How to build a startup's culture from scratch

It’s hard to get together with your co-founders and kick off a startup. But it’s much harder to actually turn this idea into a real company. After you got properly funded, your first thought is very likely “Great, now I can hire people and we’ll be blazingly fast!”. Sorry to let you down, but turning an idea into an actual company is much harder than you might think.

The reason is very simple: You’re starting with a blank slate. Your so called company doesn’t have any culture, values and history. Innovative and successful companies are usually communities with a rich culture and a concise value system.

Starting from a blank slate

So the experiment begins. You start hiring people and It’s very likely that the cosy little dorm-room style startup has turned into a gigantic mess by now with your new hires running around like headless chicken. Besides you’ll very likely run into conflicts and arguments because for some reason all these people you’ve hired are either not a fit for the position or they are not compatible with each other.

Slowly but surely you start thinking: “What a mess! Let’s introduce some hierarchies and processes to get this thing in order!” Now you start introducing processes for buying office equipment, releasing software, you introduce SCRUM and do many more things to try to get this thing under control. Surprise, surprise. It doesn’t work at all.

Why on earth have you’ve hired these people? They might be smart and well educated, but you have a constant atmosphere of tense relationships and issues around properly coordinating anything. The answer is that you don’t have any value system yet that you can apply to your hiring process. Consequently it’s very likely that many of your hires turn out to be non-compatible.

Don’t create an artificial value system

The biggest waste of time I experienced in my startup life was probably creating an employee handbook in an early stage of the company. The book was a patchwork of ideas and directions some people thought might be appropriate. This handbook did more harm than good. It was doomed to die off quickly as it was an artificial, non-organically grown document.

It’s definitely allowed to look at other successful examples (e.g. HubSpot or Netflix) and to take into account your own experiences from communities that had a great impact on defining yourself (MIT and the community around CIC had a significant influence on my value system). Feel free to borrow elements from different cultures and try to apply them to your own startup. You’ll find that many things don’t fit but eventually you’ll have some hits. Just keep in mind that every organization is different and there are no absolute truths you can apply.

By their very nature, organizations are dynamic social networks rather than static hierarchies

Most larger organizations have still very static, hierarchical systems. This is still possible because large organizations have lots of resources to back this wasteful organizational design. Besides, organizations get incredibly complex at some point and I must confess I don’t have a recipe for corporate structures. But in a startup environment with less than 100 people you have different problems. Your primary problem is that you can’t afford organizational waste because everyone needs to be fully committed to turn your idea into a viable business. Every bad hire, every social conflict brings you closer to the abyss of the startup deadpool.

Culture must grow organically. It’s hard to accept this because it would be quite nice if you could just put together some kind of handbook and everyone accepts and lives it. In reality you can’t just draw up the actual culture, especially if you managed to get together a group of very smart people. You can and must set the overall vision and get everyone to agree on that and coordinate the cultural evolution (which is a lot of work). Especially for founders it’s incredibly hard to give away a big junk of control.

Keep it lean - Avoid processes, have one core value and live it

Startups don’t have the resources to build and maintain hierarchies and control structures. Think carefully about every single process you introduce. The only reason to introduce a process is to improve the interfacing of different people or parts of your organization. Process overhead is poison can collide easily with the way how smart and committed people work.

Based on my own experiences I strongly believe that you have to have one broad core value on a human level that defines the foundation of your culture. This might differ from organization to organization, but you have to live and rigorously defend this value. For me, the core value is trust. At my current startup, trust is the foundation for everything.

Trust is mutual

Frankly it was really hard for me to give away control in the beginning. The first problem was that we weren’t clear on and didn’t enforce our core value properly. Means we hired people that might have been smart, but were incompatible with working in a highly trust-based culture. It took us quite some time to build a team that really lives around this core value and starts to organically develop an incredible and unique culture.

Keep in mind that trust is mutual. I expect that I can fully trust everyone on a professional and personal level and everyone else on the team can expect the same from me. If someone violates that trusted relationship, it should be openly discussed and should immediately raise the question if the violator can still work with the team.

Trust i the glue that holds your team together and gives people the power and freedom to flourish. Building and maintaining a highly trusted relationship between all your team members is crucial if you want to avoid the usual pit holes like clique formation and management and hierarchy overhead.

If you hire people you need to manage, you’re doing something wrong

I see my job a bit different than it might be defined in most parts of management books. My most important tasks are coordinating our tech development, building the right framework for people to work and grow in and represent the engineering team’s decisions to other stakeholders. We’ve managed to get together a group of excellent people and I wouldn’t dare to make important decisions on my own without discussing them with the team.

Our usual decision process involves all members that are working in a certain project, looking together at all the details and data that might help us to make a solid decision. We then mutually agree on what to do. If one person on the team doesn’t feel confident about a certain decision and raises concerns (e.g. releasing a feature under time pressure), I’m fine with communicating and defending this decision.

The only reason why we can run this open decision design is that I can trust people to decide in the best interest of our shared vision. On the other side, they can trust me, that I hear and defend their decisions.

Let’s sum it up

I know, that was a long post. So let’s sum up how you can get from a blank slate chaos company to the first stage in building an actual culture (I’ll talk about achieving the second stage in my next post):

  • Have a concise company vision everyone agrees on
  • Avoid introducing any process that is not geared towards improving how people interface with each other
  • Define a broad human value that sets the context for your growing culture
  • Live it and share it
  • Don’t hire people you need to manage

In my opinion these steps are very necessary to just get to a point where you can really start growing a more detailed value system within your startup. Never forget it’s humans, not resources, you’re working with. In my next post I’ll look into the next step: Controlling the evolution of org culture and into managing friction within that context.

Startups Software Engineering