The “Culture First Culture” Conversation

Two days ago, I posted a twitter conversation about “culture first culture,” or the idea that the culture of a startup should be its top priority. In this post, I share my thoughts on the topic.

Definition of Culture

The best definition of culture comes from Paul Freet, “Culture is the sum of the people.” Therefore, setting culture is about setting the sum of the people.

Nature vs Nurture

Setting the sum of the people is accomplished by “setting” individual people in an environment where they can best contribute to the sum. Some aspects of individual people can be set through “nurture.” Others are more tied to the individual’s “nature” and are unlikely to change.

Therefore, culture can be partially modified through “nurturing” and creating a good environment. Other parts of culture can only be set by firing people and hiring people until the sum of the natures of people within the organization equals the desired culture.

Culture at the Earliest Stages of a Startup

In the earliest stages, founders naturally tend to try to optimize the sum of themselves (i.e. their culture) by: 1) first selecting each other as founders, and 2) second pushing each other to excellence. Founder’s don’t really talk about “culture” at that stage, because it is seems small and silly to talk about the culture of 2-4 people.

Even with the first few hires it feels strange to talk about the culture of a handful of people. It’s just a handful of people trying to scrape by building stuff and selling stuff. You never hear of failed startups of 5 or less people attributing their demise to poor culture.

Constraints and the Luxury of Culture

In an ideal world, we all would be able to surround ourselves in our startups with the sum of absolutely awesome people. Some founders filter job candidates not only on competence and fit for the role but also on would-i-want-to-hangout-with-this-person tests. There is a valid argument to wanting a culture that hums both on and off the field. It’s a luxury.

However, not every startup (especially in the earliest stages) has that luxury. As founders start to hire in a startup, they are constrained by many factors, including cash, competence, availability, supply in a niche or new market, and much more. After filtering job candidates on competence, fitness for the role, and willingness to take a low wage, so few people may be left in the candidate pool that the early startup cannot afford the luxury of filtering for hangoutability.

I wonder sometimes if some founder’s that could have bootstrapped their businesses instead raise equity capital largely for this reason; they want to pay top salaries early on to have more luxury in hiring.

Similarly, it was pointed out on twitter that the companies that talk most about the importance of culture are those that are very profitable and have great luxury in hiring. This creates the appearance of a survivorship bias towards their emphasis on culture as a causal element of their success.

Culture Modifications

The downside of ignoring culture early on, either due to constraints or neglect, is how difficult it becomes to change culture later. Cultures have inertia. New employees emulate the behaviors of existing employees. So bad hiring choices made early can sully subsequent hires.

Culture Leadership

I believe great leaders can persuade others to become better. For example, let’s examine Pardot’s 3 core values: Positive, Self-starting, Supportive. I believe great leaders can take teams that are mediocre in those areas and turn them around, one individual at a time.

Even so, it is sure easier if those values are already embedded in each individual’s nature.

Vision and Culture

Part of great leadership involves painting a picture and inspiring excellent performance by individuals in individual roles through a vision of something important and meaningful. Vision and culture go hand-in-hand. Vision plays an integral role in defining the ideal target culture. Vision is a motivational tool used to nurture desired behaviors from individuals and teams.

Culture Scaling

As a company scales its headcount, paying attention to culture becomes dramatically more important. Scaling the headcount is changing the sum of the people. It’s beneficial to have a pre-planned and deliberate profile of the type of person you are seeking before you start looking to hire. Otherwise, you risk the sum of the people changing in an unanticipated direction.

What is the Point of Paying Attention to Culture?

The point of paying attention to culture is two-fold: 1) to improve business performance, and 2) to improve the lives of those touched by the business, especially customers and employees. Strategically focusing on culture is better than leaving the sum of the people open to in-the-moment happenstance decision-making regarding hiring, firing, and company best practices.

Importance of Culture

I think most founders and companies naturally try to optimize their cultures, even if they don’t define it explicitly as such. It’s a natural process to want to optimize the sum of your people, and everyone recognizes the importance of doing so.

However, doing so deliberately and methodically sets some startups apart from others. Does it make or break the startup’s outcome? Maybe; maybe not.

Culture First Stages

Here are some ideas for how I believe “culture first culture” can be applied at different stages of a business:

Co-Founder Selection: The biggest early culture setting event is the selection of co-founders and how the co-founder relationship kicks off.
Handful of People: Early attention to culture is not very actionable. At this stage, the main actions are how the handful of people are able to motivate and inspire each other to build better stuff and sell more of it. But paying attention to culture is also not very costly. It is easy to write out the first draft of a profile describing people you want to hire into your business. Pardot’s values are nice and worked well for them – it’s a good place to start. At least you’ll have a notion of what you want, and you’ll be able to iterate later on as the startup grows.
Growing Headcount: Once the headcount starts to grow, the importance of paying attention to culture increases dramatically. The startup now begins to have some freedom from constraints and luxury to hire more selectively. Culture control is essential for scaling the organization so that the principles of its success remain strong at all levels of the organization.

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What are your thoughts on the definition and importance of focusing on culture?

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