Why Start-Ups Should Build Culture from the Start?
As a start-up, what’s the one thing that Airbnb should pay special attention to for charting a successful future?
When asked this question by Brian Chesky (Cofounder & CEO, Airbnb), Peter Thiel (co-founder Paypal and Palantir, and a large investor in Airbnb), offered an unusually sober advice: “Take care of your culture.”
In their infancy days, when start-ups grapple with challenges on multiple fronts--perfecting the product, scaling up, attracting right kind of talent and managing cash flow--they might just overlook what Thiel tried to highlight to Brian: Building company’s culture. Interestingly, culture gets formed anyway and the only question remains: Is it the culture you wanted or something that just got formed without any deliberate design?
Brian took Peter’s advice seriously and went on to build a strong foundation of culture in Airbnb, a company that today’s start-ups aspire to emulate. “Culture is the foundation of your company…if you break the culture, you break the machine that creates your products,” says Brian.
Leading technology companies that were start-ups once, like Google, Zappos.com, LinkedIn and Airbnb, all have one thing in common: They took care of and managed to create a strong distinctive culture.
What is culture?
Seemingly intangible and, at times, difficult to comprehend, culture in a practical sense is a reflection of how people think about certain issues, take decisions, prioritize, recruit and reward, treat customers, deal with change and collaborate with one-another.
It defines what you value most. What are the principles your organization operates by? What is your distinctiveness in the eyes of all stakeholders? It is these shared beliefs that form an organization’s culture. Every aspect of business then must be driven by these beliefs. Every process should be consistent with these beliefs.
For instance, Google’s culture has a distinct flavor that makes it one of the best places to work. Laszlo Bock, Google’s SVP of People Operations explains the elements of its culture: “People look for meaning in their work. People want to know what is happening…mission, transparency, voice…these three components of our culture create a virtuous cycle of attraction, community and innovation.”
How is culture formed?
With each passing day, start-ups make some big, some small decisions along the way, hire new people you don’t know and set behaviors, such as, what performance or flexibility means, and what is your idea of risk taking, etc.? In short, you lay the principles of running your business.
This is nothing but culture-in-making.
But companies like Google and Zappos.com didn't let their culture form by default. When Google was just a few years old, its founders wrote “Ten things we know to be true,” a set of principles that defined their values, which formed the foundation of their culture. Those principles continue to guide them even today.
Similarly, Zappos.com, an online retailer, widely recognized for its outstanding customer service, came up with ten core values—essentially a formalized definition of their culture—in order to scale and grow, when it was very young.
Fred Kofman, Philosopher & Vice President, LinkedIn, explains how LinkedIn created a culture of healthy debate: “We ask people to criticize by proposing (an alternative solution), and to make the other right (e.g., recognize the kernel of truth in her argument) before you make her wrong (e.g., point out where you think she is mistaken).” As can be observed, such clarity helps build strong behaviors, which then flower into an enabling culture.
As time progresses, your values and culture start taking roots. Your organization’s distinctive flavor starts emerging. This is culture now in full bloom.
Is culture really important?
Tony Hsieh, CEO, Zappos.com, offers an insight: “Culture is every bit as important as the bottom line.” And nobody knows it better than Tony whose company is a role model for start-ups world over when it comes to culture. Looking back, he adds, “ I only wish we had done it (defining core values) sooner.”
As you become more successful, your culture slowly starts driving many key aspects of your business, such as, the kind of people or talent you attract, the investors who would like to get associated, the type of products that are likely to come out of your works and the passion with which you serve your customers. Continuous innovation, the key to success for most startups, itself is a direct outcome of culture. Thus culture gets manifested in everything that counts in your conduct of business.
Jeoff Lawson, CEO & Cofounder of Twilio, a cloud communication startup, offers his perspective on the importance of culture: “Thousands of decisions are made every day. Culture is how you, as the leader of your company, are confident that every one of those decisions is the right one.”
Clearly, Airbnb, Google, Zappos.com, LinkedIn, and Twilio share one common characteristic though they are in completely different businesses: right culture. It has sustained them over the years and is likely to continue fueling their growth in years to come as well. They have worked at it and continue to hone it.
Culture aligns organizational energy towards desired goals. It is your organization’s soul, consciousness and invisible power. Nurture it right from the start to build an outstanding organization.