Shaping culture

What is culture?

Culture is the shared values, beliefs, behaviours and habits of the team.

It’s the super-structure to choose and channel people’s energies in the right direction.

Culture is not set and forget

You can’t engineer culture like you do a product. Sure, you can write down company values, but don’t expect that to magically translate into team behaviours. A gardener doesn’t just throw seeds in the ground and walk away.

Culture requires tending to. You have to be in the trenches, reinforcing the behaviours you want, cutting out the ones you don’t, and adapting as your company evolves. Neglect your culture, and the weeds take over.

Putting the cult in culture

You don’t build a successful startup with a team that has a lukewarm attitude towards their work.

Startups require sacrifice. In exchange, the team gets to experience strong feelings of belonging and fulfilment.

From the outside, the best startup cultures often appear cult-like. The difference is that cults tend to be fanatically wrong about something important, while people at a successful startup are fanatically right about something those outside it have missed.

An added benefit of hiring less experienced people is that you can more easily indoctrinate people who grow up in your culture.

“Everyone at your company should be different in the same way: a tribe of like-minded people fiercely devoted to the company’s mission.”

Peter ThielFounders Fund

What does good startup culture look like?

There’s no generically optimal culture to strive for, but the best cultures share a few similar ingredients:

• Very talented people. Talent density.
• Long-term time orientation. Building lasting value takes time.
• Generative spirit. People should constantly be creating.
• Urgency. Speed is your most valuable weapon.

Speed by default

“Move faster. Slowness anywhere justifies slowness everywhere. 2021 instead of 2022. This week instead of next week. Today instead of tomorrow. Moving fast compounds so much more than people realize.”

Sam AltmanOpenAI

Speed is one of the few advantages startups have over their rivals. Going fast makes you focus on what’s important; there’s no time for bullshit. In the best startups, everyone has a kind of low-burn anxiety to move faster.

Max speed is not without downsides. You’ll inevitably make mistakes that could have been prevented if you slowed down just a little. This tradeoff is perfectly captured by Facebook’s old core value: “move fast and break things”.

Unlike driving, you’re far more likely to die from going too slow than too fast. So put the pedal to the metal.

Team composition affects culture

A non-obvious cultural lever is the composition of the team, specifically the ratio of engineers to non-engineers.

As the “center of mass” shifts, it changes how people think about solving problems in the company. This can have a long-term impact on how the product and company develop.

Generally most startup problems are technical ones, and most hires should be technical.

Culture principles

1. Startups are built by missionaries.
2. Values are only useful if reasonable people can disagree with them.
3. Culture is defined by how the team acts, not by how you say they should act.
4. 70% of culture is determined by who you hire, promote and fire.
5. Culture is like drying cement: it starts out malleable but rapidly hardens.
6. Performance is contagious. Poor performance is the most contagious.
7. Cultural influence is top-heavy. Leaders and founders have exponentially more influence over culture.
8. Standards are reset every day.

1. Startups are built by missionaries

All reason suggests that you shouldn’t have been able to build most startups, even the ones that end up wildly successful. Someone else is almost always going to have more resources than you: more engineers, servers, time, money and so on.

The reason startups end up succeeding often just comes down to two things:

• Your team just cares way more about it than everyone else.
• Your operating velocity is higher than everyone else’s.

Startup teams win on conviction.

2. Values are only useful if reasonable people can disagree with them

4. 70% of culture is determined by who you hire, promote and fire

The three biggest factors that influence culture are:

• Who you hire, promote and fire
• Founders and leadership
• Incentives and standards

All the typical culture work that companies do, like explicating values, has a small impact compared to hiring, promoting and firing. Partly this is because people decisions are high signal to the team about what’s important at your company, and partly it’s because there’s a limit on how much you can shape how people act.

5. Culture is like drying cement

When it’s still in its liquid form, company culture is extremely malleable. The decisions made in the early days, like who to hire or how to handle challenges, shape the cultural foundations.

As time passes and the team grows, the culture solidifies. It’s still possible to make changes later on, but it’s much more painful and requires more drastic interventions, like getting rid of leaders or even whole teams.

6. Performance is contagious

Most people imagine team performance to be the sum of everyone’s contribution, but it’s more accurate to think of it as multiplicative:

1 × 1.3 × 2.1 × 0.4 × 5.2 = 5.7

Poor performers don’t merely have a minimal contribution, they actually drag the entire team down. They poison the well for everyone.

Conversely, high performers don’t merely have a significant individual contribution, they increase everyone else’s performance too. They show everyone else what’s possible.

7. Cultural influence is top-heavy

Employees mimic founders and leaders. The way employees act, communicate and their level of commitment to the company is set by the founders.

If you see someone acting out of line with what you want the culture to be, call them out. But also take a hard look at how you and your co-founders are showing up: your behaviour might be the cause.

Some cultural red flags for founders and leaders:

• Lack of an obvious burning hunger
• Arrogance that leads to a lack of curiosity
• Unwilling to risk looking stupid
• Struggling to manage their own wellbeing
• Low agency

8. Standards are reset every day

“If you see something below standard and do nothing, then you’ve set a new standard. This is also true of culture — if you see something off-culture and ignore it, you’ve created a new culture.”

Ben HorowitzA16Z

The moments of temptation. Starting out with a blank slate and big dreams, it’s easy to set high standards. In the early days, these standards drive you and your team to push harder.

But as you grow and the intensity ramps up, those same standards will seem tyrannical to some. You’ll realise you can relieve so much pressure by dropping your standards just a little. The problem is, lowering the bar is MUCH easier than raising it again.

It only gets harder over time, because you have to disappoint members of the team who are super excited about something they’ve worked on, and you’re sending them back to the drawing board. But do it anyway! The job of the founder is to hold the line.