check out these 100 Core Values from 15 Winning Companies so you can see what they set forth as their company culture.

What Industry Leaders Have to Say

As Katie Burke, the Chief People Officer of HubSpot says:

Your culture is part of the product that you offer and the service and promise you make to your customers.

Richard Branson, Founder of Virgin, shared two of his thoughts on company culture:

I have always believed that the way you treat your employees is the way they will treat your customers and that people flourish when they are praised.
Clients do not come first. Employees come first. If you take care of your employees, they will take care of the clients.

To take these company culture sentiments further, Tony Hsieh, CEO of Zappos says:

Businesses often forget about the culture, and ultimately, they suffer for it because you can’t deliver good service from unhappy employees.

Conclusion

Look — Foosball and ping pong tables don’t make great company culture. They’re things that can help your teammates blow off some steam during lunch or on breaks, but they aren’t what makes a company great.

Working day and night doesn’t make a great startup culture, either. Rather, it just promotes imbalance and diminishing returns.

In the end, it’s the values you set forth for your organization which will make or break your startup culture.

It all begins at the start of your startup. We are supposed to start startups so that we can add value and improve people’s lives. This includes within our own companies.

So when you enforce this culture with yourself, with your co-founders, and any other teammates you may have, your startup will be a force to be reckoned with.

What other tactics, if any, have you found to work towards creating a great startup culture for your workplace?

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