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Why company culture is so important with startups


When it comes to startups, it sometimes looks like there is an obsession with culture. One might ask, aren’t there more important considerations? Do you have a minimum viable product? Does a market exist for this product? Are you positioned to scale up? These are all important issues that do take precedence at certain junctures. Over time, though, company culture at a startup trumps them all in how crucial it is to short and long-term survival. 

Attract Talent 

Many startups begin with a handful of peers who know each other. The day will come when growth forces you to move beyond your immediate circle. When that day comes, how do you attract solid talent? Odds are you can’t out-pay or out-benefit larger competitors. All that leaves is culture. The work experience at your company must be fantastic. That means your culture must excite and empower employees. One way you can do that is by offering professional and personal development opportunities.

Attract Investment 

Imagine for a moment that you’re a venture capitalist. You know how to read revenue projections, which are almost meaningless for startups anyway. You can tell after a couple minutes whether the founders have a functional game plan. So what’s going to separate one startup from another? Culture. Investors want to put their money into companies that will succeed. Toxic, dysfunctional company cultures implode on themselves and usually take the business with them. Startups with healthy cultures attract intense loyalty and drive. That buy-in from employees attracts investment. If the employees see something really valuable in the company, there is a good chance that customers will as well. 

Set the Tone for the Long Haul 

Company culture is really another way of describing organizational values in action. Companies that survive long-term almost always have a set of core values that employees unconsciously adopt because the culture runs so deep. Establishing those core values and the culture that supports them from Day 1 gives you a big head start on building a company that can survive beyond the first couple of rounds of funding. Of course, all that does depend on knowing the values from the outset. Founders must very consciously set that tone or a different company culture will evolve that may or may not reflect your values. 

Employee Health 

Startups are a stressful undertaking. People put in long, and sometimes insane, hours. They skip events with friends and families during launches. While occasional periods of stress are part of adult life, chronic stress has some well-documented and nasty mental and physical health consequences. If the company doesn’t stress employee wellness as a value in its culture, it’s all too easy for chronic overwork and stress to become the company culture. Changing those kinds of values proves incredibly difficult once they become established as the norm. This is another area where founders must take the lead and model healthy behaviors, not just talk about them. 

Social Momentum 

You’ve probably met people who get a look of utter fatigue whenever someone asks them about their job. They’re also the people who change the subject at the very first opportunity. Those are pretty good signs that a person works somewhere with a lousy culture. People who work somewhere with a great culture light up when they talk about their job. They’re also more likely to talk up their job and employer on social media. While it’s hard to quantify the exact relationship between employee admiration and how much public mindshare a company owns, it stands to reason the relationship exists. When employees communicate positively about their company, it encourages other to talk about and research the company. That starts with a great culture. 

The seeming obsession with culture in startup companies doesn’t come from nowhere. Company culture is a lot like oxygen in the way that it surrounds and pervades every aspect of a startup. Bad cultures breed stress, dysfunction, and eventual failure. Great cultures act like magnets that attract talent, investment, praise, and customers. By building great cultures from the outset, startups position themselves better for sustained, long-term success.

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