Culture Matters: How Great Startups Will Thrive in 2020
“Startup culture.” The phrase conjures images of working at home whenever you want, happy hours, unlimited PTOs, and having to act like “one big happy family.” Pet-friendly offices. Ping-pong tables. Zen rooms.
While these might be great benefits for startup employees, increasing comfort and sparking creativity, I’d venture to say that they’re not what truly defines a startup’s culture. This intangible but vital quality can make or break a new business, and adding benefits and perks isn’t enough to create it. To thrive in the new decade, entrepreneurs and founders will need to know how to effectively define and cultivate their own startup culture.
Why is culture important to your startup?
According to Glassdoor's 2019 Mission and Culture Survey, before applying for a job, nearly four in five employees and job seekers consider a company's mission and culture. This is only becoming more important as younger people move into the workforce. 65% of 18-to-34-year-olds are likely to place culture above salary; that's higher than any other age demographic surveyed.
Workplace culture also affects the bottom line. Even if a company manages to attract the best employees, a negative workplace culture can contribute to a higher employee turnover, decreased motivation, and overall decreased productivity.
Despite the evidence, seasoned founders or executives often seem to relegate positive corporate culture to an afterthought until problems and losses force them to shift the paradigm. And for many first-time founders and entrepreneurs, defining and creating an optimal culture for their startup can be its own challenge.
Because of this, many startups fall into the sinkhole of negative corporate culture. But whereas large, established companies might be able to take some losses in stride, a lack of team spirit in a startup can be toxic. For startups, the impact of every team member’s attitude and productivity is exponential.
Startup culture—a better model for business success.
Goksen Atalay, co-founder of smart mobility startups Comodif and Duckt, says:
Building an innovation environment is not only related to physical conditions, but also culture you built.
Since startups are often run by a small team working closely together, their “culture” is typically a reflection of the founding team's passions and personalities. In most situations, each individual working in a startup contributes to the overall culture.
Risa Mish, Professor at Cornell University, tells us that a company's culture reflects its core values, and those values are expressed through everything that the company does: hiring and promotion, financial expenditures, and choices about where team members’ time and energy are focused.
Your company's culture, along with its mission and vision, guide it, and drive its performance.
Emiliano Abramzon, co-founder at NearPod, defines “startup culture” as a positive environment that values creative problem solving, open communication, and a flat hierarchy.
Resilience and tenacity are absolutely key behaviors to succeed. Furthermore, being innovative and able to adapt to the ever-changing conditions are basic characteristics for any entrepreneur.
On the other hand, things like poor internal communication, gossiping, micromanagement, small-picture attitudes, and unfriendly competition in the office are hallmarks of a workplace culture that can kill a startup before it has a chance to succeed.
Innovation from the inside out.
One difficulty founders can face in cultivating startup culture is that culture is more than the sum total of a company’s employees, strategies, and goals.
In my opinion, while strategy offers a roadmap for a company's business goals in reaching its vision and driving the people around it, culture provides a guideline for how team members express those goals and a way of doing business that aligns with a company’s core values and mission.
[Related: Eight Common Reasons Small Businesses Fail]
How to build and maintain a strong startup culture.
Culture sets the tone for how your startup interacts with customers, suppliers, and stakeholders, and how your employees interact with each other. Once you understand how powerful startup culture really is, the next question to ask is: How can founders build startup culture that leads with innovation?
Atalay recommends three actions to establish an innovation-friendly company culture:
- Be clear and fluid in all aspects of knowledge within the team.
- Value each other's experience and effort to create confidence and trust.
- Help each other through harmonious communication and interaction.
Alejandro Cremades, bestselling author of The Art of Startup Fundraising, says that one of the biggest challenges many founders will face in 2020 won’t be making goals and rules, but learning to listen.
This is being able to listen to customers, employees, and investors to optimize the chances of succeeding with whatever is in front of the entrepreneur from an execution perspective. Without listening, nothing works.
Long-term culture wins over short-term compromises.
One of the points that startups who have already developed a great culture begin to go wrong at is when they must seek more outside funding, writes Anastasia Mikhalochkina, Lean Orb founder.
The way you raise capital will determine how freely you can commit yourself to your founding values. It will take solid self-discipline from the founding members to make sure that well-groomed processes carefully suggested by your investors and board won't kill what you thought mattered most to your products and customers.
Compromising on company values may seem necessary, but the benefits of creating a strong workplace culture are substantial. Mikhalochkina sums it up perfectly:
Taking a shortcut for better returns is easy, sticking to a worthy long-term goal takes courage and a lot of discipline. But if you do so well, you'll get to build both excellent products and culture.
In 2020, workplace culture will continue to be as important or more important than products and services. More than ever, founders will need to prioritize defining company culture from the beginning, before it’s too late. The investment of focus, time, and resources will pay off in higher talent, better communication, increased productivity, and customer loyalty.
Now, at the beginning of the decade, is a great time to consider creating your own startup culture. Does the culture of your workplace align with your company values?
Arzu Tekir is the Founder and CEO of Urbanite Venture, a growth consulting firm helping urbantech companies transform cities. She is a business strategist working with the leaders of the cities and organizations to create a positive change. She helps entrepreneurs develop growth strategies and access funding. She has been featured in various media outlets including, The Guardian, National Geographic Energy Challenge Blog, Jazeera Magazine, Bloomberg HT TV, and NTV-MSNBC. As a sought-after speaker, she gives talks and moderates discussions on smart and sustainable cities.
Have more questions? Follow up with the expert herself.
Founder & CEO
I'm the Founder & CEO of URBANITE VENTURE helping urban tech companies transform cities. Urbanite Venture is a growth consulting firm with expertise in smart cities, urban innovation, and fundraising. We help startups and investors accelerate growth through consulting services; marketing strategy, strategic communication plans, and fundraising strategy. To companies solving urban problems, we work as their business partner and independent advisor bringing new market opportunities, offering marketing & communication strategy consultancy and helping them... Continue Reading
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