It’s the Culture, Stupid

 “It doesn’t matter if I failed. At least I passed the concept on to others. Even if I don’t succeed, someone will succeed.”—Jack Ma

I embarked on a 30 day blogging challenge to restore my passion for writing (more about it here ) Please sign up to my newsletter to receive the latest updates. This was day twelve.

I had lunch with a VC friend the other day. He invested in over 100 companies over the years, so I was curious to ask him if he developed any patterns to know which companies will succeed.

He said, that it’s hard to know which ones will succeed but you can learn a lot from the failures. And actually in both cases, it was all about the founder. This is generalising a bit, but it makes a point.

Startups in which he liked the market and the product, but wasn’t sure about the founder, ended up failing, in many cases because the founder wouldn’t correct the course when things weren’t working. They were too in love with their own idea, and didn’t heed to external advice. They stopped communicating or bet the farm on their own gut instinct, which in many cases was wrong.

Those who succeeded, had founders who were passionate, experts in their field but wise enough to know that they don’t know everything. They surrounded themselves with good people, and focused on getting traction with their product, growing the team thoughtfully, but keeping a big vision.

Often, the founders project their own values on the company, shaping the culture. One of my favourite posts about culture and founders, is very aptly called ‘Don’t fuck up the culture’. It was written by Brian Chesky, co-founder and CEO of AirBnb, and the title Peter Thiel’s answer to the question “what was the single most important piece of advice you have for us?”

I highly recommend you read the whole post, but here’s an example of why the founders, and getting the culture right, are so important:

“Why is culture so important to a business? Here is a simple way to frame it. The stronger the culture, the less corporate process a company needs. When the culture is strong, you can trust everyone to do the right thing. People can be independent and autonomous. They can be entrepreneurial. And if we have a company that is entrepreneurial in spirit, we will be able to take our next “(wo)man on the moon” leap. Ever notice how families or tribes don’t require much process? That is because there is such a strong trust and culture that it supersedes any process. In organizations (or even in a society) where culture is weak, you need an abundance of heavy, precise rules and processes.”

When the culture is left to chance, you get the opposite. More corporate structure. Less trust and more need to tell people what they need to do, which reduces risk taking and encourages safe bets, and following the rules.

In a very timely post by Anand Sanwal, founder and CEO of CB Insights, he shared the deck he presented at the company offsite. The team grew to 130 people in a short period of time and he posed the company with a question he gets a lot:

The answer was not competitors, financing or the economy. It’s culture.

He outlined four challenges of scale, which form the base the company’s culture:

1. Keep hiring 4s and 5s on the helpfulness scale
   (Daniel Debow, How to be an effective early stage employee)

2. A culture of speed?—
Making decisions and executing on decisions makes category killers. (Dave Girouard, First Round Review, Speed as a habit)

3. A culture of intellect & critical thinking
“if you get a team of clear thinkers, the possibilities are endless”. (Justin Menkes, HBR)

4. Stay humble, outwork everyone
Grit. The hard work. (Ray Allen, Letter to my younger self)

How do you build culture?

Quoting Brian Chesky again:

By upholding our core values in everything we do. Culture is a thousand things, a thousand times. It’s living the core values when you hire; when you write an email; when you are working on a project; when you are walking in the hall. We have the power, by living the values, to build the culture. We also have the power, by breaking the values, to fuck up the culture. Each one of us has this opportunity, this burden.

At Google, Susan Wojcicki did a fantastic job outlining the company’s Eight Pillars of Innovation, which are a glimpse into the company’s culture. You can find many more resources on this topic on Google re:Work. An excellent resource documenting something that maybe feels like it happens naturally and effortlessly, but in reality it’s hard work. Want to read more?

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