If you’re looking for how you can create a startup culture of excellence, then you’re in the right place. An excellent culture is one that’s positive, supportive, driven, and growth-oriented. You’ll find this post to be a guide to help you form a company culture that helps propel your company forward.
Company culture is “an important factor for 46% of job seekers” and “millennials prioritize ‘people and culture fit’ above everything else.” What’s more, “94% of entrepreneurs and 88% of job seekers say that a healthy culture at work is vital for success,” all according to data from Team Stage.
To help you with building a great startup culture, I’m sharing what I’ve learned over the years from my experiences and from best practices for startups.
What You’ll See in this Post
- The core traits of successful teams of startup founders
- Find out how to expand your team with awesome people
- See the 20 central values to a successful startup culture
- Discover how to include remote teammates in your culture
- See the costs of a bad culture, why employees churn (quit) so you can learn what not to do, and how to prevent it
- Find thoughts from industry leaders about startup and company culture
The Beginning of a Startup’s Culture
What exactly is startup culture?
Startup culture is defined by the values and processes you have in the workplace.
For the purposes of this post, startup culture and company culture are synonymous. Startup culture ideally starts at the very beginning of a startup’s creation through the founders’ vision of how it should be run. Doing this provides a great jump for the startup.
However, if a startup doesn’t have a formal approach to startup culture yet, then it can still be created. And that’s what this post is going to help you do — form a company culture that helps your startup thrive.
That’s because having the right team is one of the most important factors of a successful startup culture and starting a successful startup in general.
We want to see you build an amazing culture so your startup can thrive.
But on the flip-side, if founders don’t develop a startup culture sooner than later, or have a poor startup culture, then it can spell doom for their startup.
23% of surveyed VC-funded startups failed because they had the wrong team and it’s the #3 reason for startup failure, according to a study by CB Insights.
So how do you get startup culture right?
It’s about promoting a positive environment and good processes that will last the test of time.
But there’s so much more to it than that.
It starts with the founders from the very beginning of the startup, because you want to have the right co-founders who will carry the culture with them through all of their activities.
Founders should lead by example – yes. But not just them, rather all people in your startup should be leading by example.
It’s not just work ethic either. It’s attitude and soft skills that they bring to the table.
You’ll want co-founders and teammates in your startup who:
- Have solid skills and compliments your skill sets
- Are passionate about your startup idea
- Have a great work ethic
- Are good human beings
- Are committed to learning and growing
- You can get along with
- Are financially stable so they don’t leave and disrupt your core team if they’re getting just equity
Now think about the opposite of each one of those characteristics.
Would you want a startup culture with people like that in your work environment?
That’s a big no.
So write these things down and remember that if you see people who don’t possess any one of those traits, don’t take the risk with them.
What’s more, you can apply the traits of a co-founder to pretty much the rest of your hiring process in your startup — generally speaking, of course. There are always exceptions.
Part of the trick to creating a great founding team with a collaborative startup culture is to find people with minimal skill overlap with an enthusiastic and positive attitude so you can get the most done with the fewest people – and have fun building a great business while you’re at it.
If you’re still looking for great co-founders to build a team, then you would benefit from checking out this article I wrote: How to Find a Co-Founder and What to Look For.
Feel free to check out this quick 3 minute video from the Kauffman Institute on startup culture for some more insights, as well.
However, there’s more to hiring than just looking for someone who embodies the above traits.
We as startups want to scale up and build larger teams. We want those new employees to embody the culture. Wouldn’t you agree?
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How Company Culture Affects Hiring and Employee Retention
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, you might ask?
Because happy employees make happy customers which creates longevity for the company and the employee.
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 even more sense that you’d want to keep a good employee for as long as possible.
To do that, one must make a positive startup culture a priority.
Now check out this excellent infographic that will further cement the importance of a successful company culture to employees.
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.
Here’s an example of what Zappos does:
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.
Marc Benioff, Founder of Salesforce shares that, “the secret to successful hiring is this: look for the people who want to change the world.” If you hire these types of people, you’ll be damn sure that they’re passionate.
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.
Extremely fast growth can create a lot of uncertainty and instability in a company. Teams get split up and new teams need to be made, often with the original team all becoming managers. New layers of complexity are added. More work is loaded onto people’s plates. And uncertainty can create anxiety.
Every startup’s new hire should be very deliberate. Headcount is a vanity metric and the more people you have, the more people you have to pay.
4) Promote Respect For All
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, healthy eating, and mental health.
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.
Physically and mentally healthy people are going to have better performance than people who are not.
And, they’ll be happier. Happy face = happy workplace
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 fruits and nuts for your teammates to snack on to help keep their energy up and functioning at peak performance.
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) Don’t Micromanage!
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. Look for humility when hiring people because they’re team players. What’s more, you don’t want arrogant employees thinking your startup’s success is just because of them. Confidence is good, but being full of oneself is not.
You can tell someone is humble when they’re praised for a great job and they attribute their success to the people around them that helped make it happen.
Similarly, you can try asking during an interview why they had success with a project they led.
18) Award Raises When Possible
Give your employees raises and/or bonuses when possible, especially when your startup hits its big milestones and are profitable.
“A rising tide lifts all boats.” – John F. Kennedy, 35th POTUS
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
Speaking of showing appreciation, show your appreciation for your employees and teammates by saying thank you and complimenting them when they do a great job on something. Tell them you’ve noticed their hard work and want to share how happy you are with what they’ve been doing.
You can also reward your employees for successful campaigns, hitting milestones, etc.
One way of doing this is by hosting a happy hour after work one or two times a month.
You can buy lunch for the team, but give them notice so they don’t have to waste time packing one beforehand.
20) Create Systems and Processes for Both Conflict Remediation and Onboarding
Create systems and processes for both conflict remediation and onboarding so you can be fair to everyone across the board.
Make sure they understand the process.
Every company is going to have a different hiring process, depending on its size and the role you’re looking to fill. Ensure people have references and that you check them.
Neither process has to be complicated either, so don’t fret on making it perfect in the beginning.
21) Bonus Tip
Check out these 100 Core Values from 15 Winning Companies so you can see what they set forth as their company culture.
Including Remote Teammates in Your Company Culture
Hiring remote workers has become a very popular method to fill vacancies for companies, small and large alike.
Since COVID, a vast sum of people still work 100% remotely. It cuts down on commuting time, saves workers money, and often gives people a better quality of life.
Many of these people are contractors, some are not, but that shouldn’t matter.
Regardless of your remote teammate’s status, it’s important to include them in the fold so they feel as much of the startup culture as they can while being away from the office.
You’ll want to have these people sit in on team meetings as a virtual participant. If they can’t attend, then ask them if they have any questions or concerns they’d like to raise for the meeting and your team leader or designated individual can talk about them about what was said once the meeting is done.
The remote worker(s) should have access to the people and documentation they need to increase productivity, minimize frustration, and increase happiness with their work.
And if you don’t have any freelancers or remote workers, but you think they could help you achieve your goals, then you visit the following post to find sites to them called 13 Best Freelance Websites to Hire Top Talent.
Regardless of whether your team is remote or local, it’s also important to understand what a negative startup culture looks like so you can see what to avoid.
Costs of Negative Startup Culture and Reasons for Why It Happens
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 so you can learn how to avoid those reasons.
14 Reasons Why Employees Churn
- The work environment sucks
- They don’t feel valued
- There are never any raises
- They never know what’s going on in the company’s direction until it’s already decided upon (no transparency)
- They’re not making enough money
- They don’t like their coworkers
- They’re not passionate about the company’s mission
- There’s no flexibility for the needs of employees
- They hate their boss
- Their workload is too heavy and they don’t get enough support
- There’s no room for growth in the company
- Their commute to work is terrible (this can kill the quality of life)
- They have to work too many hours and they’re burnt out from it, which makes them hate their job.
- 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 if your team is on the ropes between feeling good and bad.
Other variables are that people may 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.
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 and overall great work experience.
Next, let’s see what some industry leaders say about startup culture.
What Industry Leaders Have to Say About Company Culture
It’s important to learn from leaders who have been tried and tested.
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.”
He also says:
“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, the late and great Tony Hsieh, former CEO of Zappos said:
“Businesses often forget about the culture, and ultimately, they suffer for it because you can’t deliver good service from unhappy employees.”
May he RIP…
In addition, we think you’ll appreciate this post with 115 Enlightening Startup Quotes from Successful Founders, as the advice of these unicorn startup founders ranges from startup culture, mindset, development, and more. However, below are a few quotes that we think you’ll also find insightful.
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.
We are supposed to start startups so that we can add value into and improve people’s lives. So when you enforce this culture with yourself, with your co-founders, and any other teammates you may have, your startup will be a positive force to be reckoned with.
What other tactics, if any, have you found to work towards creating a great startup culture for your workplace? Or, which of these suggestions changed how you thought about company culture?