What startup culture actually is

Many people like to think of “startups” as a culture trend before all, but it’s important to remember that technically, it is mostly an economical concept defining a certain type of businesses. However, the economical aspects of startups do imply some cultural similarities between one another, and actually probably more than in any other type of businesses. And I don’t know about you, but I happen to find those ties just fascinating.

First, let’s put a definition to the word “startup”: a startup is simply a business that is designed for growth, and needs growth to ensure its survival.

Most often, it will need it because:

  • it hasn’t yet found its business model (it doesn’t yet know how it will make money), and needs to grow to find out what kind of traction works on the business idea before monetizing it;
  • it has a business model in mind, but it requires a critical mass for it to work, which it doesn’t have yet (and therefore is not profitable yet).

I’m not saying that it is a business that seeks growth (all businesses seek growth!), but that it is designed for growth as a survival need, which changes a lot about what those kinds of workplaces usually are made of.

Note: startup and tech are not directly related. Startups existed before the tech sector existed; and many tech businesses get started today that are not startups. One thing tech changed, and in particular IT: things are able to get done faster, so extreme growth is “easier” to generate. Thanks to IT, startups tend to be able to start up faster nowadays.

Cultural / organizational trends one typically meets in startups

Note that most of them come from how, to ensure growth, startups are most often designed for efficiency and adaptability at all cost.

A shared passion for the startup’s market and users

Indeed, a startup is meant to change constantly, but this only works if it changes for the better. And for your efforts to better and better match the market and users, every single person on board needs to have a thorough understanding of them; and the better the understanding, the better your growth. This is why in financial startups, you will find way more loonies talking to you about finance for hours, than in actual banks.

Also, users are the people who feed a startup’s growth, so you will often hear conversations about “what users told us they need” over lunch. And what users need (while still being relevant!) ultimately has to become everyone’s constant obsession.

Organizational ability to change everything very quickly

Since your activity can change from one day to the next, and is likely to change at least a little bit weekly, your structure must be intensely fluid. In easier cases, this means the technical guy must sometimes do some marketing stuff, simply because he’s the best on board to do that one thing. But the same goes with management skills too, and businesses often have a harder time with that: the best guy on board to manage one iteration might not be the best guy on board to manage the next. And it takes some solid organizational fluidity to let managers accept to be replaced by one another for the good of the product.

I remember working in a multi-project startup-like company, and I was some other guy’s manager on a given project, while he was my manager for another simultaneous project. This wasn’t awkward one bit, as we both trusted that each of us was the best match to lead the project we each were responsible for.

This is why the “Everyone has a given role” approach that you find in regular businesses doesn’t work too well for startups; each person’s added value needs to be optimal at any given time, which implies that roles get constantly adapted depending on what’s going on.

Cultural ability to change everything very quickly

This means the startup not only needs to have a strong tolerance to surprises (good or bad!), but actually needs to actively seek them. Experienced startup managers know that uncontrollable growth can only happens when you let go of a lot of your control, and embrace unexpectedness to get unexpected results. As a result, this also allows them to spend less time on ensuring/enforcing their control, and more time on what actually grows the business.

I like to say that if you apply your plan strictly like your mind imagines it, then you will only get the growth that your mind can imagine.

A shared passion for killing anything damaging growth

I was talking with a tech startup entrepreneur with an early product very recently (let’s call him John), and we were talking about tech startups with known bugs in their products. For instance, wednesdays.com is an amazing concept, but their lingering bugs never cease to amaze me on each visit, so much that I got frustrated once, and now I don’t go there much any more. Here’s to your growth…

John was telling me that whenever he knew there was a known bug on his product that wasn’t fixed yet, he simply could not get any sleep that night, literally; and he was expecting for his team to be the same, each one of them at least a little. He just knows that details like these could kill his growth, and therefore his startup, and that he can’t allow his startup’s culture to tolerate them.

KPI-maniacs all over the place

Who says growth says growth rate says KPIs, and it is often expected from a CEO in a startup to define which are the metrics that will be closely followed to define if the growth rate of these metrics is satisfying (number of users, revenue, pageviews, transactions, …). This is why so many startup entrepreneurs spend hours frantically setting up dashboards to follow what’s up with their product, and why so many BI tools targeting startups are booming with scary pricings: following growth metrics closely is simply the only way a startup knows whether it’s doing good or bad.

I tend to like it a lot when startups display screens with real-time graphs and dashboards in the middle of their open-space, which is very common in many startups, big and small; recently, within the same day, I saw pretty much the same screens in SlideShare’s offices, and then at an early-stage two-guys startup in a co-working space.

Stellar business reactivity

This is true for every kind of business, and I didn’t realize it existed until recently, but obviously, not reading or replying to your e-mails means some potential business is not happening right now, and probably won’t ever happen, and that some promising topics are potentially waiting for you. It’s already pretty bad in regular businesses, since this obviously damages all kinds of output; but it is simply lethal in a startup, as it simply sentences your growth to death. Kids, don’t do this at home.

Processes to a bare minimum

If you have never read the notorious “Netflix HR” document, that shook the Silicon Valley in the 2000s, and defined much of what Silicon Valley businesses tend to be like today, you just need to find an hour in your schedule for it (it’s pretty long, and requires some attentive reading). Some of their approach is applicable to all kinds of businesses, some of their processes are downright stolen from startups; one of them being the necessary removal of all processes that are not absolutely necessary.

In their absolute commitment to that value, they reveal that Netflix employees have infinite vacations (because it removes the process of requesting / validating them), and full access to the company’s credit card (because it remove the process for expense accounts); of course, they’re all accesses that are based on a trust that you don’t want to abuse if you’re a Netflix employee. What is amazing is that we’re not talking about an early-phase startup struggling to set itself up, but about a multi-billion-dollar company with thousands of employees, that knows very well what it’s doing. Their point as a large business is that non-absolutely-necessary processes damage their growth.

Back to our topic: if Netflix found that those processes used to damage growth for them, then you can understand how they can kill a startup, that actually needs even less of them anyway.

Accountability

Well, this is an corollary of the two previous ones: since startup managers don’t want topics to be stuck somewhere because of them, and since they seek to keep their processes to a bare minimum, the “you should show this to the manager first” process is most often simply eradicated in startups. You can find it expressed on the career sections of startups with sentences such as “managers stay out of the way”, or  “you must have bias for action” (as opposed to validation); I like to think that this is on career sections because it is the main reason why startup people want to work in startup-like environments.

As much as “managers who validate” are the signature / definition of pyramidal organizations, I like to think that startup people are simply people who don’t think pyramidal is optimal, and would rather be in an organization where they feel accountable and trusted.

Rewards and compensations bound to growth

Since people are expected to only breathe if growth happens, a very typical organizational scheme for startups is to attach all compensations to growth in some way, even for employees that are not in the main line of the business. Attaching compensation to growth (most often by giving equity) is the only certain way to have people on board that are here for the growth, and not only for the experience, or worse, the title (because, you may have noticed that many startups are not cheap on cool-sounding C-level titles).

Also, throwing a “hundred-thousandth-active-user party” or a “break-even fun crazy night” are not only cool startup-like events for team-building, they’re necessary to keep the growth in everyone’s mind and pleasure.

Well, what to make of this?

Even though what I call “startup culture” stems from certain companies’ economical constraints, what I find fascinating about it is that you can find it in pure forms in businesses that are not startups at all, or haven’t been startups anymore for a long time; and on the other hand, it is sometimes purely missing in businesses that actually define themselves as startups. What I find even more interesting, is that even though startup culture is an outcome by itself, “installing”/ensuring it in a company brings its own outcomes, even if the company is not a startup itself. This is why even larger companies tend to be interested in having their departments “work like startups”, and rightly so: extreme adaptability and accountability triggers spontaneous innovation within all “levels” of the organization, while the race for growth triggers… well, revenue.

I like startups, but not as much as I love what I call “startup culture”, which I described in this post; and I am a firm believer that all businesses that seek innovation, efficiency, and growth should be looking into this mindset to boost their output, and a firm supporter of businesses that do.

And you, what startup culture traits do you think come from their growth-oriented designs? What traits of startup culture have you witnessed before, in your company or in others’, whether they were startups or not at all?

One thought on “What startup culture actually is”

  1. Thank you very much for this post, it is definitely worth reading. Thanks! I especially like the no-processes Netflix approach. Really interesting.

Comments are closed.