8 ways to build your startup culture

Culture is the foundation for startup scale and success

Have you ever worked at a company that had a “nice” culture? It is the type of place where everyone is friendly, no one ever gets into arguments, and feels like family.

Sounds like a great place to work! That was what I thought too, until I saw what being nice was all about. In a nice culture, hard decisions rarely get made, rumors and innuendo run rampant, politics take over, and unwritten rules dictate what gets done by whom and to whom.

In a nutshell, a “nice” culture is a toxic culture. It is not much different than a workplace that tolerates hostility and openly fosters conflict. In fact, it is kind of like a family, just a dysfunctional one.

We have seen all types of company cultures over the years. Some were not defined at all, some had culture and values that were rarely mentioned, and then some held culture up as the cornerstone of the company. At the startups I was with, including my own, culture was an afterthought. At Amazon, we are on the opposite end of the scale with our Leadership Principles being core to everything we do.

Does it really matter though? In our experiences and from our vantage point as Startup Advocates, setting culture is absolutely essential for future growth and scale. In startups without a defined culture, every problem becomes blown out of portion, hiring is inconsistent, retention is abysmal, decision making haphazard, and customers experience suffers.

Culture is the foundation for startup scale and success

Startups with well-defined cultures simply perform better. Why? Because culture helps explain the how and why behind the company so that everyone is focused on executing the vision. Brian Chesky, Co-founder and CEO of Airbnb, frames it best, “A company’s culture is the foundation for future innovation. An entrepreneur’s job is to build the foundation.”

Culture also becomes an attractor of talent. As Tony Hsieh of Zappos said, “Your culture is your brand.” Just as a brand attracts customers, a culture attracts people to companies that have the same values, much in the way HubSpot’s Culture Code or the Netflix culture deck brings certain types of talent that shares the same values and is more likely to stay for onboard for longer rather than churning out.

As a company begins to grow and add staff, culture also ensures faster decision making. A by-product of culture is that it establishes common behaviors, policies, rituals, and language that ensures clarity and removes friction from communication and collaboration. One example is the Amazon narrative culture where we write docs instead of decks and then read the doc during the meeting before discussing.

It is also important to understand what culture is not. You cannot outsource it or copy it from another company. As I often say, there is no Stack Overflow for culture. It is easy to confuse free snacks, ping-pong, motivational banners, and unlimited vacation policies as culture. That is workplace environment which can be important for morale, but does not contribute to building and scaling a great business.

Is this startup culture?

How does a startup founder create culture then when they may not even have a product, employees, and customers yet? Admittedly, I struggled with this with my startup. I thought about it for one second and then moved on to building product. In hindsight though, pausing to go through the culture setting process could have helped us avoid our own differences and disagreements later on as a founding team.

To help with the process of culture setting in startups, I boiled down the lessons learned from other founders to focus on eight ideas that apply to any startup when establishing their culture:

  1. Write down your vision and mission – It is easy to assume everyone knows what your startup is about, but putting it into words helps bring clarity in how your startups is making an impact and why it matters. Setting your “North Star” helps guide the process of defining the culture.

  2. Dedicate time as a founding team to define culture – This takes time to do right, but should not be longer than a day to create and a day to reflect. Having a whiteboard often helps with this exercise, and also setting ground rules for having a transparent and respectful discussion (a helpful book for ensuring health discussions is the book Crucial Conversations).

  3. Allow the entire company to comment on the culture – While culture starts with the founders, after time it is important to allow other voices to shape the culture and for the founders to openly and honestly incorporate feedback from employees so they feel valued and heard.

  4. Declare the values widely and often with employees – It is easy for culture to become the proverbial values on a poster. Take time to communicate the values regularly, whether through company communications, town halls, company awards, off-sites, and other group settings.

  5. Incorporate values into all aspects of work – Values need to be in the flow of work, from how you conduct meetings, language used in documents, decision making frameworks, internal communications, team organization, employee recognition, and other core rituals.

  6. Build culture into all people processes – Culture should be the single most important factor in how you manage talent in your startup from recruiting, onboarding, performance reviews, and promotions. Skills matter, but teams that are values aligned have greater impact long-term.

  7. State values publicly and share openly with customers – Companies want to solve problems, but they want to do so with vendors that are ethical and have clear values. Sharing your values with customers is not the most important buying decision criteria, but it can lend credibility.

  8. Revisit the culture on a regular interval – Startups change and grow rapidly, so it is worthwhile to review the culture and values every six to twelve months and assess whether there is a need to revise anything, and as stated above, allowing all employees to provide their input.

The most important lesson for founders to take from the process of culture setting is the fact that you are literally defining the type of company you would love to work in! This is the single most important thing you can do to set the course for future success. To that point, HubSpot states, “Culture happens. Whether planned or not, all companies have a culture. So why not create a culture we love?”

What startups have most impressed you with their culture? Why do you think the culture was so strong and visible at those companies?

We mentioned the Netflix culture deck in the essay. If you have not read it before, you might be intimidated that it’s over 100 slides 😲 To call the deck comprehensive would be an understatement 🤣

Luckily, Dharmesh Shah, Co-founder & CTO of HubSpot, read through the entire deck and shared the top 23 insights he gathered from this Silicon Valley culture tome, and we are kindly sharing with our dear readers here:

  1. Comes right out and says who the “freedoms and responsibilities” applies to. In their case, salaried employees only.

  2. Lots of companies have nice sounding values, but real values are defined by who gets rewarded and who gets let go.

  3. You can articulate what you are, and are not trying to do.

  4. You can separate what must be done well now, and what can be improved later.

  5. You treat people with respect, independent of their status.

  6. You accomplish amazing amounts of important work.

  7. You focus on great results, rather than process.

  8. You have a bias-to-action rather and avoid “analysis paralysis”.

  9. You create new ideas that prove useful.

  10. You find the time to simplify so we can stay nimble.

  11. You are quick to admit mistakes.

  12. We’re a team, not a family.

  13. A great workplace is stunning colleagues.

  14. You behave like an owner of the company.

  15. Prevent irrevocable disaster.

  16. “There’s no clothing policy at NetFlix, but no one has come work to naked lately.”

  17. Act in the company’s best interests.

  18. Flexibility is more important than efficiency in the long term.

  19. Best managers focus on context rather than control.

  20. Titles are not very helpful.

  21. Compensation should be about external market value, not internal parity.

  22. In some groups, there may not be enough growth opportunity for everyone.

  23. Individuals should manage their career paths — not the company.

What it often shocking to people reading through the culture deck is how matter of fact Netflix is about an employee’s value in a company. If the company shifts strategy and there is no place for some employees, they layoff said employees. This can seem incredibly cold, but to point 12) Netflix is not a family.

The danger is that a lot of startups have adopted the Netflix culture, and in doing so also unintentionally made their startup culture unemphatic and unappealing. A startup should not necessarily be a family, but it should be a place where people can experience pride in their work and joy with co-workers.

How do you calibrate the type of culture and values you are establish and whether it fosters a positive environment? Ask yourself this one simple question, “How would people remember you for this period of your life after you have passed away?”

Now that Fall is upon us (or Spring for our Southern friends), we are in full-on conference season. Let’s know if you will be in any of the following places, we would love to meet up in-person!

  • Dubai – Connect with Basil at AWS Cloud Day UAE on September 12th and hear Basil share his thoughts on building with an AI Co-founder.

  • Singapore – The Advocates will not be there, but the AWS web3 team will be for Token2049 on September 13th – 14th and hosting many side events, including a hackathon on September 11th, a social night on September 13th, and developer immersion day on September 15th.

  • Lima – The AWS User Group Peru conference is coming up on September 23rd and Mark will be speaking as well as meeting up with startups that week.

  • Johannesburg – The last summit for EMEA is in South Africa, AWS Summit Johannesburg, on September 26th, and Basil will be there with the AWS Startups Team.

  • Hong Kong – Come join Mark at the AWS Startup Day Hong Kong on September 26th to talk about what startups are doing to innovate in the downturn.

  • Taipei – After Hong Kong, Mark hops over to Taiwan from October 4th–7th for the start of the 42Geeks East Asia tour to dive deep into various startup hubs.

  • Seoul – Part two of the 42Geeks East Asia tour lands in South Korea from October 7th-10th to explore startup innovation and investment ecosystem.

  • Tokyo – The last stop on the 42Geeks East Asia tour winds down in Japan to learn and meet with local startups and investors from October 10th-14th.

  • Jakarta – One of the premier tech events in Southeast Asia is the Tech in Asia Conference, and Mark will be onsite to interview founders to share their stories.